The U.S. Department of Housing and Urban Development (HUD) has announced an agreement with PNC Mortgage in Trumbull, Conn., settling allegations that the lender violated the Fair Housing Act by requiring a home loan applicant on paid maternity leave to return to work before the lender would approve a home loan.

HUD's complaint alleged that because PNC required the woman, a U.S. Navy veteran, to return to work before approving the Department of Veterans Affairs (VA)-guaranteed loan, she and her husband could not close on their new home in Newington, Conn., until a month later than they had planned. As a result, the seller of the home allegedly required the couple to pay an additional $3,000 for the delay.

Under the agreement with HUD, PNC will pay $15,000 to the couple and review applications for VA-guaranteed residential mortgage loans filed in the last two years in Maine, Vermont, Connecticut, New Hampshire, Massachusetts, Rhode Island, Pennsylvania and New York to identify qualified loan seekers whose applications were denied because they were pregnant or on maternity leave. PNC will pay $7,500 to each victim who is identified.

PNC will also revise its temporary leave and short-term disability income policy if HUD finds that the policy is deficient and will provide fair lending training to its residential mortgage loan originators, underwriters and processors.

"Since 2010, HUD has been investigating lenders who have allegedly violated the Fair Housing Act by requiring women to terminate their maternity leave early in order to qualify for a home loan," says John Trasvina, HUD's assistant secretary for fair housing and equal opportunity. "HUD will continue to enforce the law and take action against lenders whose loan policies establish different terms and conditions for women who are pregnant or on maternity leave."