HUD Fines Mortgage Lender $35K For Violating Fair Housing Act

Posted by Patrick Barnard on September 15, 2014 No Comments
Categories : Residential Mortgage

A Jackson, Tenn.-based mortgage lender has been fined $35,000 for allegedly denying a mortgage loan to a couple because one applicant was on maternity leave.

The U.S. Department of Housing and Urban Development (HUD) levied the penalty against FirstBank Mortgage Partners for violating the Fair Housing Act, which makes it illegal to discriminate against loan applicants based on sex, race, religion, familial status and other factors, including whether an applicant is pregnant or on maternity leave.

‘No qualified applicant should be denied a mortgage loan solely because they take maternity, paternity or parental leave,’ says Gustavo Velasquez, assistant secretary for fair housing and equal opportunity for HUD, in a release. ‘HUD will continue to enforce the nation's fair housing laws to ensure no one is illegally denied the opportunity to own a home.’

The couple alleged that FirstBank had approved their loan – but when bank officials learned that the wife was on maternity leave, they notified the couple within 24 hours of the closing that the loan had been denied.

As a result, the couple lost the opportunity to buy a home in Virginia, they complained.

The couple alleged that they also lost their current housing, requiring the wife and infant twins to move in with her parents while the husband moved to an apartment with their three-year-old.

According to the complaint, FirstBank did not consider the couple's ability to make loan payments during the wife's maternity leave, ignoring the husband's salary and the wife's short-term disability insurance payments.

In addition to the fine, FirstBank must also adopt a national paternal leave policy and receive annual fair housing and fair lending training.

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