By Kenneth R. Harney
June 12, 2011

Reporting from Washington—

Should being pregnant and taking maternity leave ever be reasons to be turned down for a home mortgage or having your loan closing postponed?

You might think not, but two new legal actions by federal fair lending regulators suggest that the mortgage industry — and even federally run financing giants Fannie Mae and Freddie Mac — may need to address the issue.

In one case, a Seattle-area physician settled a discrimination complaint with Cornerstone Mortgage Co., a national mortgage banking firm based in Houston. In the second, the Department of Housing and Urban Development accused MGIC, one of the country’s highest-volume mortgage insurers, of discrimination by underwriters against a Pennsylvania homeowner whose application allegedly was denied because she was on maternity leave.

In the Cornerstone settlement, federal regulators alleged that the lender initially approved the applicant for a mortgage but later said that her income while on maternity leave could not be considered in qualifying for the loan. That, in turn, was a violation of the Fair Housing Act, regulators said, because it limited her ability to obtain financing based on her “sex and/or familial status.”

Cornerstone did not respond to a request for comment, but in the settlement agreement denied any wrongdoing and said the issue arose because the applicant “failed to disclose … that she would be on leave from her employment.”

As part of the settlement, Cornerstone agreed to pay the applicant $15,000 and to create a $750,000 escrow fund to pay potential claims from other women who may have been harmed by Cornerstone’s maternity-leave policies during the last two years.

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