Two new legal actions by federal fair lending regulators suggest the mortgage industry needs to address the issue of possible discrimination against women who are pregnant or on maternity leave.
June 12, 2011
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 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.