The U.S. Department of Housing and Urban Development (HUD) recently announced a settlement of $20,000 with a financial servicing firm to resolve allegations of violating the Fair Housing Act.
According to the allegation, a California couple’s mortgage application was denied by the Land Home Financial Services because the wife was on maternity leave. Though the couple received a pre-approval letter, after the wife gave birth she had to terminate her maternity leave early to earn a full two-week paycheck by the time escrow closed on the loan, a press release stated.
LHFS’s refusal to approve the mortgage loan is in violation of the Fair Housing Act, which prohibits discrimination in the sale, rental, and financing of dwellings, and in other housing-related transactions, based on race, color, national origin, religion, sex, familial status, and disability.
The statement said that LHFS will pay the couple $20,000 under the terms of the conciliation agreement. LHFS also agreed to ensure that its underwriting polices conform to Federal National Mortgage Association (FNMA) and Federal Home Loan Mortgage Corporation (FHLMC) guidelines with regard to pregnancy leave income.
“This settlement is part of a series of HUD enforcement actions across the country to address denials of home loans to women because they are pregnant or on maternity leave,” John Trasvina, HUD’s Assistant Secretary for Fair Housing and Equal Opportunity said in a statement. “We will continue to pursue maternity leave discrimination until it is eliminated.”
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