HUD Probes Lenders for Treatment of Pregnant Consumers

February 22, 2013

The Department of Housing and Urban Development says it is investigating dozens of complaints that mortgage lenders are allegedly denying or delaying loans because a woman is on maternity leave. Such practices violate the Fair Housing Act. Lenders are not able to use parental leave as a basis for denying a qualified borrower.

“Where lenders run up against the law is where they single out pregnant women for a difference in treatment based upon an assumption that either they’re not being paid on leave, they don’t have a job to go back to, or that they are unwilling to go back,” John Trasvina, HUD’s assistant secretary for Fair Housing and Equal Opportunity, told The New York Times. 

Some banks recently have reached settlements over such discrimination allegations. For example, PNC agreed to pay a couple $15,000 after a Navy veteran alleged that a PNC representative told her she had to return from maternity leave in order to get a Veterans Affairs loan. PNC denied wrongdoing, but agreed to the settlement anyway.

An advocacy group called MomRising says it has received about 200 responses from women who say they’ve experienced discrimination in the lending process. “We heard everything from women who were newly married going in with their spouses and having potential lenders asking illegal questions like, ‘When are you going to have a baby?’ to actual discrimination in the home loan,” says Kristin Rowe-Finkbeiner, the group’s executive director.

Source: “Mortgages: Investigating Sex Discrimination,” The New York Times (Feb. 21, 2013)