HUD Settles With BofA Over Lending Discrimination Tied to Refis

The U.S. Department of Housing and Urban Development (HUD) announced that Bank of America will pay $45,000 as part of Conciliation Agreements resolving allegations the lender discriminated against pregnant women seeking mortgage loans.  HUD had alleged that the Bank of America refused to refinance the mortgages of two couples in California and Texas, because the women were on maternity leave. Refusing to approve a mortgage loan or provide mortgage insurance because a woman is pregnant or on family leave violates the Fair Housing Act’s prohibition against sex and familial status discrimination, which includes individuals who have or are expecting a child. “No lender should use a woman’s pregnancy or maternity leave as a reason to deny a mortgage loan,” said Bryan Greene, HUD Acting Assistant Secretary for Fair Housing and Equal Opportunity. “We commend Bank of America for working cooperatively with the Department of Housing and Urban Development in reaching appropriate resolutions of these complaints.  Bank of America took affirmative steps to work with government regulators to ensure that its new policies did not conflict with lending guidelines.” The cases that were the basis for this settlement involved two couples. One couple, from San Jose, California, alleged that Bank of America moved back the closing date on their mortgage refinance because the woman was on maternity leave. The other couple, from Humble, Texas, alleged that Bank of America refused to consider the wife’s employment income and denied their application for a mortgage loan because she was on maternity leave. The couple further alleged that when their real estate agent told the loan officer that denying the loan because of the woman’s maternity status violated the Fair Housing Act, the loan officer changed his reasons for denying the loan. The couple ultimately obtained a mortgage from a different lender. Under the terms of the Conciliation Agreements, Bank of America will pay $25,000 to the California couple and $15,000 to the Texas couple. The Bank will also pay $5,000 to the Texas couple’s realtor. Additionally, Bank of America will revise its policies to allow applicants on parental leave to be approved for mortgage loans without first returning to active work status. Bank of America will also conduct fair lending training for its employees.