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Mortgage

HUD fines FirstBank Mortgage Partners for maternity-related discrimination

Couple denied mortgage because of maternity leave

FirstBank Mortgage Partners has been fined $35,000 by the U.S. Department of Housing and Urban Development to settle allegations that the lender violated the Fair Housing Act by denying a mortgage loan to a couple because one applicant was on maternity leave.

According to the original complaint filed against FirstBank, a married couple alleged that FirstBank approved their mortgage application and scheduled its closing, but upon learning that the wife was on maternity leave, the lender reversed field and denied the mortgage loan.

The couple was notified of the loan denial within 24 hours of the scheduled closing.

According to HUD, FirstBank did not consider the couple’s ability to make loan payments during the wife’s maternity leave, ignoring the husband’s salary and the wife’s short-term disability insurance payments when it denied the loan.

The couple also alleged that after the denial, they lost the opportunity to buy a home in Virginia. The couple also allegedly lost their current housing, which forced the wife and infant twins to move in with her parents and forced the husband to move to an apartment with the couple’s three-year-old.

“No qualified applicant should be denied a mortgage loan solely because they take maternity, paternity or parental leave,” said Gustavo Velasquez, HUD’s assistant secretary for fair housing and equal opportunity. “HUD will continue to enforce the nation’s fair housing laws to ensure no one is illegally denied the opportunity to own a home.”

Under the terms of the settlement agreement, FirstBank will pay the couple $35,000, but does not admit liability and denies having discriminated against them.

The company will also adopt a national paternal leave policy and receive annual fair housing and fair lending training, HUD said.

This instance is at least the third maternity-related fine levied by HUD in the last several months. In July, HUD and the Department of Justice settled claims against Bank of America, PNC Mortgage, Cornerstone Mortgage, and MGIC, among other companies, alleging that the companies engaged in maternity discrimination.

Earlier in July, mortgage lender Greenlight Financial Services was fined $48,000 to settle allegations that it violated the Fair Housing Act when it denied or delayed mortgage loans to women because they were on maternity leave.

As in the FirstBank situation, Greenlight allegedly denied a couple’s mortgage application because the wife was on maternity leave.

In addition, the company allegedly denied four other applicants who were on maternity leave, or delayed their applications until after the woman returned to work.   

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