The Department of Housing and Urban Development charged Bank of America (BAC) with allegedly discriminating against disabled mortgage applicants.

According to the charge, BofA required borrowers who relied on disability income to provide physician statements as part of the mortgage application process. This, according to HUD, is a violation of the Fair Housing Act, which prohibits a lender from imposing different qualification criteria based on disability.

The law also forbids a bank from inquiring about what the disability may be.

"Holding homebuyers with disabilities to a higher standard just because they rely on disability payments as a source of income is against the law," said John Trasviña, HUD assistant secretary for fair housing and equal opportunity. "Mortgage companies may verify income and have eligibility standards but they may not single out homebuyers with disabilities to delay or deny financing when they are otherwise eligible."

HUD investigated complaints from two borrowers in Michigan and another in Wisconsin. Each alleged the bank required personal medical information and proof their social security payments would be continued.

Bank of America said it complies with the act.

"It is the policy of Bank of America to comply with all applicable fair lending laws and regulations," said Dan Frahm, a BofA spokesman.

The charge will go to federal court. If the judge finds discrimination occurred, BofA could award punitive damages. The judge could also order an injunctive relief and other relief to deter any further discrimination, including the payment of attorney fees. The judge could also impose fines.

jprior@housingwire.com