The US Department of Housing and Urban Development (HUD) announced Wednesday that it will launch a series of investigations to determine if the lending practices used by certain mortgage lenders violated the Fair Housing Act. The Act prohibits discrimination in lending with regard to sex, familial status (pregnancy/children) or disability. HUD said this coincides with its mission “to create strong, sustainable, inclusive communities and quality affordable homes for all.” Questions arose after the New York Times published an article demonstrating that firms may have illegally denied mortgages to expectant mothers and families experiencing short-term disability. “This report is profoundly disturbing and requires immediate action,” said John Trasviña, HUD’s assistant secretary for Fair Housing and Equal Opportunity, the office that will be directing the investigations. “Lenders must not carry out due diligence responsibilities in ways that have the practical effect of discriminating against recent or expectant mothers.” The Federal Housing Administration (FHA) requires its approved lenders to review a borrower’s income to determine whether they can reasonably be expected to continue paying their mortgage for the first three years of the loan. FHA-insured lenders cannot, however, inquire about future maternity leave. “Having a child should be a time for a family to celebrate and must not be a cause for unfair lending practices,” said HUD secretary Shaun Donovan. Write to Christine Ricciardi.
HUD to Probe Claims of Mortgage Discrimination
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