Investigating Sex Discrimination
The New York Times
Published: February 21, 2013
Since 2010, the department has been investigating dozens of complaints
against lenders who allegedly denied families mortgages because the wife
was pregnant or on maternity leave. Such practices may violate the Fair Housing Actâ€™s prohibition on discrimination in the sale, rental or financing of housing based on sex or familial status.
â€œWhere lenders run up against the law is where they single out pregnant
women for a difference in treatment based upon an assumption that either
theyâ€™re not being paid on leave, they donâ€™t have a job to go back to,
or that they are unwilling to go back,â€ said John Trasvina, HUDâ€™s
assistant secretary for Fair Housing and Equal Opportunity.
Under the law, lenders may not use parental leave as a basis for denial
if the borrower demonstrates that she intends to return to work, and
otherwise has enough income to qualify for the loan.
In a 2010 New York Times article
that was the basis for HUDâ€™s investigation, brokers said that lenders
were scrutinizing the incomes of new parents more closely as a result of
the more conservative lending climate.
Since the governmentâ€™s investigations began, several lenders, including
Cornerstone Mortgage and Bank of America, have reached agreements to
settle complaints of discrimination. And last year, the Mortgage
Corporation agreed to pay more than $500,000 to settle a Justice
Department lawsuit charging that the company wrongly denied policies to
women on maternity leave.
A settlement announced this month involves a Navy veteran who said a PNC
Mortgage representative in Trumbull, Conn., told her she had to be back
at work from maternity leave to obtain a Veterans Affairs loan.
According to the complaint, the woman and her husband (whose names were
not released) negotiated an extended closing date for a house they were
buying in Newington, so she wouldnâ€™t have to cut her leave short. They
said the seller charged them $3,000 more.
Under the settlement, PNC, a division of PNC Bank National Association,
denied wrongdoing but will pay the couple $15,000. In addition, the
company will review V.A. loan applications from the last two years in
New York, Pennsylvania, Rhode Island, Connecticut, Vermont, New Hampshire and Maine to determine whether any denials were based on pregnancy
or maternity leave. Asked for comment, the company issued a brief
statement affirming its commitment â€œto serving everyone, regardless of
In response to the HUD investigations, MomsRising, an advocacy group,
asked its members whether they had experienced discrimination in
lending, and received some 200 responses through its Web site.
â€œWe heard everything from women who were newly married going in with
their spouses and having potential lenders asking illegal questions
like, â€˜When are you going to have a baby?â€™ to actual discrimination in
the home loan,â€ said Kristin Rowe-Finkbeiner, the executive director.
The practices, she said, are not just a reflection of lender
skittishness since the housing crisis, but â€œoutdatedâ€ ideas about women
in the labor force. â€œThere is an assumption by lenders that women will
drop out of the labor force and that her income will disappear,â€ she
Mr. Trasvina says that any woman who thinks sheâ€™s been unfairly treated
by a mortgage lender should contact his office at (800) 669-9777.