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Yeprem's Blog

By Yeprem P. Davoodian, M.A. | Agent in Encino, CA
  • Investigating Sex Discrimination and Real Estate

    Posted Under: Crime & Safety, Market Conditions, Agent2Agent  |  March 17, 2013 2:36 PM  |  191 views  |  1 comment

    Investigating Sex Discrimination

    The New York Times
    By LISA PREVOST
    Published: February 21, 2013

    For news and features on real estate, follow @nytrealestate.

    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 Act’s prohibition on discrimination in the sale, rental or financing of housing based on sex or familial status.

    “Where lenders run up against the law is where they single out pregnant women for a difference in treatment based upon an assumption that either they’re not being paid on leave, they don’t have a job to go back to, or that they are unwilling to go back,” said John Trasvina, HUD’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 HUD’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 government’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 Guaranty Insurance 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 wouldn’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 “to serving everyone, regardless of family status.”

    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. “We heard everything from women who were newly married going in with their spouses and having potential lenders asking illegal questions like, ‘When are you going to have a baby?’ to actual discrimination in the home loan,” said Kristin Rowe-Finkbeiner, the executive director.

    The practices, she said, are not just a reflection of lender skittishness since the housing crisis, but “outdated” ideas about women in the labor force. “There is an assumption by lenders that women will drop out of the labor force and that her income will disappear,” she said.

    Mr. Trasvina says that any woman who thinks she’s been unfairly treated by a mortgage lender should contact his office at (800) 669-9777.

 
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