Saturday, May 06, 2017

Fair Housing Lawsuit: Credit Union Refused Granting Mortgage Loans To Women While They Were On Or About To Go On Maternity Leave

In Denver, Colorado, The Denver Channel reports:
  • Greenwood Village-based home loan lender Bellco Credit Union faces accusations it broke federal fair housing laws by not giving mortgage loans to women while they were on or about to go on maternity leave.

    Bellco Credit Union was sued by the Denver Metro Fair Housing Center(1) in March in U.S. District Court of Colorado for allegedly discriminating against people based on their sex and familial status, the suit says. It was assigned earlier this month to a judge, and a scheduling conference in the case is set for May 26.

    According to the suit, Bellco has continued to deny mortgage loans to women who are either on or facing impending maternity leave until the women return to work for at least 30 days, which DMFHC says is a direct violation of both state and federal fair housing laws, as well as underlying rules for loans issued by Fannie Mae.

    Bellco has more than 20 branches across Colorado.

    Over a period of several months last year, DMFHC used five women to test Bellco’s rules by applying for mortgage loans either while they were already on maternity leave, or by saying they were about to go on it.

    The women were all white in order to control the test, the suit says, and all had credit scores in the mid-700s, household incomes with two earners and money in their savings. Two of the women were not on our about to go on maternity leave so as to control the test, the suit says.

    In all three cases in which the women said they were on or about to go on maternity leave, loan representatives from Bellco told the women they would have to return to work and provide one month’s worth of pay stubs in order to close on a home, despite some of them having alternate incomes from their husbands and, in one case, $72,000 in savings, according to the suit.

    In one case, one of the Belco workers “unequivocally communicated that women on maternity leave must return to work as a threshold condition to potentially qualify for a home mortgage loan from Bellco,” according to the suit.

    But the U.S. Department of Housing and Urban Development (HUD) has issued numerous guidance memos over the past seven years showing that women do have the right to obtain a mortgage loan while on maternity leave.

    From 2010 to 2014, HUD received approximately 190 complaints regarding home loans and pregnancy or parental leave, around 40 of which were settled by the end of 2014, according to the suit.

    When HUD settled with Houston-based lender Cornerstone Mortgage Company in 2011, an assistant secretary for HUD said that explicitly.

    “Pregnancy is not a basis to deny or delay a loan. It’s just that simple,” HUD Assistant Secretary for Fair Housing and Equal Opportunity John Trasvina said at the time. “Mortgage professionals may verify income and other resources and have eligibility standards, but they may not single out women on maternity leave to deny or delay loans that they are otherwise eligible for.”
For more, see Bellco Credit Union sued for alleged mortgage loan discrimination against women on maternity leave.

For the lawsuit, see Denver Metro Fair Housing Center, Inc. v. Bellco Credit Union.
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(1) The Denver Metro Fair Housing Center is a non-profit fair housing organization dedicated to eliminating housing discrimination and promoting housing choice for all people through education, advocacy, and enforcement of fair housing law.

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