Lenders accused of discrimination in relation to maternity leave

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It is against the law to refuse a mortgage to a woman because she is or plans to be on maternity leave, but that is what some lenders are accused of, according to an article on the news website of the National Association of Realtors.

Last year, a Southern California couple were denied a mortgage refinance request because the woman was on maternity leave, in direct violation of the federal government’s equal credit and fair housing laws in the 1970s and 1980s. article.

Women have faced discrimination in lending for decades, because lenders viewed them as riskier borrowers than men… Many women are unaware that laws exist to protect them from such unfair or unequal housing practices. Women who are aware of these laws and have faced such discrimination have filed complaints and lawsuits against creditors with federal authorities.

One woman, Carly Fagan Barton, went to court and won. Burton’s mortgage insurance company, Mortgage Guaranty Insurance Corp., refused to approve the loan until she physically returned to work from maternity leave and presented two consecutive pay stubs, even though she made the same amount of money while on vacation, according to given article.

Barton returned to work early, but the loan process was still delayed, so she took out a home equity loan instead. The article says that the new loan still carries a higher interest rate than the rate linked to refinancing.

Barton filed a complaint of discrimination in connection with maternity leave with the US Department of Housing and Urban Development. The lawsuit turned into a class action lawsuit against a mortgage company, which Barton declined to name. The lawsuit with the mortgage insurance company lasted two years and ended with a fine of $ 38,750 and the establishment of a victim compensation fund in the amount of $ 511,250.

Burton is not the first or the last woman to face such discrimination. Fair housing advocates say they want to see much more effort and oversight from the federal government to educate both women and lenders about maternity leave discrimination.

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