Dive Brief:
- Institutions including PNC Mortgage and Bank of America have settled complaints from the U.S. departments of Justice and Housing and Urban Development that they denied mortgages to would-be borrowers if a woman was on maternity leave or expecting, refusing to count her income.
- In the most recent settlement, last month, Mountain American Credit Union blamed its mortgage insurer, CMG Mortgage Insurance Co., for making it tell a couple in Utah to come back when the wife was back at work and had a paycheck to prove her income.
- None of the companies that paid fines admitted any wrongdoing, but HUD said there is an ongoing flow of complaints to investigate.
Dive Insight:
The logic of the lenders is that there is a higher chance of default if a woman goes on unpaid leave or might decide to stay home from work. The federal contention is that, in the words of a senior HUD official, "the birth of a child, a joyous event for a family, should not become the basis for denying that family a home mortgage."
