Women on Maternity Leave Cannot Be Denied Mortgages

The Fair Housing Act prohibits discrimination in the terms, conditions or privileges associated with the sale or rental of property based on an applicant’s gender.  This includes the denial of a mortgage loan or mortgage insurance because a woman is pregnant or on family leave. Evidently, some lenders didn’t get the memo.   It took a lawsuit and slap on the wrist money judgment for one mortgagee to get on the right side of the law.

A married couple filed a complaint with HUD alleging that GFS Capital Holdings (formerly Greenlight Financial Services) denied their refinance application because the wife was on maternity leave.  While researching this claim, HUD uncovered four other instances where the company denied or delayed applications from women on maternity leave, saying their applications would be reconsidered when the women returned to work.

Bryan Greene, HUD’s General Deputy Assistant Secretary for Fair Housing and Equal Opportunity, said that an applicant on maternity leave alone is not a valid basis for denying or delaying a refinance loan. He added that “HUD will continue to enforce fair housing laws to ensure that no otherwise qualified applicant is illegally denied the home financing they need only because they take maternity, paternity or parental leave.” Since the lender ignored federal law, HUD fined them and attached an additional training provision in their ruling.

Greenlight must pay $20,000 to the couple that filed the complaint, and $7,000 to each of the other four applicants with delayed or denied applications.  The company must also sponsor an annual fair lending training to employees and management staff before making any more mortgages.  Interestingly, GFS Capital Holdings a.k.a. Greenlight Financial Services does not have a mortgage operation now.

Greenlight/GFS Capital Holdings is probably not alone.  If you question a mortgagee or lender’s acts during your application for real estate loan,   contact HUD’s Office of Fair Housing and Equal Opportunity at (800) 669-9777, or go to their website and file a complaint at www.hud.gov/fairhousing.  

If you’re a momma in waiting, there’s no time to waste!