Stipulations within the Fair Housing Act supposedly prevent mortgage lenders from denying or delaying loan applications for women on maternity leave, but a new report suggests that many lenders are actually ignoring these rules. According to the Department of Housing and Urban Development, it’s currently investigating a slew of complaints from pregnant women that say they have been discriminated against.

 

The Fair Housing Act states that lenders are not able to give ‘maternity leave’ as a reason for denying finance to qualified borrowers, yet the New York Times says that this has happened on “dozens” of occasions in the past three years.

John Trasvina, assistant secretary for Fair Housing and Equal Opportunity at HUD, explains:

“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.”

According to the New York Times, the HUD’s investigation stems from a previous article in the paper, which revealed that new parents were coming under much closer scrutiny from lenders as they tightened up their financing rules.

The investigation has resulted in some banks agreeing to settlements rather than fight the accusations against them. In one case, PNC paid out $15,000 to a couple after a Navy veteran was wrongly told that she wouldn’t be entitled to a Veterans Affairs loan until she returned from maternity leave. PNC continues to deny it discriminated against the couple, yet coughed up anyway rather than take the case to court.

MomRising, a parent’s advocacy group, recently asked its members to report any discrimination they had faced from lenders. According to them, more than 200 women came forward to complain of discrimination from lenders.

Kristin Rowe-Finkbeiner, Executive Director of MomRising, told the New York Times that lenders had asked illegal questions such as “when are you going to have a baby?” on numerous occasions, and in some cases had even blocked people’s mortgage applications due to pregnancy.

The HUD is now urging any woman that thinks she’s been discriminated against them to contact Mr. Trasvina on (800) 669-9777.