HUD said it reached the agreement with B of A to resolve a Fair Housing Act complaint filed by the nonprofit Fair Housing Council of Orange County, Calif.
“Refusing to approve a mortgage loan or provide refinancing because a woman is pregnant or on family leave violates the Fair Housing Act’s prohibition against sex and family status discrimination,” HUD said.
B of A released a statement in conjunction with the settlement that said, “We regret our treatment of the applicant. We take our fair lending responsibilities very seriously and will work with HUD to ensure our customers on maternity leave are treated appropriately during the mortgage application process.”
HUD said the woman told the HUD-funded FHCOC that in December 2009 a bank agent offered her a 5% interest rate on a home refinance loan with no cost or fees, but in January 2010 after she had submitted her application and supplied necessary documents, the bank allegedly refused to process her application because she was on maternity leave.
The woman also alleged in her complaint that a bank agent told her she would have to return to work full-time to have the loan approved, and that even after she told the bank she received the same rate of pay and benefits while on maternity leave, the bank would not process her application.
HUD said the bank approved the woman’s application in March 2010, but by that time the interest rate on her loan had increased to 5.25%.
Under the terms of a conciliation agreement, B of A will pay $30,000 to the unnamed woman, $16,180 to her attorney and $15,000 to the FHCOC. The bank also will create a $100,000 compensation fund to pay damages to loan applicants or borrowers who may have been denied a loan, subjected to adverse loan terms, or had their loan application delayed because they were pregnant or on maternity leave.
The bank also is requiring all of its loan officers nationwide to complete annual fair lending training, according to HUD.