Bank of America Charged with Discrimination

Consumer complaints have triggeredrnyet another legal problem for Bank of America. rnThe Department of Housing and Urban Development announced on Monday thatrnit is charging the Bank with discriminating against disabled homebuyers underrnprovisions of the Fair Housing Act. </p

The charges arise out of allegationsrnfrom two borrowers in Michigan and one in Wisconsin who said they were requiredrnto provide personal medical information and documentation regarding theirrndisability and proof of the continuance of the Social Security payments inrnorder to qualify for a home mortgage loan. rnHUD alleges that Bank of America first denied the loans to the borrowersrnwho relied on disability income to qualify for their home loans.  The Bank then imposed unnecessary andrnburdensome requirements as evidence of the continuation of Social Securityrnincome including provision of physician’s statements to reevaluate and approvernthe loans </p

HUD’s charge is based on arn”Secretary-initiated investigation” and is also being issued as part of thernwork by the Federal Financial Fraud Enforcement Task Force’s non-discriminationrnworking group.  The matter will now be handled by the Department ofrnJustice. </p

The Fair Housing Act makes itrnillegal to discriminate in the terms and conditions of a loan to an individualrnbased on a disability, including imposing different application ofrnqualification criteria.  The Act alsornmakes it illegal to inquire about the nature or severity of a disability exceptrnin limited circumstances which HUD said did not apply in these cases.</p

 “Holding homebuyers withrndisabilities to a higher standard just because they rely on disability paymentsrnas a source of income is against the law,” said John Trasviña, HUD AssistantrnSecretary for Fair Housing and Equal Opportunity.  “Mortgage companies mayrnverify income and have eligibility standards but they may not single outrnhomebuyers with disabilities to delay or deny financing when they are otherwiserneligible.” </p

This is just the latest legal tanglernfor Bank of America which is involved in numerous suits from both governmentrnagencies and individual homeowners arising out of its assumption of CountrywidernMortgage Corporation in 2008.  Along withrnfour other major lenders it recently settled a suit with federal and staternauthorities for a reported $25 billion and that same week reached a $1 billion settlementrnwith FHA over past lending practices.

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