PNC Hit with Fine for Denying Loan to Veteran on Maternity Leave

by devteam February 7th, 2013 | Share

PNCrnMortgage has settled a suit brought by the Department of Housing and UrbanrnDevelopment (HUD) for alleged discrimination. rnThe suit charges that the Trumbull, Connecticut company violated thernFair Housing Act by requiring a mortgage applicant who was on paid maternityrnleave to return to work before it would approve her loan.   </p

ThernFair Housing Act prohibits discrimination in the sale, rental, andrnfinancing of dwellings, and in other housing-related transactions, based onrnrace, color, national origin, religion, sex, familial status, andrndisability.  HUD said that refusing to approve a mortgage loan because arnwoman is pregnant or on maternity leave violates the Fair Housing Act’srnprohibitions against sex and familial status discrimination.</p

Accordingrnto John Trasviña, Assistant Secretary for Fair Housing & Equal Opportunity,rnHUD has been investigating lenders who have allegedly required women tornterminate their maternity leave early in order to qualify for a home loan sincern2010.  HUD settled similar cases with Bankrnof America and Mortgage Guarantee Insurance Corp in the summer of 2012.  </p

Inrnthe PNC case HUD said that the mortgage company required the woman, a Navyrnveteran, to return to work before approving the Department of Veterans Affairs-guaranteedrnloan.  Consequently the couple could notrnclose on their new home in Newington, CT, until a month later than they hadrnplanned.  Because of the delay, the seller of the home allegedlyrnrequired the couple to pay an additional $3,000.  </p

Underrnthe Agreement, PNC will pay $15,000 to the couple and review applications forrnVA-guaranteed residential mortgage loans filed in the last two years in the sixrnNew England states, Pennsylvania, and New York to identify qualified loanrnseekers whose applications were denied because they were pregnant or onrnmaternity leave.  PNC will pay $7,500rneach victim who is identified, revise its Temporary Leave/Short-Term DisabilityrnIncome policy if HUD finds that the policy is deficient, and will provide fairrnlending training to its residential mortgage loan originators, underwriters,rnand processors.</p

HUD’srnOffice of Fair Housing and Equal Opportunity and its partners in the FairrnHousing Assistance Program investigate almost 10,000 housing discriminationrncomplaints each year.

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About the Author


Steven A Feinberg (@CPAsteve) of Appletree Business Services LLC, is a PASBA member accountant located in Londonderry, New Hampshire.

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