Posted Jun 02, 2011 08:44 pm CDT
In a federal fair housing case that represents just a fraction of the discrimination that may be occurring nationwide, a Texas-based lender has agreed to pay $765,000 and stop discriminating against women who are taking maternity leaves.
The U.S. Department of Housing and Urban Development announced the settlement yesterday. While it has not admitted liability, Cornerstone Mortgage Co. is to pay $15,000 to one applicant (Dr. Elizabeth Budde, who was initially denied a home loan because she was on a paid maternity leave) and establish a $750,000 fund to pay others believed to have been affected by the policy, according to the Houston Chronicle and the Seattle PI.
It also agreed to change its policy concerning the way it handles applications from pregnant women and others on parental leave. The PI provides a link to the conciliation agreement (PDF), which provides for payments of $7,500 to up to 100 women (or a lesser amount if more than 100 women claim discrimination).
In a press conference yesterday in New York City, John Trasviña, who serves as HUD’s assistant secretary for fair housing and equal opportunity, said nearly a dozen other lenders are also being investigated and described the Budde case as “the first in a series of actions,” reports the Washington Post in its Federal Eye blog.
“The company basically assumed or treated her as if she had no income from her employment,” said Trasviña of Cornerstone’s handling of Budde’s mortgage application.
The lender did not immediately respond to a request for comment from the PI.
An earlier ABAJournal.com post provides more information about Budde’s experience: