Banking Law

Maternity Leaves are Derailing Otherwise A-OK Mortgage Applications


By law, at least as the real estate industry understands the rules, a mortgage lender can’t ask a woman if she’s pregnant.

But it can inquire whether her income is about to change, and if that change is for a three-month maternity leave a growing number of lenders will refuse to consider her income toward required qualifications for a mortgage, reports the New York Times.

Although long-term disability income would count, maternity leave is only temporary and there’s no guarantee the mom will return to work afterward, the article explains.

For Dr. Elizabeth Budde, 33, of Kenmore, Wash., an out-of-office auto-reply to a lender’s e-mail notifying her she had been approved for a mortgage nearly cost her family the home by informing the lender that she was on maternity leave.

“The reason we were buying the house was because we were having a baby,” says Budde, who is the family’s primary earner while her husband is in graduate school. “And now we got punished for having a baby.”

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