Lender to Pay $12,000 to Settle Claims it Denied Loan to Woman on Maternity Leave

WASHINGTON – The U.S. Department of Housing and Urban Development announced that it has reached an agreement with Luxury Mortgage Corporation (LMC), a mortgage lender based in Stamford, Connecticut, settling accusations that the lender discriminated against a woman by denying her mortgage loan because she was on maternity leave.  Under the settlement, LMC agrees to pay the woman who was denied the mortgage $12,000. 

The settlement is the result of a complaint that was filed by a couple who claimed LMC discriminated against them when it denied the woman a mortgage loan because she was on maternity leave. The woman  alleges that even though her employer provided a letter stating that she was on paid maternity leave, LMC told her that the letter was not sufficient.  The Fair Housing Act prohibits housing discrimination in sales, rental, and lending based on a person’s sex, orfamily status.

“A woman’s access to a mortgage loan shouldn’t hinge on her maternity status,” said John Trasviña, HUD Assistant Secretary for Fair Housing and Equal Opportunity.  “Mortgage professionals have a right to protect their business interests, but lending practices that involve denying mortgages to expectant mothers, especially when they are on paid leave and plan to return to work, violate the law.”

In addition to compensating the woman who was denied the mortgage $12,000, LMC, while admitting no violation of the law, agrees to change its lending policy to approve mortgage loans to qualified women who are pregnant or on maternity/parental leave, including leave for adoptions.

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