Industry NewsMortgage

Lenders warned not to discriminate against women on maternity leave

Feds settle with Cornerstone, sue MGIC for alleged Fair Housing Act violations
Published on Jul 6, 2011

A report in the New York Times that suggested mortgage lenders had discriminated against women taking maternity leave has resulted in a settlement with Houston-based Cornerstone Mortgage Co. and charges against mortgage insurer Mortgage Guaranty Insurance Corp. (MGIC) for alleged violations of the Fair Housing Act.The Department of Housing and Urban Development (HUD) announced last year that it was launching "multiple investigations" following a July 20, 2010, report in the New York Times that some lenders had refused to count disability payments new mothers receive while on maternity leave as income.Lenders claimed the payments weren't considered a stable source of income by Fannie Mae, Freddie Mac and the Federal Housing Administration.HUD announced a settlement with Cornerstone in June that created a $750,000 victims' fund to pay lump-sum payments of $7,500 apiece to as many as 100 claimants. Cornerstone agreed to notify all borrowers who applied during a two-year time fra...

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