Industry NewsMortgage

HUD probes lender treatment of new moms

News report leads to Fair Housing Act investigations

The Department of Housing and Urban Development said it's launched "multiple investigations" following a report in the New York Times suggesting that some mortgage lenders are denying credit to borrowers because of a pregnancy or maternity leave.The story found that some lenders won't count disability payments new mothers receive while on maternity leave as income, because those payments aren't considered a stable source of income by Fannie Mae, Freddie Mac and the Federal Housing Administration.A spokeswoman for Fannie Mae told the Times that a doctor's letter with a return date to work and a letter from the mother's employer stating her expected salary when she comes back should be considered sufficient proof of stable income. But some lenders are requiring that families reapply for their loan after the mother returns to work."Lenders have every right to ascertain the incomes of families to determine whether they are eligible for a mortgage loan but they have no right ...