Corporate Governance

Reports of Credit Discrimination Against New Parents

By Anthony F. Maul

The New York Times reports that mortgage lenders are discriminating against borrowers who are out on leave from their jobs, including new parents who are out on maternity or paternity leave.  According to mortgage brokers and lenders quoted by the Times, many lenders are interpreting new federal underwriting guidelines to bar the issuance of a mortgage to prospective borrowers who are not receiving their regular salary or wages due to a leave of absence, even where the prospective borrower is receiving temporary income while on leave.  According to a spokeswoman for Fannie Mae, however, there is nothing in the federal guidelines that ?would prohibit a borrower on maternity or paternity leave from qualifying for a mortgage, as long as the borrower [has] proof at the time of the closing that his or her income would be adequate upon returning to work.?

The lending practices the Times describes may constitute illegal discrimination against new and expecting parents.  Please contact us if you have questions regarding this subject.

Full post as published by PomTalk on July 21, 2010 (boomark / email).