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FHA Loans and Fair Housing Rules: Settlement Reached in Maternity Discrimination Case

November 11, 2011

FHA loans, like VA and conventional home loan programs, are subject to the Fair Housing Act, RESPA and other federal laws which work together to prevent discrimination in the housing market.

One of the rules established by these laws concerns discrimination against home loan applicants based on their family status. That includes discrimination against FHA loan applicants based on pregnancy, single parenthood, the number of children in a given family, and other factors. Such discrimination is prohibited by federal law.

The Department of Housing and Urban Development issued a press release on November 3, 2011, stating 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.”

As a result of the settlement, LMC will pay $12,000 in compensation to the woman who was denied the mortgage.

This settlement comes in the wake of a formal complaint by a couple claiming LMC discriminated against them. “when it denied the woman a mortgage loan because she was on maternity leave. The woman

Joe Wallace - Staff Writer

By Joe Wallace

Joe Wallace has been specializing in military and personal finance topics since 1995. His work has appeared on Air Force Television News, The Pentagon Channel, ABC and a variety of print and online publications. He is a 13-year Air Force veteran and a member of the Air Force Public Affairs Alumni Association. He was Managing editor for www.valoans.com for (8) years and is currently the Associate Editor for FHANewsblog.com.

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