June 11, 2013
The FHA/HUD official site has issued a press release announcing the settlement of a housing discrimination case involving Bank of America, “settling allegations that the Charlotte, NC-based lender and Fannie Mae violated the Fair Housing Act by denying a borrower’s application to modify her mortgage loan because she did not provide sufficient information about the nature of her disability.”
We report on such cases here as they happen as a reminder to borrowers that they are often the only line of defense against violations of the Fair Housing Act. Without reporting such discrimination cases, it’s possible they may never be prosecuted or settled. In this particular instance, HUD officials make it quite clear what the rules are.
“People with disabilities should not have to answer unnecessary questions about the nature of their disability when seeking a loan modification,” said Bryan Greene, HUD General Deputy Assistant Secretary for Fair Housing and Equal Opportunity. “HUD will continue to take action against lenders that subject persons with disabilities to discriminatory practices.” Greene was quoted in an FHA/HUD press release announcing the settlement, which describes the case as follows:
“According to the complaint, a San Bruno, CA, woman applied for a loan modification at Bank of America that would have reduced her interest rate and made it easier for her to pay her mortgage after her disability caused her to miss several months of work. During her extended leave of absence, the woman used her savings to pay her mortgage. Fearing that she would not be able to continue paying her mortgage without a lower interest rate, the woman applied for the loan modification, citing her physical ‘hardship.'”
The press release continues, stating that a loan officer contacted the applicant requesting more details about her condition.
According to the press release, “The woman provided the loan officer with a letter from her physician, a current medical bill, and a letter from her employer certifying her approved leave of absence due to her disability. Still, the bank denied her application, allegedly telling her that she had not provided sufficient information about the nature of her disability.”
“Even after the woman provided another letter from her physician and insurance records showing her medical treatment between 2007 and 2011, the bank reportedly denied her modification application and Fannie Mae allegedly stated that her doctor’s letters and other documentation were insufficient to show that she was permanently disabled.”
Under the agreement, FHA/HUD has announced that Bank of America will pay the woman $22,449, and is also required to offer “fair lending training to its newly-hired employees.”
If you believe you have been the victim of such discrimination, contact the FHA and HUD immediately by calling 1 800 669-9777 (voice) or (800) 927-9275 (TTY).
Do you have questions about FHA home loans? Ask us in the comments section.
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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