HUD Region VI: 12-140
Patricia Campbell/Scott Hudman
(817) 978-5974/(713) 718-3107
August 1, 2012
WATERSTONE MORTGAGE AGREES TO PAY $27,000 TO SETTLE MATERNITY DISCRIMINATION CLAIMS OVER ROUND ROCK HOME
Lender to compensate woman over denied loan because she was on maternity leave as well as the homeowner and Realtor
FORT WORTH - The U.S. Department of Housing and Urban Development (HUD) announced today that Waterstone Mortgage Corporation, based in Wisconsin, has agreed to pay $27,000 to settle allegations that Cadence Lending, formerly owned by Waterstone, and two employees refused financing for the mortgage of a woman because she was on maternity leave. She was seeking to purchase in the Round Rock area. HUD reached the agreement with Waterstone to resolve three Fair Housing Act complaints filed as a result of the denial - one for the applicant, another for her Realtor, as well as for the homeowner.
The Fair Housing Act prohibits housing discrimination in mortgage lending and real estate-related transactions based on a person's race, color, national origin, religion, sex, familial status and disability. Refusing to approve a mortgage loan or provide refinancing because a woman is pregnant or on family leave violates the Fair Housing Act's prohibition against sex and familial status discrimination.
"The Fair Housing Act prohibits lenders from denying home loans to women because they are pregnant or on maternity leave," said Mark Brezina, Acting HUD Regional Administrator for the Southwest. "This settlement follows similar HUD actions involving lenders across the country. We will continue to pursue enforcement until maternity leave discrimination is eliminated."
In her complaint, the woman told HUD that in July of 2010, Cadence Lending denied a loan she was seeking at a 4.8% interest rate. She and her Realtor were told that Cadence would not close the loan until she returned to work off of maternity leave. Moreover, they were informed that lending wholesalers believed that "mothers don't go back to work" and that lending based on maternity leave pay violated Fannie Mae Guidelines. Those alleged statements further provided the basis for the settlement announced today as they are discriminatory and factually incorrect.
Under the terms of the three Conciliation Agreements, Waterstone will pay $15,000 to the woman, $5,000 to her attorney, $2,625 to her Realtor, and $875 to the Realtor's attorney. The homeowner will receive $3,500 as well. In addition, the lender will provide Fair Housing Training to all of its employees substantially involved with lending and must follow all state and federal Fair Housing Laws. And, Waterstone must adhere to Fannie Mae's Selling Guide's provisions of the proper treatment of temporary leave income.
Anyone who believes that a bank has discriminated against them during the mortgage application process because they were pregnant or on maternity leave should contact HUD at (800) 669-9777 (voice), (800) 927-9275 (TTY).
HUD's mission is to create strong, sustainable, inclusive communities and quality affordable homes for all. HUD is working to strengthen the housing market to bolster the economy and protect consumers; meet the need for quality affordable rental homes: utilize housing as a platform for improving quality of life; build inclusive and sustainable communities free from discrimination; and transform the way HUD does business. More information about HUD and its programs is available on the Internet and espanol.hud.gov. You can also follow HUD on twitter @HUDnews, on facebook at www.facebook.com/HUD, or sign up for news alerts on HUD's News Listserv.