WASHINGTON (6/12/12)--The U.S. Department of Housing and Urban Development (HUD) last week announced that Bank of America has agreed to pay up to $161,180 to settle allegations that one of the bank's California branches refused to refinance the mortgage of a woman because she was on maternity leave.
The agreement resolves a Fair Housing Act complaint that had been filed by the Fair Housing Council of Orange County (FHCOC), a non-profit fair housing organization funded by HUD.
According to a HUD release, an Irvine woman told FHCOC that a Bank of America agent offered her a 5% interest rate for a home refinance loan in December 2009, with no costs or fees. However, it said, the following month, after she had applied for the loan and provided the proper documents, the bank allegedly refused to process the women's application because she was on maternity leave.
HUD said the woman alleged that a bank agent told her that she would have to return to work full-time in order for her loan to be approved. HUD said the woman alleged that the bank would not process her application even after she informed the bank that she received the same rate of pay and benefits while on maternity leave.
In March 2010, the bank finally approved the woman's application, HUD said, but the interest rate on her loan had increased to 5.25% by that time, driving up the loan payment size.
The HUD release said a Bank of America official said: "We regret our treatment of the applicant. We take our Fair Lending responsibilities very seriously and will work with HUD to ensure our customers on maternity leave are treated appropriately during the mortgage application process."