April15,2013

Fair Housing Month Update: HUD Takes on Discrimination against People with Disabilities in Mortgage Lending

Picture of different colored houses

By Guest Blogger Bryan Greene, General Deputy Assistant Secretary, Office of Fair Housing and Equal Opportunity, U.S. Department of Housing and Urban Development

Happy Fair Housing Month! This year, we celebrate the 45th anniversary of the federal Fair Housing Act.  This would be a happier occasion if we could announce that we had eradicated unlawful housing discrimination. We can at least take this time to acknowledge the progress we have made.

In today’s blog, I would like to bring to your attention mortgage lending practices which the Department of Housing and Urban Development (HUD) has alleged unlawfully discriminate against borrowers with disabilities, and the relief we have obtained for such borrowers.

Let’s begin with the story of a woman named Renee. When Renee applied for a loan from Bank of America to purchase a home in Michigan, she probably did not expect to be asked about her disability or to be asked to provide medical information from a doctor.  Yet that was what she said happened.  She and other borrowers alleged that Bank of America had a policy of requiring homebuyers with disabilities to submit a letter from a doctor establishing that they would continue to receive Social Security Disability Income (SSDI) benefits for at least three years.  In some cases, borrowers said the bank inquired about the nature and severity of their disabilities.

Renee provided a Social Security Benefits Statement and other documents that substantiated her SSDI income.  None of these documents suggested that her benefits had an expiration date.  Still, she said, Bank of America was not satisfied, and required her to provide a letter from a doctor identifying her disability.  Renee complied, in order to get the loan.

In addition to Renee, a borrower in Wisconsin and another in Michigan also alleged they were subject to the same invasive inquiries from Bank of America. The Wisconsin borrower had provided a Social Security benefits award letter and other documents that substantiated his SSDI income and other income.  None of these documents suggested that his SSDI benefits had an expiration date.  Nevertheless, he alleged, Bank of America required a letter from his doctor saying that he was permanently disabled. The borrower refused to provide the letter.  Consequently, he and his wife were denied the loan, and they lost the opportunity to purchase their desired home.

The Michigan borrower similarly provided a Social Security award letter and other documents substantiating his Social Security income, which did not have an expiration date.  He said the bank requested a letter from his doctor stating that his SSDI benefits would continue for three years. The borrower withdrew his application rather than comply with the request, and he incurred additional costs to apply for a new loan.

The Fair Housing Act prohibits lenders from requiring extra income documentation from people with disabilities when their receipt of certain benefits already demonstrates a fixed income that is likely to continue. The Fair Housing Act further prohibits lenders from inquiring about the nature or severity of a disability.

The three homebuyers above came forward and filed complaints with HUD, leading the agency to undertake a broader investigation of Bank of America’s practices.  The case, which HUD charged and later referred to the Department of Justice, resulted in company-wide policy changes at Bank of America, training of underwriters and loan officers and monitoring of loan applications to ensure compliance.  Bank of America also paid a total of $125,000 to the three homebuyers, and searched for others who may have been impacted by the illegal policies in order to compensate them.

We thank the three homebuyers for bringing these practices to light.  As we work to ensure that people with disabilities have equal access to credit to purchase a home, we rely on the public to report discrimination.

For More Information:

If you feel that you have been discriminated against because of your disability in relation to buying or renting a home or apartment, you can file a Housing Discrimination Complaint online at http://portal.hud.gov/hudportal/HUD?src=/topics/housing_discrimination.

Bryan Greene is the General Deputy Assistant Secretary for Fair Housing and Equal Opportunity at the U.S. Department of Housing and Urban Development. In this position, he is charged with overseeing the policy direction and operational management of this 600-person office. Under his leadership, HUD has pursued large-scale high-profile cases that address systemic discrimination and provide widespread relief. Mr. Greene has devoted his professional career to fighting housing discrimination and promoting diverse, inclusive communities.

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