June 3, 2011
Outrage of the week: On maternity leave? No home loan for you!
[Photo by Flickr user Xbeckie boox]
The New York Times has reported that a Kenmore oncologist who was approved for a mortgage while pregnant was later dumped by her lender for taking maternity leave, despite her leave being 100 percent paid. Houston-based lender Cornerstone Mortgage told Elizabeth Budde, 34, that it could not finalize her loan because "maternity leave is classified as paid via short-term or temporary disability income" -- in other words, income that couldn't help her qualify for a loan.
Budde and her real estate agent eventually were able to prove to Cornerstone Mortgage that she was indeed collecting her entire salary while on maternity leave, and the lender approved her loan. The Department of Housing and Urban Development added some icing to the cake when it brought a complaint against Cornerstone Mortgage, claiming it violated the Fair Housing Act, which protects borrowers against such discrimination. Although the mortgage company maintains it violated no laws, it awarded Budde $15,000 in damages and created a $750,000 settlement fund for other pregnant borrowers who come forward with the same complaint against the lender.
I get that the lending market has greatly clamped down since the recession. (I experienced this firsthand last year while trying to secure a home loan as a full-time freelancer. Banks have a hard time understanding that self-employed people can make enough money to pay their bills.) But denying loans to people on paid family leave? What's next -- rejecting home loan applicants who work for companies having a bad quarter?
Have an outrageous workplace news item to share? Feel free to send it my way. I may use it in a future post.
Karen Burns is the author of The Amazing Adventures of Working Girl, a career guide based on her 59 jobs over 40 years in 22 cities.
Lisa Quast is a certified career coach, mentor, business consultant, former corporate executive and author based in the Seattle area.
Randy Woods writes about job-search tools, networking techniques and other tips to help you land your dream job.
Matt Youngquist is the president of Career Horizons, a career counseling firm.
Natalie Singer is a Seattle writer, editor and small-business owner.
Michelle Goodman is the author of "My So-Called Freelance Life" and "The Anti 9-to-5 Guide."
Paul Anderson helps professionals in transition find their desired employment.
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