When a couple applies for a mortgage, they can’t be denied simply because they are expecting a child. The Fair Housing Act makes it illegal to deny someone a loan because of their sex or family status, which includes having a baby.
Luxury Mortgage Corporation (LMC) allegedly denied a couple a mortgage because the woman was on maternity leave. The woman submitted a letter from her employer verifying that she was on paid leave, but LMC told her the letter wasn’t enough. After the couple filed a housing discrimination complaint with HUD, LMC admitted to no wrong doing, but agreed to pay the woman $12,000, and change its lending policy to approve mortgage loans to qualified women who are pregnant or on maternity/parental leave.
According to John Trasviña, HUD Assistant Secretary for Fair Housing and Equal Opportunity: “Lending practices that involve denying mortgages to expectant mothers, especially when they are on paid leave and plan to return to work, violate the law.”