HUD SETTLES CLAIM ALLEGING BANK OF AMERICA AND FANNIE MAE
DISCRIMINATED AGAINST LOAN [MODIFICATION] APPLICANT WITH DISABILITIES
WASHINGTON – The U.S. Department of Housing and Urban Development (HUD) announced today that it has reached a Conciliation Agreement with Bank of America and Fannie Mae, settling allegations that the Charlotte, NC-based lender and Fannie Mae violated the Fair Housing Act by denying a borrower’s application to modify her mortgage loan because she did not provide sufficient information about the nature of her disability. The woman was applying for a loan modification through the Obama Administration’s Home Affordable Modification Program (HAMP).
The Fair Housing Act makes it unlawful to deny or discriminate in the terms and conditions of a mortgage or loan modification based on disability, race, color, religion, national origin, sex, or familial status.
“People with disabilities should not have to answer unnecessary questions about the nature of their disability when seeking a loan modification,” said Bryan Greene, HUD General Deputy Assistant Secretary for Fair Housing and Equal Opportunity. “HUD will continue to take action against lenders that subject persons with disabilities to discriminatory practices.”
According to the complaint, a San Bruno, CA, woman applied for a loan modification at Bank of America that would have reduced her interest rate and made it easier for her to pay her mortgage after her disability caused her to miss several months of work. During her extended leave of absence, the woman used her savings to pay her mortgage. Fearing that she would not be able to continue paying her mortgage without a lower interest rate, the woman applied for the loan modification, citing her physical “hardship.”
In responding to her request, a loan officer with the bank asked her to provide documentation relating to her medical condition. The woman provided the loan officer with a letter from her physician, a current medical bill, and a letter from her employer certifying her approved leave of absence due to her disability. Still, the bank denied her application, allegedly telling her that she had not provided sufficient information about the nature of her disability. Even after the woman provided another letter from her physician and insurance records showing her medical treatment between 2007 and 2011, the bank reportedly denied her modification application and Fannie Mae allegedly stated that her doctor’s letters and other documentation were insufficient to show that she was permanently disabled.
Under the terms of the agreement, Bank of America will pay the woman $22,449, which includes $19,349 to cover the approximate closing costs on a refinance loan, and agreed to follow HAMP and Fannie Mae’s servicing guidelines. Bank of America will also provide fair lending training to its newly-hired employees. In addition, Fannie Mae will pay the woman $3,400.
Persons who believe they have experienced discrimination may file a complaint by contacting HUD’s Office of Fair Housing and Equal Opportunity at (800) 669-9777 (voice) or (800) 927-9275 (TTY). Housing discrimination complaints may also be filed by going to www.hud.gov/fairhousing, or by downloading HUD’s free housing discrimination mobile application, which can be accessed through Apple devices, such as the iPhone, iPad, and iPod Touch.