You need to know this if you want a house to raise a family in. Women who are pregnant and plan to stay home to take care of the baby may not qualify for a mortgage loan. Mortgage lenders are too scared that they won’t get their payments with this situation. Despite the Pregnancy Discrimination Act, mortgage lenders say they’re denying mortgages to expectant couples because they must comply with strict new standards for verifying income.
Discrimination caused with mortgage lending standards so strict
Freddie Mac and Fannie Mae began a loan quality initiative which is where the pregnancy discrimination is coming from. Fannie and Freddie made is required for a loan to go out the financial status, reports that New York Times, has to be checked at the end of the process. The last day is when borrows have to be qualified for the loan, because of the loan quality initiative. Lenders also must document that the mortgage borrower’s income is likely to continue for at least 3 years.
Maternity leave looks bad to mortgage lenders
Some mortgage lenders are flirting with pregnancy discrimination because of maternity leave. Mortgage lenders see simply a short term disability insurance they have to deal with. The disability payments don’t continue for three years meaning lenders working with Fannie and Freddie will refuse to count maternity leave as income. The mortgage has to be applied for again after going back to work. The times article shows an example with a couple that is expecting in the relatively near future. Both salaries would be required to qualify for a loan on the home they wanted. The mom is not “employed” anymore following the child is born and won’t qualify for the loan at closing anymore.
Pregnancy Discrimination act doesn’t mean those wanting a home
Mortgage lenders say they’re not discriminating against pregnancy but against income. Equal Credit Opportunity Act shows on Lawyers.com that marital status and gender can’t be discriminated against. Lenders can’t ask you how you are likely to raise children because of the act also. Any questions about expenditures can be asked though. Pregnancy discrimination became illegal in 1978. The Pregnancy Discrimination Act shows us that being prejudice against women who are pregnant, or anything like it, is just sex discrimination. The act was really only placed for employment purposes.
Additional information at these websites
New York Times
nytimes.com/2010/07/20/your-money/mortgages/20mortgage.html
Lawyers.com
lawyers.com/our-blog/archives/251-Pregnancy-Leave-Puts-Mortgage-in-Doubt.html
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