The U.S. Department of Housing and Urban Development reached an agreement under the Fair Housing Act on June 6 with the nation’s largest bank in a case where the bank allegedly discriminated against an individual in its loan modification procedures on the basis of her disability.
The case arose from a complaint filed to HUD in October 2012 by a woman from San Bruno, California. The woman applied to Bank of America for a loan modification, pursuant to the Home Affordable Modification Program, to reduce the interest rate on her home after her disability forced her to miss several months of work.
Even though the woman provided the bank a letter from her physician, a current medical bill, and a letter from her employer, Bank of America asked for additional documentation regarding her disability, according to an HUD news release. Along with another letter from her doctor, the woman gave the bank her insurance records for treatment between 2007 and 2011.
The bank again denied her request. Fannie Mae, the government-run corporation that provides financing to the mortgage industry, also allegedly told her the doctor’s letters were insufficient.
Under the agreement, Bank of America will provide fair lending training to its newly-hired employees. It will also pay the woman $22,449, including the closing costs of refinancing the loan. Fannie Mae will also pay the woman $3,400.
“People with disabilities should not have to answer unnecessary questions about the nature of their disability when seeking a loan modification. HUD will continue to take action against lenders that subject persons with disabilities to discriminatory practices,” said Bryan Greene, HUD general deputy assistant secretary for fair housing and equal opportunity, in a news release.
Under the FHA, it is 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.
In October 2012, the Department of Justice settled a class-action settlement with Bank of America for a variety of “unnecessary and unduly burdensome” requirements it imposed on people with disabilities.