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HUD: bank discriminated against homebuyers with disabilities

Bank of America charged

This week, the U.S. Department of Housing and Urban Development (HUD) charged Bank of America for allegedly discriminating against homebuyers with disabilities, stating that the bank imposed “unnecessary and burdensome requirements on borrowers who relied on disability income to qualify for their home loans and required some disabled borrowers to provide physician statements to qualify for home mortgage loans.”

The Fair Housing Act prohibits lenders to impose different application or qualification criteria on homebuyers based on whether or not they are disabled and even inquiring about a disability is illegal.

“Holding homebuyers with disabilities to a higher standard just because they rely on disability payments as a source of income is against the law,” said John Trasviña, HUD Assistant Secretary for Fair Housing and Equal Opportunity. “Mortgage companies may verify income and have eligibility standards but they may not single out homebuyers with disabilities to delay or deny financing when they are otherwise eligible.”

According to HUD’s charge, Bank of America allegedly asked some borrowers for proof of their disabilities and sought evidence of the continuation of their Social Security income before approving loans, after first denying them.

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HUD’s charge is based on a “Secretary-initiated investigation,” and the investigation of complaints filed by two individual borrowers in Michigan and one borrower in Wisconsin who claimed that Bank of America required them to provide personal medical information and documentation regarding their disability and proof of continuance of their Social Security payment in order to qualify for a home mortgage loan.

The charge is also being issued as part of the work being conducted by the Federal Financial Fraud Enforcement Task Force’s non-discrimination working group. The matter has been turned over to the Department of Justice.

Photo courtesy of James Barath.

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Tara Steele is the News Director at The American Genius, covering entrepreneur, real estate, technology news and everything in between. If you'd like to reach Tara with a question, comment, press release or hot news tip, simply click the link below.

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