Monday, July 26, 2010

Don't try to get mortgage lending if pregnant

You need to know this if you need 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. The economic meltdown, housing crisis and credit crunch have mortgage lenders running scared. 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

Pregnancy discrimination by mortgage lenders may be an inadvertent consequence of a loan quality initiative that was launched earlier this year by Fannie Mae and Freddie Mac. Before loans are finished, the financial status of a borrower has to be checked again because of the initiative, as outlined by the New York Times. The loan quality initiative demands that borrowers be qualified for the loan they’re receiving on the day the loan closes instead of when the papers are all signed and finished. The income has to be guessed to continue for the next three years also for the loan.

Lenders hate seeing maternity leave

Maternity leave makes it easier for mortgage lenders to get away with pregnancy discrimination. Short term disability insurance is all mortgage lenders see. Anyone with maternity leave won’t qualify for loans with Fannie and Freddie because the payments do not continue for three years. These mortgage lenders will require the new mother to reapply for the mortgage once she returns to work. The times article shows an example with a couple that is expecting within the relatively near future. They wanted to make an offer on a home, however they needed both of their salaries to qualify. The mom isn’t “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

Income is what mortgage lenders use as a determining factor, not pregnancy. When it comes to lending, Lawyers.com teaches us that gender and marital status are the only things protected. Lenders can’t ask you how you are likely to raise kids because of the act also. Lenders are allowed to ask anything they want about expenses, even about your children’s expenses. The federal government moved to make pregnancy discrimination illegal in 1978. The Pregnancy Discrimination Act declares that discrimination due to pregnancy, childbirth or related medical conditions is unlawful sex discrimination. The act only refers to employment though.

Find more info on this topic

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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