Okay, so now they’ve gone too far. Pregnant women are now denied home loans for mortgages because of their pregnant status. Yet another rung to add onto the ladder of maternal distress. The Pregnancy Discrimination Act (PDA) was an amendment added in 1978 to the Civil Rights Act of 1964. Yet, despite its 32-year history, very little has changed.
In light of the mortgage collapse debacle, the rules of lending have tightened. Strict scrutiny is the order of the day but the lenders have taken things too far. Dr. Elizabeth Budde, an oncologist in Washington State was pregnant with her first child and received an email that her mortgage had been approved. However, the email prompted an automatic response announcing that she was on maternity leave and her lenders subsequently rescinded her mortgage. Banks demand “guaranteed” income and do not give credence to short-term disability. Dr. Budde finally obtained her mortgage because she had enough sick and annual leave time that continued to pay her a full salary.
The federal government has vowed to protect the rights of pregnant women and is investigating lenders for possible discrimination. Are you pregnant and in the market to purchase a new home? Here are a few things that you should know:
1. The bank may ask you to purchase a home whose mortgage can be paid from one salary even in a dual-salaried household.
2. The bank will recheck your financial situation right before the loan closes. This includes calling your employer to verify your employment.
3. Your income has to be guaranteed to continue for at least three years.
4. According to the Department of Housing and Urban Development (HUD), your mortgage cannot be denied because of pregnancy or short-term disability.
5. A letter from your doctor (with a return date to work) and your employer (stating the return date and salary) should be enough to qualify your loan.
6. A lender cannot ask whether you are pregnant, but can ask if your employment or income situation will change.
If you have been denied a mortgage because your pregnancy, contact HUD immediately.