The U.S. Department of Housing and Urban Development on Jan. 2 reached an agreement with Bank of America, which was accused of discriminating against a lesbian couple in Florida.
The agreement settled the claim that the mortgage lender refused to provide financing to the couple because the women are lesbians.
A news release from HUD said the agreement is the result of the first action taken against a lender under the department’s rule against discrimination based on sexual orientation and gender identity.
The rule, an Obama administration measure, prohibits lenders from basing eligibility determinations for mortgage loans insured by the Federal Housing Administration on actual or perceived sexual orientation, gender identity or marital status.
HUD general counsel Helen Kanovsky said the agreement announced Jan. 2 “demonstrates that HUD will vigorously enforce its equal access rule and pursue lenders that discriminate on the basis of sexual orientation, gender identity or marital status. By the same token, BOA should be commended for stepping up and taking immediate corrective action after HUD notified BOA of the violation.”
HUD said BOA denied a loan to a Florida couple seeking to obtain an FHA-insured mortgage because of their sexual orientation and marital status. Because one partner was not employed, the applicant enlisted her partner’s mother as a co-applicant on the loan. The couple worked with BOA for several weeks to provide loan application documents and the couple was assured by BOA that they were likely to receive a mortgage.
However, one business day before closing, BOA denied the mortgage because it did not consider the loan applicant and the co-applicant directly related because the applicant and her partner are not married. Because of BOA’s actions, the couple was not able to close on the loan.
Under the terms of the agreement, BOA agreed to pay HUD $7,500 and to notify its residential mortgage loan originators, processors and underwriters of the settlement.
Also, Bank of America will remind employees that they are prohibited from discriminating against FHA-loan applicants based on sexual orientation, gender identity or marital status.
BOA also must update its fair lending training program to include information on HUD’s rule.