Pregnancy hurts mortgage lending

You have to know this if you need a house to raise a family in. You can’t get a mortgage loan in case you are pregnant and quitting your job for the family. The economic meltdown, housing crisis and credit crunch have mortgage lenders running scared. There is a Pregnancy Discrimination Act that does not allow this; however, mortgage lenders get away with it saying strict standards aren’t being met by the couple.

Pregnancy discrimination caused by all the new mortgage lending standards

Freddie Mac and Fannie Mae began a loan quality initiative which is where the pregnancy discrimination is coming from. 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. Under the loan quality initiative, lenders must document that borrowers have enough income to pay for the loan on closing day, not after the contract was signed. If you want the loan, you also have to prove that you’ll have that income for one more three years.

Mortgage lenders have no mercy with 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. Anybody with maternity leave won’t qualify for loans with Fannie and Freddie since 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 used the example of a couple expecting a baby within weeks. The house they wanted needed both salaries for them to be able to get a mortgage loan. The mother won’t qualify when the loan closes anymore since she is not “employed” any longer.

Those wanting a mortgage aren’t included in Pregnancy discrimination act

Pregnancy isn’t being discriminated against, as outlined by mortgage lending; it’s just income. Lawyers.com reports that the Equal Credit Opportunity Act prohibits lenders from discriminating against gender and marital status. 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 calls is sex discrimination when someone discriminates against a woman who has anything related to childbirth going on in her life. The act was really only placed for employment purposes.

Citations

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