Pregnancy hurts mortgage lending

If you would like to start your family but also need the house for it, you should know something important. 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 are denying mortgages to expectant couples because they must comply with strict new standards for verifying income.

Strict lending standards for mortgage loans cause pregnancy discrimination

Pregnancy discrimination is happening because Fannie Mae and Freddie Mac start a loan quality initiative long before they were ousted. Before loans are finished, the financial status of a borrower has to be checked again because of the initiative, according to the New York Times. The last day is when borrows have to be qualified for the loan, because of the loan quality initiative. Lenders also must document the mortgage borrower’s income is likely to continue for at least 3 years.

Mortgage lenders have no mercy with maternity leave

Discriminating against pregnant women is easier when looking at the maternity leave that must be taken. Mortgage lenders see simply a short term disability insurance they have to deal with. The disability payments don’t continue for 3 years meaning lenders working with Fannie and Freddie will refuse to count maternity leave as income. You won’t be able to apply for a mortgage loan again until you are back to working full time. The Times article used the example of a couple expecting a baby within weeks. They wanted to make an offer on a home, but they needed both of their salaries to qualify. The mortgage broker said the expectant mother would not be considered “employed” when it was time to close the loan, which would probably disqualify her.

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

Mortgage lenders say they are not discriminating against pregnancy but against income. Equal Credit Opportunity Act shows on Lawyers.com that marital status and gender can’t be discriminated against. The Equal Credit Opportunity Act also bars lenders from asking about your plans for having or raising kids. Lenders are allowed to ask anything they want about expenditures, even about your children’s expenses. The federal government moved to make pregnancy discrimination illegal in 1978. The Pregnancy Discrimination Act shows us that being prejudice against women who are pregnant, or anything like it, is just sex discrimination. The act only refers to employment though.

Discover more details 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