Settlement for Lesbian Couple denied Mortgage Loan

Claim by HUD Against Bank of America

A Florida lesbian couple seeking to obtain a federally insured mortgage loan were turned down by Bank of America because of their sexual orientation and marital status.  Because the applicant’s partner was not employed, the applicant enlisted her partner’s mother as a co-applicant on the loan.

The couple provided all of the necessary loan application documents to Bank of America over several weeks and were assured that they would probably receive a mortgage. However, one day prior to closing, they were denied the mortgage so they were not able to close on the loan.

How the Bank Regarded Their Application

Because the bank did not view the loan applicant and the co-applicant directly related, as they were not legally married, their dreams were dashed. In Florida which bans same-sex marriage, they would not have been able to be legally related anyway.

How the Nation’s Department of Housing and Urban Development (HUD) Viewed The Loan

On March 5, 2012, the LGBT Equal Access Rule went into effect. It prohibits discrimination based on sexual orientation, gender identity, and marital status in public housing and HUD’s core housing programs, including eligibility, determinations for mortgage loans insured by the Federal Housing Administration (FHA).

This suit against Bank of America represents HUD’s first enforcement action taken under the LGBT Equal Access Rule. The Director of Policy for The National Center for Lesbian Rights, Maya Rupert, said that the announcement on January 2, 2013 is “a turning point for the LGBT community in its fight for equal access to fair and affordable housing. This settlement agreement shows how serious HUD is about working to ensure all people and their families can access public housing and crucial housing programs.”

Bank of America Settles Antigay Discrimination Claim with HUD

According to a statement from HUD, under the terms of the agreement, Bank of America  agreed to pay HUD $7,500.  BOA has to notify its residential mortgage loan originators, processors and underwriters of its settlement agreement with HUD.

It’s mandatory that BOA advise its employees that they are prohibited from discriminating against Federal Housing Authority-insured loan applicants on the basis of sexual orientation, gender identity or marital status. BOA also has to update its fair lending program to include information on HUD’s rule.