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Home | Daily Dose | New Jersey Lender Settles Complaint
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New Jersey Lender Settles Complaint

HELOC

New Jersey-based nationwide residential lender Freedom Mortgage Corporation agreed to pay $104,000 in a discrimination settlement with the U.S. Department of Housing and Urban Development, HUD announced on August 13.

The HUD Secretary-Initiated Complaint, which was filed in 2013, alleged that Freedom Mortgage violated the Fair Housing Act by requiring loan applicants with disabilities to provide certain documentation that was not asked of applicants without disabilities. Under provisions of the Fair Housing Act enacted in 1968, a lender cannot "impose different terms or conditions on a loan, such as different interest rates, points, or fees" based on "race, color, national origin, religion, sex, familial status or handicap."

HUD and Freedom Mortgage identified 69 loan applicants with disabilities who were subjected to different terms and conditions of the loan than those without disabilities. The 69 applicants were asked to provide proof from either a doctor or the Social Security Administration that they would receive disability income for at least three years.

"Applicants who are otherwise qualified for a home loan may not have additional requirements placed on them because of a disability," said Gustavo Velasquez, HUD's Assistant Secretary for Fair Housing and Equal Opportunity. "We are pleased that this national mortgage lender, through the agreement, is making a commitment to comply with its obligation to treat persons with disabilities the same way they treat those who are not disabled."

One of the 69 applicants was asked to provide verification that his disability income would continue for three years despite already providing Freedom Mortgage with medical records documenting his disability, a Department of Labor Work Capacity Evaluation form, and proof in the form of a benefits statement that he had received disability payments regularly since 2009.

Freedom Mortgage employees will be required to attend Fair Housing Act education as part of the agreement, and the company will cease requiring applicants with disabilities to provide proof of disability-related income. Under a three-tiered system Freedom Mortgage will create, each of the 69 affected loan applicants will receive either $1,000, $2,000, or $5,000 for damage compensation.

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About Author: Brian Honea

Brian Honea
Brian Honea's writing and editing career spans 12 years across many forms of media. He served as sports editor for two suburban newspaper chains in the DFW area and has freelanced for such publications as the Yahoo! Contributor Network, Dallas Home Improvement magazine, and the Dallas Morning News. He has written four non-fiction sports books, the latest of which, The Life of Coach Chuck Curtis, is scheduled to be published by the TCU Press in Fall 2014. A lifelong Texan, Brian received his master's degree from Amberton University in Garland.

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