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01 May 12 Mortgage Insurance Case Gets Settled by MGIC

According to the Department of Housing and Urban Development, Carly Neals filed a complaint with HUD alleging MGIC had discriminated against her when it preconditioned insuring her mortgage loan on the early termination of her maternity leave and subsequent return to work. After investigating the complaint, and concluding that the parties were unable to reach a settlement, HUD issued a charge of discrimination and referred the case to the Department of Justice (“DOJ”).

Carly Neals applied in May 2010 with PNC Mortgage to get a home loan refinance on the house she owns jointly with her husband in Wexford, PA. Neals is the mother of three children, the youngest was born on June 21, 2010, and PNC determined, based on Fannie Mae’s underwriting guidelines, that her request to borrow 90% of the value of her home required private mortgage insurance. Mortgage lenders typically require applicants seeking to borrow more than 80 percent of their home’s value to obtain mortgage insurance. Neals’s loan application documented her wage and bonus income from her full-time job for the previous two years. This documentation included pay stubs from April 29, 2010, and May 13, 2010, showing net pay of $2,148.98 in each two-week pay period. After giving birth to her youngest son on June 21, 2010, Neals began a period of fully paid maternity leave from her job.

Read the original Forbes article.


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