In the first part of this article we explored the issue of maternity leave discrimination. This time we consider the typical cure imposed by regulators.
Creditors have paid millions of dollars in damages; typically in the range of $20,000 to $30,000 per incident. In additional to paying damages, creditors are often required to implement revised policies and procedures and to conduct training.
Policies
It is common for a settlement agreement to require creditors, within thirty (30) days of the effective date of the agreement, to draft and forward for approval policies, procedures, and/or guidelines that are consistent with the Fair Housing Act with regard to the calculation and treatment of maternity, paternity, and pregnancy leave income and identifying when the regular employment income of a borrower or co-borrower on leave may be considered.
The institution is then required to adopt and implement those policies, procedures, and/or guidelines. The institution agrees to communicate the underwriting policies and requirements to its home mortgage loan officers, home mortgage loan underwriters, home mortgage loan risk managers, loan processors, and any other individual involved in the creation, application, or implementation of underwriting guidelines for home mortgage loans or risk analysis for home mortgage loans.
Training
The agencies generally require training related to the requirements of the Fair Housing Act for all employees with significant involvement in underwriting home mortgage loan applications, including all of its home mortgage loan officers, home mortgage loan underwriters, home mortgage loan risk managers, loan processors, and any other individual involved in the creation, application, or implementation of underwriting guidelines for home mortgage loans or risk analysis for home mortgage loans. Training related to the requirements of the Fair Housing Act must also be provided to all new employees with relevant underwriting responsibilities.
The final part of this article explores FNMA Guidelines for Evaluating Temporary Leave Income.
