HUD: Bank of America violated Fair Housing Act

CBS/AP

The trouble continues for Bank of America (BAC). According to a press release issued Monday, the U.S. Department of Housing and Urban Development (HUD) alleges the bank is guilty of discriminating against borrowers with disabilities.

This is just one in a string of allegations against B of A, one of the nation's largest banks.

HUD claims Bank of America "imposed unnecessary and burdensome requirements on borrowers who relied on disability income to qualify for their home loans and required some disabled borrowers to provide physician statements to qualify for home mortgage loans."

New York foreclosure lawsuit names Bank of America

According to the report, Bank of America allegedly asked borrowers to provide proof of their disabilities and the continuation of their Social Security income before approving loans, after first denying them. If the allegations are true, B of A violated the Fair Housing Act.

"Holding homebuyers with disabilities to a higher standard just because they rely on disability payments as a source of income is against the law," John Trasvia, HUD assistant secretary for Fair Housing and Equal Opportunity, said in the press release. "Mortgage companies may verify income and have eligibility standards but they may not single out home buyers with disabilities to delay or deny financing when they are otherwise eligible."

According to Reuters, Bank of America said "there is no basis to allege that Bank of America has engaged in a systemic practice of discriminating on the basis of disability in connection with mortgage lending."

Foreclosure pact: Enough help for homeowners?
Consumers paying off debt helps economic recovery

The Fair Housing Act makes it illegal to discriminate based on race, color, national origin, religion, sex, familial status or handicap. This includes imposing different application or qualification criteria based on disability. Fair Housing also makes it illegal to inquire about the nature or severity of a disability except in limited circumstances which, according to HUD, are not applicable in this case.

The allegations are based on a secretary-initiated investigation of complaints filed by two borrowers in Michigan and one borrower in Wisconsin.

[amoore53]

I have been working with BOA for three years to do a loan modificatin. I filed a complaint with the OCC then the started calling me telling me that they would help me, however I had to be deliquent. The office of the president and CEO gave me this information. I knew better but out of desperation, I did get 3 month behind like they told me that I needed to be in order to get qualified for the modification they could give me. Now since I am behind and cannot get caught up since I went from making 98,000 yr to 18.00 per hour they say they cannot help me, especially since I had to change carriers just to get a job period! I have written my governor, house of reps and congress and they have also copied boa with all correspondants along with the OCC docs and complaint. Each time I get close to getting a modification and my home value is 72,000 my balance on my mortgage is 165,000! they change customer reps or tell me they have lost my paperwork, or they never recieved it. I feel like going postal on them and I want to get someone to help me that is not a scam or that I will have to pay a fortune. I want to jump on the class action law suit against BOA as well. I am a victum of the biggest cons in Banking that exist. Is there anyone out there who can give me someone who I can contact that is real to help with my loan modification. They have not sent me foreclosure paperwork due to the fact that I have so many correspondents from congress, OCC, govenor's office and house of rep. I want to keep my home and they are telling me that they cannot reduce the principle, which I owe 165,000 and my house tax paperwork says my home value is 72,000! I am a grandmother and have been in my home for 11 years, Taylor Bean and Whitaker did a refinance for me in 2008 that was bogus! I kept telling them my home was not worth what they refianced it for and they said dont worry, out of desperation I did it. Now of course they folded and I am working so hard to stay in my home.. I would greatly appreciate any and all information from anyone that can really ( not a scam ) help.. angela Moore

[kimnchris69]

My family is still having trouble with Bank of America's mortgage remodication practices? We have been trying to remodify our loan since the beginning of last year until finally, the mortgage department came down from Richmond to take our information. They told us we had to be 2 months behind to qualify. We turned in all of our paperwork needed in September 2011. A month went by with no response. We went to the bank to make a payment in October and the teller returned our money. Once someone finally returned our calls, our paperwork that was submitted had expired after two months of waiting and we had to resubmit them. We received a letter saying our home was going to be foreclosed on. We then received a letter in December giving us a foreclosure date for December 29th. Our counselor told us that we need not to worry. We wanted to pay the back payment but our counselor, Rafael, gave us the balance and told us to hold on to the money until he called us back in 45 minutes. Once he called us back, he told us that there was no foreclosure date. He told us that we could put the money at the back end of the loan. Two months later while foreclosure fees were still acruing; we were denied the remodification. So it took them 5 months to tell us that we didn't qualify, when we took it to HUD, it took them under an hour to tell us we didn't qualify. NOW THEY EXPECT US TO COME UP WITH ALMOST $12,000 when we are only a little over $ 8,600 (THAT WE COULD PAY TODAY) behind on the mortgage and the rest are fees for a foreclosure that BANK OF AMERICA INITIATED (KNOWING WE WERE GOING THROUGH THE REMODIFICATION PROCESS)AND KEPT POSTPONING THE DATES DRIVING UP THE FEES . The whole process is a SCAM !!!! WE THE TAX PAYERS HAVE BEEN FORCED TO BAIL OUT THESE BANKS YET THEY CONTINUE TO STICK IT TO THERE CUSTOMERS. BANK OF AMERICA is not practicing in good faith. BEWARE OF THE SCAM!!!

[IBBuckshot]

Let's use some common sense. Not everyone on disability is permanently disabled. Just because a person is on disability now, or has been on disability even for the last two years let's say, does not mean they are permanently disabled. If I am going to sell my home to a buyer and carry the mortgage myself as an example, I would want to know if the buyer is permanently disabled (forever) and can count on his income to make the house payment. What if he has to recertify to continue the income and if he doesn't then he has to go get a job. By the same token how can any mortgage lender qualify anyone because they may be working for the past twenty years, then qualify for a loan and loose their job the day after closing. Sounds like a gamble business.

[AlpineT9]

Fair Housing literally means "Equal Oppurtunity Housing." The premise to abiding by Fair Housing is treating everyone THE SAME. People are people--not "People with kids", "Black People,"People in wheelchairs", etc when it comes to housing.
If the financial requirements you set as a landlord, property manager, home-owner, or mortgage lender have been met, than that person can rent or own.
If Bank of America decides they want to require more medical documents of some applicants, then a new policy must go in place requiring medical documents from every single applicant (See? Treat everyone THE SAME.) Can you imagine them asking for an up-to-date physical before approving a home loan? It's irrelevant information, and you would wonder why they need it! It is just as irrelevant to a person whom is disabled. Disability is a protected class under Fair Housing just as Color, Race, Religion, National Origin, Familial Status, and Sex are protected. I think we would all be horrified if Bank of America required Jews to go through more hoops to qualify for a loan than White Americans. This is the same situation. Treating someone with disabilities differently than someone without is just wrong.
The housing business is a gamble, yes. If you choose to participate in the business, than your qualifying criteria should be the same across the board for every single person interested in the property or loan.

[gjc1n1]

Ever notice that whenever the media reports mortgage wrongding that it is ALWAYS Bank of America that tops the list? How does this pile of excrement manage to stay in business?

[MegaProcrastination]

So how does someone with a monthly income of less than $1,000 a month qualify for a mortgage?

[AlpineT9]

Disability income varies according to the kind of job you were working prior to your injury or disability. For some people in some parts of the country, it exceeds $1000 a month. Also, credit criteria, down payment, and the cost of the home all go into effect.
Mortgage lenders, like landlords, require that you be able to make the monthly payment multiplied by a certain number (ex. 3x the monthly rent or 3x the monthly payment). In my neighborhood, a foreclosed home just sold for $36,000--over a 20 year mortgage with decent credit your payment could be as low as $370 a month. Therefore, if the lender requires 2.5 x $370 per month then someone with $1000 monthly income could be approved. Source of income is protected in most states, too. From where the income arises is irrelevant as long as it's legal and hits the right number.

[tapittwice]

I can't believe that Bank Of America would be accused of wrong doing? How horrible! Hey I have an idea, let's give them some more taxpayer money to make them feel better.