On Monday the Department of Housing and Urban Development (HUD) said it was charging Bank of America Corp. with discriminating against homebuyers with disabilities.
According to HUD, the banking giant “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.” Bank of America allegedly did this by asking borrowers to provide proof of their disabilities and the continuation of Social Security income before approving loans, after first denying them.
If the allegations are true then Bank of America violated the Fair Housing Act. The law makes it illegal to discriminate on the basis of race, color, national origin, religion, sex, familial status or handicap. This includes imposing different application or qualification criteria based on disability. The law also makes is illegal to inquire about the nature or severity of a disability except in some narrow circumstances.
“Holding homebuyers with disabilities to a higher standard just because they rely on disability payments as a source of income is against the law,” said John Trasvia, HUD assistant secretary for Fair Housing and Equal Opportunity.
This is the third time in a year that Bank of America has run afoul of federal discrimination laws. The bank based in Charlotte, N.C., paid a $335 million fine in December to settle allegations that its Countrywide Financial unit discriminated against minorities. A federal court approved on Feb. 24 a class action against Bank of America’s Merrill Lynch division for racial discrimination.