The couple, who had just had twins, thought everything was on track when their mortgage application was approved and the closing for their new Virginia home was scheduled.

But when the bank learned that the wife was on maternity leave, the lender — FirstBank — reversed its decision, denied the loan, and caused the wife and infant twins to move in with her parents. There wasn’t enough space, so her husband moved to an apartment with their 3-year-old. 

HUD has launched 15 investigations this year into bias against women on maternity leave. (Bigstockphoto)

Despite the fact that three-quarters of American moms are in the labor force, securing a mortgage while on maternity leave or pregnant is “a significant challenge and producing a steady flow of complaints,” even though the practice violates federal law, said Bryan Greene, HUD’s general deputy assistant secretary for fair housing and equal opportunity.

The U.S. Department of Housing and Urban Development launched 15 maternity leave discrimination investigations this year, part of a pattern that has the federal agency investigating 173 allegations against lenders since 2010, Greene said. 

In the latest case, FirstBank Mortgage Partners will pay $35,000 to settle allegations that it violated the Fair Housing Act when it denied a mortgage loan to the couple because the mother was on maternity leave, though she planned on returning to work outside the home. 

Both the Justice Department and HUD have settled with — and levied monetary penalties against — a number of lenders, including Bank of America, PNC Mortgage, Cornerstone Mortgage and MGIC. The MGIC settlement in 2012, involved 70 women, led to a $511,250 compensation fund for the alleged discrimination victims and a $38,750 civil penalty.

“The birth of a child or children should be a happy time for a family. But in many instances, we find lenders just stop dead at the word ‘pregnancy’ or ‘maternity leave,'” Greene said. “And in many instances women are planning to go back to work, but lenders don’t make those inquires. They go on the assumptions that women won’t return to work.”

The banks, who denied any wrongdoing as part of the settlement, argue that there will be a loss of income during maternity leave and that women may not return to work. 

But that assumption is “antiquated, ridiculous and just not true,” said Kristin Rowe-Finkbeiner, executive director of MomsRising, a Seattle-based national advocacy group with more than a 1 million members.

Her organization is working with HUD to combat the practice. The group is asking members to write in if they experience lending discrimination. The reports will then be sent to HUD. 

“America is just waking up to the fact that moms are in the labor force and we are in the labor force to stay,” said Rowe-Finkbeiner. “There’s a myth that moms are not as committed to work as Dads,” she said. “But, this is not the ‘Mad Men’ era with Betty Draper at home. Today women are very much equal if not more so in putting a roof over their children’s heads and food on the table.”

She said her organization hears about mortgage discrimination against women on maternity leave “with a degree regularity that is stunningly awful.”

And that banks need to understand that “most families can’t afford to have a full-time parent.”

Today, 50 percent of women return to work within three months after giving birth to their first child, she said. More than 70 percent of mothers with young children are in the workforce and four in ten mothers are the sole or primary breadwinner for their families. 

“It’s going to take enforcement to help make the change with lenders,” said Rowe-Finkbeiner. “We need to really start talking about what the modern family looks like.” 

On their Web site, Linda Falcão, a civil rights attorney and mother of three from Pennsylvania who was one of the first people to raise the issue, said a bank told her family they had to write a “motivational letter” explaining “why we wanted the house, and discussing, among other things, our family planning.” 

“After asking two separate mortgage reps to be excused from this aspect of the process (and being refused), and after telling them I thought it was illegal (they didn’t seem to care) I was inspired to write a satirical letter about what ‘was brewing in my uterus’ that I’ve published on a blog and shared with friends,” she said.  

Falcão said she did not send the mocking letter to the bank.

“We really needed the new house, having sold our old one at that point, so we wrote them a very bland letter stating, among other things, that we did not plan to change our family size.”

They got the loan. But after the closing, she filed a Fair Housing Act complaint with HUD, who launched an investigation.

“I took a lot of satisfaction in writing the letter —  and it got a lot of laughs from my friends and family. But the truth is that I felt genuinely humiliated and demeaned to have to discuss, with a total stranger, whether my husband and I were going to have more children or not. I didn’t then, and don’t now, think it’s any of their business.. Would you want to talk about your own reproductive plans with a stranger, especially one who was going to judge whether they were ‘acceptable’ or not?”