WASHINGTON — The Department of Housing and Urban Development said Monday that it has charged Bank of America Corp. with discriminating against disabled home buyers by asking them for medical information and proof of federal disability income.
The government charged that the bank violated the U.S. Fair Housing Act, which bars lenders from imposing different qualification standards on disabled borrowers. Under federal law, it is illegal for lenders to ask about the severity of a disability.
"Holding home buyers with disabilities to a higher standard just because they rely on disability payments as a source of income is against the law," said John Trasvina, assistant HUD secretary for fair housing. "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."
A Bank of America spokesman said the company's policy is to "comply with all applicable fair lending laws and regulations" and declined to comment further.
HUD said the Justice Department would take up the case, which is based on complaints filed by borrowers in Michigan and Wisconsin. HUD's complaint against the bank noted that mortgage-finance company Fannie Mae advises lenders that disability income is "considered stable, predictable and likely to continue."
