Bank of America reached a settlement with the Department of Justice (DOJ) last week resolving accusations that it violated the Fair Housing Act by “asking disabled mortgage loan applicants to provide letters from their doctors to document the income they received from Social Security Disability Insurance (SSDI).” While the letters alone were not necessarily an issue, some applicants had to provide additional, detailed medical information in order to prove their income. While this caution might make some sense at first since the lender would naturally want to verify that claimed income actually existed and could be counted on to continue, “invasive requests for medical information” are considered a violation of privacy by the DOJ. BofA will not only pay up to $5,000 to eligible applicants who faced possible related discriminatory practices, but will also search around 25,000 additional loans in case other victims remain unidentified.
Although the lender opted to settle the lawsuit out of court, BofA has complained publicly via a statement made Thursday that “the government’s position has been inconsistent regarding whether a doctor’s note should be requested to validate the duration of disability income for mortgage applicants.” The bank questioned the fairness of the outcome, adding that “HUD determined this policy is in compliance for its loans, yet suggests it somehow violates the Fair Housing Act for non-HUD loans”.
Do you think that lenders should be able to request a doctor’s note to verify disability income and duration?
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About the Author (Author Profile)
Carole Ellis is editor in chief of the Bryan Ellis Investing Letter. Under Carole’s leadership, the Bryan Ellis Investing Letter has grown to over 700,000 subscribers, making it one of the largest real estate newsletters in the world. Each day, Carole directly impacts the daily thinking and conversations of real estate investors worldwide by providing thought-provoking analysis and commentary on news topics relevant to serious real estate investors.
Carole has a strong background in research and in the management of respected publications. She holds a degree in English Literature from the University of Georgia, and has substantial research experience in plant biology. She is the former editor of and writer for the University of Georgia’s Research Magazine. She’s also the author of hundreds of articles and multiple books and home study courses published under the names of her clients, many of whom are well known, highly respected real estate entrepreneurs as well.
Carole makes her home in Kennesaw, Georgia with her husband Bryan and 4 children.
Category: Real Estate