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HUD   >   Press Room   >   Press Releases   >   2014   >   HUDNo_14-098
HUD No. 14-098
Elena Gaona
(202) 708-0685
August 13, 2014


WASHINGTON - The U.S. Department of Housing and Urban Development (HUD) announced today that Freedom Mortgage Corporation, a national residential mortgage lender based in Mt. Laurel, New Jersey, will pay $104,000 to settle allegations that it discriminated against loan applicants with disabilities by requiring them to provide medical or other documentation regarding their disability.

The Fair Housing Act makes it unlawful to discriminate in the sale, rental, and financing of dwellings, and in other housing-related transactions, based on race, color, national origin, religion, sex, family status, or disability.  This includes requiring persons with disabilities to provide medical or other documentation not required of mortgage applicants who are not disabled.

"Applicants who are otherwise qualified for a home loan may not have additional requirements placed on them because of a disability," said Gustavo Velasquez, HUD's Assistant Secretary for Fair Housing and Equal Opportunity. "We are pleased that this national mortgage lender, through the agreement, is making a commitment to comply with its obligation to treat persons with disabilities the same way they treat those who are not disabled."

The agreement settles a HUD Secretary Initiated Complaint filed in 2013, alleging that Freedom Mortgage’s underwriting policies and practices subjected persons with disabilities to different terms and conditions from other applicants by requiring, among other things, that they provide doctor’s notes or letters from the Social Security Administration that their disability income would continue for three years. Freedom and HUD identified 69 applicants with disabilities subjected to such terms and conditions.

In one case, a loan applicant provided medical documentation of his disability, a Department of Labor Work Capacity Evaluation form, and a benefits statement showing regular disability payments since 2009. Nonetheless, Freedom Mortgage allegedly continued to request proof that the income would continue for at least three years.

Under the terms of the agreement, Freedom will establish a three-tiered system of relief for the 69 aggrieved applicants.  Under the tiered system, they will each receive $1,000, $2,000, or $5,000 in damages. In addition, Freedom will amend its underwriting guidelines to abolish disability-related income verification requirements for applicants who receive disability income, and require employees to attend training on the Fair Housing Act.


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