Mortgage Guaranty settles home insurance bias claim - Pittsburgh Post Gazette

May 3, 2012 12:13 am

Pittsburgh Post-Gazette

The U.S. Justice Department and Milwaukee-based Mortgage Guaranty Insurance Corp. have settled a lawsuit in which the government said the company improperly refused to underwrite the refinancing of a Pine woman's home while she was on maternity leave.

The 26-page pact bars Mortgage Guaranty from discriminating against insurance applicants on the basis of family status. It requires the firm to consider people who are on parental leave to be employed as long as they intend to return to work.

The lawsuit was filed when Carly Neals, 33, the mother of three young children, tried to refinance her family's home in May 2010. Mortgage Guaranty refused to insure the loan until she returned to work despite the fact that her pay while on maternity leave was the same as her regular salary, the suit said.

The company must pay $50,000 to Ms. Neals, $38,750 to the federal government, and smaller amounts to anyone else who was denied mortgage insurance for family status reasons.

"Maternity leave is a protected status," said attorney Adrian Roe, who represented Ms. Neals in a parallel, private lawsuit that was also settled. "The law protects people who just had kids."

U.S. Magistrate Judge Robert C. Mitchell approved the consent order ending the case Monday.

First Published May 3, 2012 12:00 am

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