On April 30, 2012, the United States Department of Justice announced the settlement of a lawsuit against the Mortgage Guaranty Insurance Corporation (MGIC) for discriminating against women on maternity leave in violation of the Fair Housing Act. According to its press release, the settlement is the DOJ’s first involving discrimination against women and families in mortgage insurance.
The case, which had been filed in July 2011 in the U.S. District Court for the Western District of Pennsylvania, alleged that MGIC required women on maternity leave to return to work before the company would insure their mortgages even for women who had a guaranteed right to return to work after the leave.
According to the DOJ,
The settlement, which was approved by the court [April 30, 2012], establishes a $511,250 fund to compensate 70 individuals whom the United States identified as aggrieved by the alleged discriminatory treatment between 2007 and 2010. The settlement also requires MGIC to pay a $38,750 civil penalty to the United States. The Department of Justice identified the aggrieved individuals based on its extensive review of MGIC’s mortgage application records. MGIC cooperated with the United States in turning over records during the course of settlement negotiations.
The settlement also requires MGIC to follow a number of detailed nondiscriminatory provisions in its future review of mortgage insurance applications involving women or men who are on, or have returned from, paid or unpaid leave related to the birth, adoption or foster care placement of a child. The settlement also requires MGIC to monitor its treatment of applicants on leave to care for a new child, to train its employees on the requirements of the fair housing laws, and to provide nondiscrimination notices to mortgage applicants.
The DOJ’s lawsuit is separate from a private class action involving similar claims. The DOJ noted that individuals compensated as part of the DOJ settlement remain eligible to receive compensation from that class action lawsuit.
The DOJ’s press release announcing the settlement is available here.