Bank not backing a loan due to a paid maternity leave

7 Replies

Hi all, just looking for some advice/information. We recently were pre-qualified for a 5/5 ARM 20% down, offer made and accepted on a 2 family, inspection completed and accepted, attorney's are involved etc. All during this process I have been and am currently on full paid maternity leave. My pay is not changing, or my job status, but since the bank had recently learned (from me) that I am in the hospital until I deliver they are not able to back the loan. They have not confirmed any employment with where I work, or even have specifics on my due date. They have zero information. My new due date is actually prior to the closing date. While I understand we are a liability to the bank, they did zero to gather any information on my employment and pay(which is not changing at all, if anything I have received a raise since our preapproval letter given I work in a school and each year is an increase after July 1st). Thoughts or suggestions? We would appreciate it

As David often says on the podcast, have you asked, “Why?”

The underwriter mightn’t think there’s is an issue and simply making him answer might be enough to make him find an answer and see that they are wrong.

Worst case, 

Hi Wes,

Yes good point...we did ask why....and they stated the "guideline reads you must be back to work at the place you were working when approved with a full week of pay to show your return".....even though I am getting a full week of pay now and after closing...I just won't physically be at work. 

@Stephanie Lackie Your lender may have overlays internally. Fannie Mae guidelines allow to consider the income whichever is lower regular income or temporary leave income. There is another option available even though there is no income during this time but you have job. You can read all the guidelines.

B3-3.1-09: Other Sources of Income (12/04/2018).

(Not legal advice, but you might consider....) Let them know they are in violation of the federal Fair Housing Act 1968, and I’m guessing they would change their tune fairly quickly.  Depending on their language, they could be descriminating against you in several ways.

Google “Budde v Cornerstone Mortgage Company pregnancy discrimination.”  

My initial response apparently cut shorst.  I was going to say worst case, the underwriter is just not very good and/or inexperienced and to find another one that is investor friendly and willing to think outside the box to make the deal happen.

In the lawsuit I quoted above, the mortgage company indicates as much that the particular loan officer on the case was their most experienced person

Originally posted by @Harjeet Bhatti :

@Stephanie Lackie Your lender may have overlays internally. Fannie Mae guidelines allow to consider the income whichever is lower regular income or temporary leave income. There is another option available even though there is no income during this time but you have job. You can read all the guidelines.

B3-3.1-09: Other Sources of Income (12/04/2018).

 My income is not changing at all, as I am being paid while on leave...that's why I am not sure why this is even an issue