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Yes, hard to believe the Bank the everyone loves to hate could go much lower in the estimation of the public, but according to the Department of Housing and Urban Development (HUD), Bank of America (or BOA as I like to call it in honor of the Boa constrictor that will squeeze its prey to death before eating them) imposed "unnecessary and burdensome requirements" on any borrower who relied on disability income, such as myself and my wife (fortunately we do not have our mortgage with BOA).  Here' the story from Reuters:

HUD alleged the second-largest U.S. bank by assets imposed "unnecessary and burdensome requirements" on borrowers who relied on disability income to qualify for their mortgages. The charge, now being handled by the Justice Department, is based on complaints by two borrowers in the state of Michigan and one in Wisconsin. [...]

HUD alleged that Bank of America asked some borrowers for proof of their disabilities and requested information about their Social Security income before approving the loans, which were initially denied.

Now anyone who has ever had to apply for disability benefits, whether from a private insurance company or from the Social Security Disability office, then you know how they very frequently put disabled people through the wringer six ways to Sunday, before (after often spending months refusing benefits and requiring a lengthy appeal process) finally granting you the disability income you are owed. So having to prove you are disabled all over again to a f**king bank is beyond the pale.  At least in my book.  It's also illegal.

 Under the Fair Housing Act, a lender may not "[s]et different terms or conditions for purchasing a loan" for anyone who is disabled.  Specifically the law states that:

Sec. 805. [42 U.S.C. 3605] Discrimination in Residential Real Estate-Related Transactions

(a) In General.--It shall be unlawful for any person or other entity whose business
includes engaging in residential real estate-related transactions to discriminate against any person in making available such a transaction, or in the terms or conditions of such a transaction, because of race, color, religion, sex, handicap [i.e., disability], familial status, or national origin.

Obviously, requiring someone to prove they are disabled after they have already been granted disability benefits is exactly the sort of discriminatory lending practice the law was intended to prohibit.  No doubt BOA intended to set up these barriers in order to discourage borrowers from obtaining loans from BOA.  No doubt many disabled borrowers when confronted with these additional obstacles to obtaining a mortgage loan looked elsewhere for the mortgage rather than file an appeal.  Indeed, I suspect many disabled people are not even aware that the Fair Housing Act prohibits these burdensome types of loan underwriting practices by banks.  The fact the the Justice Department is now involved in these cases ought to tell you everything you need to know about what their prosecutors think about the likelihood of success on the merits.  In general, the DOJ doesn't prosecute fair housing act cases unless they are fairly certain that they have a slam dunk.

Still, I suppose there is still time for BOA to settle for a small slap on the wrist, so people with disabilities (and anyone else for that matter) be forewarned.  Take your banking elsewhere.  Bank of America is scum.

Originally posted to Steven D on Mon Feb 27, 2012 at 01:20 PM PST.

Also republished by Income Inequality Kos and ClassWarfare Newsletter: WallStreet VS Working Class Global Occupy movement.

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Comment Preferences

  •  Tip Jar (6+ / 0-)

    "If you tell the truth, you'll eventually be found out." Mark Twain

    by Steven D on Mon Feb 27, 2012 at 01:20:34 PM PST

  •  Can you get a loan for a home (3+ / 0-)
    Recommended by:
    Steven D, ladybug53, magicsister

    while getting disability?

    I want a garden sooo bad.

    Education is a progressive discovery of our own ignorance.

    by Horace Boothroyd III on Mon Feb 27, 2012 at 01:26:44 PM PST

    •  Horace (2+ / 0-)

      Bank underwriting practices are based on current income (or should be) not expected income in the future.  While most private disability policies and SSDI will pay you a lump sum for the days you were considered eligible but were not yet receiving disability income, it's not something a mortgage lender would consider in making a decision on a loan application.

      If you are already receiving disability income, then they should consider it just as they would consider any other source of income when determining your eligibility for a loan.  That's the law BOA is charged with having violated, making it harder for people with disabilities to qualify for a loan despite the fact they were already receiving disability benefits.

      "If you tell the truth, you'll eventually be found out." Mark Twain

      by Steven D on Mon Feb 27, 2012 at 01:40:42 PM PST

      [ Parent ]

      •  one small note: most require a statutory period (0+ / 0-)

        of disability before you can apply and if benefits are granted retroactively, there is a limit as to how far back you can go for benefits, from the date of your initial application.  SSDI only back dates to 1 year before the initial date of application and does not recognize partial disability.  Work for one minute during your qualification period and you are disqualified  

        •  Not true. (0+ / 0-)
          Work for one minute during your qualification period and you are disqualified.
          You can have up to three months of "unsuccessful work attempt" IF you stop work at the end of that time for the same reason (same medical condition) as you stopped the first time.  

          Renewable energy brings national global security.     

          by Calamity Jean on Mon Feb 27, 2012 at 04:15:35 PM PST

          [ Parent ]

          •  I am repeating what the eligibility worker (0+ / 0-)

            and the ALJ stated to me in determining if I had done any work during the statutory period.  The important word here is unsuccessful and how SSDI interprets such an attempt to be successful or unsuccessful (I know of one case where a worker lost benefits after it was discovered she was able to chop and split wood despite a debilitating back injury according to her records)
            http://www.ssa.gov/...

    •  Sure you can. I did. You just have to (2+ / 0-)

      qualify. Doesn't matter WHERE your money comes from, just that you have a sufficient amount and other qualifying factors. If you're looking for a McMansion, it isn't going to happen. I own a mobile home. 1200 sq ft. 3 bedrooms. It's not beautiful, but it's only 8 years old.

      “Labor is prior to, and independent of, capital. Capital is only the fruit of labor, and could never have existed if labor had not first existed. Labor is the superior of capital, and deserves much the higher consideration.” ~Abraham Lincoln

      by second gen on Mon Feb 27, 2012 at 02:15:06 PM PST

      [ Parent ]

      •  just a general note, not commenting on your (1+ / 0-)
        Recommended by:
        second gen

        specific situation but many mobile home dealers are a bit on the shady side, for example, putting a mobile home on your lot but requiring that your mortgage back to them include the mobile home and the lot.
        so if you own a lot worth $12K and you place a $40K mobile home on the lot and tie them together in your mortgage, when you default on the mobile home, you lose the lot as well.

        Bankers, dealers, they are all out to make money off you so it is essential you have your own savvy real estate attorney and not one that the bank or dealer suggested to you

        •  My home is on a rented lot. It is, in fact, (0+ / 0-)

          co-signed by the property owner. I have no problem with that. I was in foreclosure when I purchased this home. I wasn't going to get a loan anywhere else and would be paying twice the rent that I pay on lot+mortgage right now. I wouldn't recommend it for everyone, but it works for me. I'm almost paid off.

          “Labor is prior to, and independent of, capital. Capital is only the fruit of labor, and could never have existed if labor had not first existed. Labor is the superior of capital, and deserves much the higher consideration.” ~Abraham Lincoln

          by second gen on Mon Feb 27, 2012 at 04:02:23 PM PST

          [ Parent ]

          •  Let me clarify. I have no problem with it, (0+ / 0-)

            mostly because I was well aware that this was what I was signing. When I purchased my home that I lost in foreclosure, there was all sorts of fine print, and mysterious rules I had no knowledge of. At least this time, going in, I knew exactly what I was signing.

            “Labor is prior to, and independent of, capital. Capital is only the fruit of labor, and could never have existed if labor had not first existed. Labor is the superior of capital, and deserves much the higher consideration.” ~Abraham Lincoln

            by second gen on Mon Feb 27, 2012 at 04:11:10 PM PST

            [ Parent ]

  •  You'd think that a disability borrower would be (2+ / 0-)
    Recommended by:
    Steven D, Calamity Jean

    more steady, because there's no job to lose and cut their take-home.

    Today, strive to be the person you want to be.

    by GoGoGoEverton on Mon Feb 27, 2012 at 01:38:48 PM PST

    •  People can lose disability benefits (0+ / 0-)

      Each year you have to recertify that you are still permanently disabled.  Usually a Dr.'s letter will suffice, but it can happen.

      "If you tell the truth, you'll eventually be found out." Mark Twain

      by Steven D on Mon Feb 27, 2012 at 01:53:01 PM PST

      [ Parent ]

      •  getting a doc's letter can be a hassle as well (0+ / 0-)

        it has taken me up to 6 months to get a simple form filled out and then they charged me $75 for the privilege

      •  Not for Social Security or Supplemental (1+ / 0-)
        Recommended by:
        JeffW
        Each year you have to recertify that you are still permanently disabled.
        Security Income.  Recertification is every three to seven years for Social Security administered benefits.  Exactly how often a person needs to recertify for SS depends on what the original cause of disability was.  

        Renewable energy brings national global security.     

        by Calamity Jean on Mon Feb 27, 2012 at 04:19:42 PM PST

        [ Parent ]

  •  for SSDI you forget the necessity of hiring (0+ / 0-)

    an attorney for the ALJ portion of your appeal.  I paid mine $6K for 15 minutes work since I wrote and filed the initial appeal myself and had handled the claim up until time for us to appear before the ALJ

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