HUD continues to aggressively police alleged discrimination against mortgage loan applicants who are on parental leave and/or who receive disability income. HUD recently announced a multimillion-dollar settlement with a national bank to resolve allegations that the bank’s home mortgage unit discriminated against women on maternity leave. The bank is paying a total of $165,000 to the six claimants and will establish a fund of at least $3.5 million and as much as $5 million to pay hundreds of other applicants who HUD alleges were discriminated against. In September, the agency announced a $35,000 settlement with a Tennessee-based mortgage lender regarding alleged Fair Housing Act violations, when the lender denied a mortgage loan to a couple because one applicant was on unpaid maternity leave, ignoring the husband’s salary and the wife’s short-term disability insurance payments. The settlement follows a series of five-and six-figure settlements with mortgage lenders and mortgage insurers beginning in 2012, and parallel investigations of dozens of institutions. Similarly, HUD and DOJ continue to pursue the complaints of disabled loan applicants who were required to provide medical documentation regarding their disability in order to qualify for a loan. These settlements highlight the fine line underwriters must walk in determining a borrower’s ability to repay a loan and, in turn, the continuing importance of up-to-date fair lending training, monitoring, and other compliance management work.