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09.16.2019

Following an investigation that uncovered multiple instances of unfavorable treatment by Webster Bank of home loan applicants who were—or planned to be—on temporary parental or adoptive leave, Westchester Residential Opportunities, Inc. (WRO) has entered into a settlement agreement with Webster designed to ensure such applicants receive fair and equal access to mortgage loans going forward. Relman, Dane & Colfax represented WRO in the matter.

WRO’s investigation identified instances in which Webster told applicants that they had to return to work from maternity leave before their loan could close or that even paid maternity leave status meant they could only be qualified on their spouse’s income. Potential borrowers also were not advised that they could use savings to supplement maternity pay for purposes of qualifying for a loan.

The agreement—announced jointly by WRO and Webster on September 6, 2019—provides for the following:

  • Implementation of revised mortgage lending guidelines to ensure uniform evaluation of an applicant’s income from temporary leave relating to childbirth or adoption;
  • Establishment of a fund of $700,000 to compensate potentially eligible individuals; and
  • A donation of $225,000 to WRO to support housing counseling activities, including its first-time homebuying education and counseling program.
  • Training to ensure Webster staff properly implement the new guidelines

The agreement was achieved without litigation, and resolves WRO’s fair lending concerns. Webster denies any wrongdoing as part of the resolution.

Relman, Dane & Colfax’s team was led by Sara Pratt, Andrea Lowe, and John Relman, with assistance from paralegals Amanda Borquaye and Isabel Martin.

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