Lender denies client because of pregnancy: Broker

Lender denies client because of pregnancy: Broker

Lender denies client because of pregnancy: Broker One broker’s application was denied by the lender after he voluntarily disclosed his client's pregnancy.

“There is a Canadian citizen that applied for a mortgage and a person who applied to be a Canadian citizen – they’re a couple – and I disclosed to the lender that she is pregnant and that she has applied for permanent residency,” Stephane Prevost, principal broker at Opulent Mortgages told MortgageBrokerNews.ca. “The lender declined the file because we were using the combination of both incomes; she’s on a work visa and she has been here for four years.”

Prevost told the lender about the pregnancy because he believed it would escalate her application for permanent residency and demonstrate her commitment to staying in Canada. However, the lender – whose name Prevost refused to disclose – believed the pregnancy could potentially change the client’s income level.

“The lender declined the file because, as they said, she is pregnant they can only use 60 per cent of the income,” Prevost said. “I (voluntarily) disclosed to the lender she was pregnant to solidify the fact that she is on a work visa, that she had applied for permanent residency, and it would escalated the process for her to become a permanent resident.

“But we don’t know what the outcome of the pregnancy will be and as far as I’m concerned it’s discrimination.”

According to Prevost, the clients are “extremely qualified,” have high credit, a “very reasonable income,” and low debt to income ratios.

However, this particular file may eventually get approved.

“(They refused) until five minutes ago when they found out I was going to make a complaint and it got escalated and (now) I’ve got a verbal approval,” Prevost said. “This issue is resolved but I’ve never once seen a lender use that as an excuse to get out of the deal.”
  • Marcy Berg 2014-04-08 11:10:34 AM
    This is news? It happens all the time. It's positively draconian some of the methods lenders use to determine income for pregnant women. It's also worth noting how women in middle of separation and divorce are treated when trying to buy out a spouse. Sadly, its part of my daily practice. I applaud this broker for going public with the experience.
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  • Anthony C. 2014-04-08 11:34:06 AM
    To Stephane Prevost:

    In the chance you read this message and provided that you still have retention of the client and the deal is still live, my suggestion would be to send the file to Merix Financial as they will use 100% of the reported income, prior to the commencement of the mat leave...

    A job letter is usually all that it takes, but in this case, you may want to cover your bases and also consider getting CRA confirmation of income to support previous year(s) earnings.

    Good luck with this one...
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  • LanceH 2014-04-08 11:35:42 AM
    Divorcing women are treated differently? I've done a couple of divorce mortgages, have one on my plate now and have seen no difference in treatment. Examples?

    Discriminating based on income or 'cause she's a pregnant female not yet a citizen? Banks discriminate based on income stability all the time. They do so with born n raised Cdns, including men, why would they not do so here? There's a couple lenders that will go up to 1yr of pregnancy leave using full income, so long as they have a job letter stating the position is being held. I'd Use one of those.
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