The Department of the Treasury and the Internal Revenue Service released new guidance that is “designed to expand the use of income annuities in 401(k) plans.”
Nov. 29--A two-year legal battle over a company's refusal to insure a mortgage for an attorney who was on maternity leave ended today with a judge's approval of a class action settlement that could boost the firm's payments to women to more than $1 million.
According to the settlement, Mortgage Guaranty Insurance Corp., of Milwaukee, will put $500,000 into a settlement account, to be distributed among 20 women whose maternity leaves were disrupted by the firm's refusal to insure their loans. That's in addition to $515,000 the firm had to put into a separate settlement pot to resolve a related Justice Department lawsuit.
The cases started with Carly Neals, a Pine attorney who works as a wealth adviser. Her effort to refinance her home mortgage while on maternity leave with her third child was nixed by Mortgage Guaranty, which wanted her to return to work first.
"Women work, and I work really hard," said Ms. Neals today. "And I did what tons and tons of working moms do, which is have a baby.
"I felt like I had worked so hard to orchestrate a really good maternity leave where I could spend time with my baby and have peace of mind."
She said she ended up spending her entire maternity leave scrambling to try to save the refinance effort. "There's just nothing like being at home with a newborn baby. And they just took that away from me."
After Ms. Neals complained to the Department of Housing and Urban Development and then hired attorneys Adrian Roe and Michael Simon, the Justice Department joined the effort. They identified about 80 women whose loans were denied or delayed because of Mortgage Guaranty agents' concern with their maternity status -- in violation of federal fair housing laws, according to the lawsuits.
"I wanted them to understand what was happening, and I wanted them to stop doing it," said Ms. Neals, who added that she's "cautiously optimistic" that the company is no longer considering maternity status in its mortgage insurance decisions.
The settlement with the Justice Department triggered payments to 70 women, including Ms. Neals. The class action settlement triggers payments that could range from $3,750 to $42,500 to as many as 20 women, some of whom also got payments from the Justice Department suit.
Mr. Roe and Mr. Simon, for handling the two-year legal fight, will get $337,500.
"As part of the settlement, MGIC did not admit fault," Mortgage Guaranty vice president and chief compliance officer Dan Stilwell wrote in response to questions. "However, the Company did review and clarify its underwriting guidelines to help make sure that insurance applications are processed as we always intended."
Rich Lord: firstname.lastname@example.org, 412-263-1542 or Twitter @richelord.
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