Justice Department Settles Lawsuit With MGIC

Justice Department Settles Lawsuit With MGIC The U.S. Department of Justice has settled its lawsuit against the Mortgage Guaranty Insurance Corp. (MGIC) over allegations of discrimination against women on maternity leave.

The lawsuit, filed on July 5, 2011, in the U.S. District Court for the Western District of Pennsylvania, alleged that MGIC required women on maternity leave to return to work before the company would insure their mortgages, even for women who had a guaranteed right to return to work after the leave. The Justice Department charged MGIC with violating the Fair Housing Act.

The settlement, which was approved by the court, establishes a $511,250 fund to compensate 70 individuals who have been identified as aggrieved by the alleged discriminatory treatment between 2007 and 2010. The settlement also requires MGIC to pay a $38,750 civil penalty to the federal government.

‘No company involved in lending should force a parent to give up her or his legal right to take time off from work to care for a new child in order to obtain a mortgage loan,’ says Thomas E. Perez, assistant attorney general for the Justice Department's civil rights division. ‘[This] settlement, coming at the close of Fair Housing Month, protects that important right and clearly demonstrates the department will not hesitate to take action against companies who discriminate against women and families.’


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