Couples' Mortgage Application Raises Discrimination Questions

Aug. 30, 2010— -- How much information is too much for a bank to request when you want a loan? Linda Falcao says she knows the answer to this after Wells Fargo forced her to write an essay covering personal details of her family's life before they would grant her a mortgage.

It all started when Falcao and husband Kemuel Ronis applied for a mortgage in late January. The New York Times first reported that Wells Fargo then asked them to write what the bank called a "motivational letter," disclosing, among other things, why they wanted the house, whether they planned to have more children or increase the size of the property.

The Glen Mills, Pa., couple balked.

"I thought it was invasive," said Falcao. "I felt humiliated and demeaned to have to discuss personal matters like reproduction with a stranger."

Falcao and Ronis said bank officials told them that such a letter was required whenever someone applied for a mortgage and still owned a home. But the reasons seemed to make little sense to the couple.

Falcao, an attorney who specializes in employment law, wondered whether there was something more going on and she says the answers she got from the bank didn't add up.

"I make more money than my husband," said Falcao, whose husband is a teacher. "Were they wondering what would happen to my income if I got pregnant? Is this something they do when the woman makes more than the husband?"

The Fair Housing Act makes it illegal to discriminate in the sale, including financing, of housing based on disability, sex or family status.

Sean Cahan, a mortgage banker with Residential Pacific Mortgage, agreed that the request for the letter is odd in his experience. "We've never heard of being asked to write an essay" when buying a home, he said.

Because Falcao and Ronis had sold their town house and needed to close on the new home, they believed they had little choice but to comply and write the letter.

"I called another bank and told them we were closing in seven days and asked whether there was any way we could kick Wells Fargo to the curb," said Falcao. "That bank told me that they couldn't get me a mortgage in seven days, so Wells Fargo had their foot on my back. At that point ... we were so far along that we didn't have a lot of options. We didn't want to end up homeless. We did what we had to do."