Case 2:11-cv-00882-RCM Document 1 Filed 07/05/11 Page 1 of 13

UNITED STATES DISTRICT COURT WESTERN DISTRICT OF PENNSYLVANIA

UNITED STATES OF AMERICA,

)

Plaintiff,

)

)

v.

)

)

MORTGAGE GUARANTY INSURANCE )

CORP., ELGINA CUNNINGHAM,

)

and KELLY KANE.

)

Defendants.

)

_____________________________________ )

Case No.

COMPLAINT The United States of America alleges:
NATURE OF THE ACTION 1. This action is brought by the United States to enforce the provisions of the Fair Housing Act, 42 U.S.C. §§ 3601-3619 (“FHA”). 2. This action is brought pursuant to 42 U.S.C. § 3612(o) on behalf of Carly Neals and her three minor children. It is also brought pursuant to the United States Attorney General’s authority under 42 U.S.C. § 3614(a) to seek redress for housing discrimination that raises an issue of general public importance.
JURISDICTION AND VENUE 3. This Court has jurisdiction over this action pursuant to 28 U.S.C. § 1345, 42 U.S.C. §§ 3612(o)(1), 3614(a). 4. Venue is appropriate pursuant to 28 U.S.C. § 1391(b) because a substantial part of the events giving rise to this action occurred in this judicial district.

-1-

Case 2:11-cv-00882-RCM Document 1 Filed 07/05/11 Page 2 of 13
PARTIES 5. Defendant Mortgage Guaranty Insurance Corporation (“MGIC”) is a Wisconsin insurance corporation with its headquarters at 250-270 E. Kilbourn Avenue, Milwaukee, Wisconsin. MGIC maintains a mortgage insurance underwriting office at 11 Campus Boulevard, Suite 110, Newtown Square, Pennsylvania. 6. The primary business activity of MGIC is to provide private mortgage insurance (“PMI”) coverage with respect to residential real-estate related loans. MGIC insures loans secured by houses located across the United States. 7. MGIC has been approved by the Federal National Mortgage Association (“Fannie Mae”) and the Federal Home Loan Mortgage Corporation (“Freddie Mac”) as eligible to write mortgage insurance policies on the home mortgage loans they purchase. Roughly two-thirds of all mortgage loans secured by single-family houses originated in the United States since 2008 have been purchased by Fannie Mae or Freddie Mac. The underwriting guidelines of both Fannie Mae and Freddie Mac require homeowners to obtain PMI policies for their loan to be eligible for purchase by Fannie Mae and Freddie Mac in almost all cases when the principal amount of the loan exceeds 80% of the home’s value. 8. Defendant Elgina Cunningham is and has been employed by MGIC as an Underwriting Production Manager for 20 years. She manages the Newtown Square office. 9. Defendant Kelly Kane is and has been employed by MGIC as a mortgage insurance underwriter for over ten years. She reports to the Newtown Square office, and she is supervised by Defendant Cunningham.
-2-

Case 2:11-cv-00882-RCM Document 1 Filed 07/05/11 Page 3 of 13
10. Defendants are subject to Federal laws prohibiting discrimination in housing- and lending-related transactions, including the FHA and the regulations promulgated it.
11. Mortgage insurance premiums are a required part of the terms of many home mortgage loans. Pursuant to the regulations promulgated pursuant to the Truth in Lending Act, 12 C.F.R. § 226.4(b)(5), the projected mortgage insurance premiums to be paid over the duration of a loan are required to be disclosed, along with the projected interest charges, to borrowers as part of a loan’s “finance charge.”
12. In determining whether to approve mortgage insurance for an individual home mortgage loan applicant, MGIC has a stated practice of “establishing and applying policies, guidelines and procedures to determine whether a borrower qualifies for a mortgage loan.” In so doing, MGIC works with the underwriters and other employees of the home mortgage loan applicant’s lender.
13. Each Defendant engages in “residential real estate-related transactions” within the meaning of the FHA, 42 U.S.C. § 3605.
FACTUAL ALLEGATIONS 14. Carly Neals is the mother of three children, the youngest of whom was born on June 21, 2010. 15. Ms. Neals applied in May 2010 with PNC Mortgage (“PNC”) to refinance the mortgage loan on the home she owns jointly with her husband in Wexford, Pennsylvania. 16. PNC determined, based on Fannie Mae’s underwriting guidelines, that Ms. Neals’ request to borrow 90% of the value of her home required private mortgage insurance.
-3-

Case 2:11-cv-00882-RCM Document 1 Filed 07/05/11 Page 4 of 13
17. The payment schedule included in the preliminary Truth in Lending Disclosure statement sent to Ms. Neals by PNC included mortgage insurance premiums in the payments terms of the loan for the first 86 months.
18. As part of her loan application, Ms. Neals documented her wage and bonus income from her full-time job for the previous two years. This documentation included pay stubs from April 29, 2010 and May 13, 2010 showing net pay of $2,148.98 in each two-week pay period.
19. After giving birth to her youngest son on June 21, 2010, Ms. Neals began a period of fully paid maternity leave from her job.
20. A July 20, 2010 article “Need a Mortgage? Don’t Get Pregnant”, appearing on the front page of the New York Times’ business section, described the problems that mothers on maternity leave were having in being approved for home mortgage loans.
21. On July 21, 2010, Vice President Biden and Secretary of Housing and Urban Development Shaun Donovan issued statements drawing attention to unfair lending practices related to mothers on maternity leave. Additionally, the United States Department of Housing and Urban Development issued a press release reminding entities involved in housing finance that they could not treat applicants on maternity leave in a way that discriminates on the basis of sex or familial status and could face investigation if they did so.
22. PNC decided in early July 2010 to approve Ms. Neals’ mortgage loan application conditioned on its approval by a private mortgage insurer.
23. MGIC received a request to insure Ms. Neals’ mortgage loan on July 12, 2010. MGIC routed the request to its Newtown Square office, which handles loans secured by property in the Northeastern United States. MGIC assigned Defendant Kane to underwrite the insurance
-4-

Case 2:11-cv-00882-RCM Document 1 Filed 07/05/11 Page 5 of 13
on Ms. Neals’ loan. Defendant Kane discussed Ms. Neals’ mortgage loan with her supervisor Defendant Cunningham on several occasions.
24. As part of the insurance underwriting process, Defendant Kane requested updated bank records for Ms. Neals. Because her employer’s method of depositing maternity leave income differed from its deposit method for regular wage income, those bank records disclosed the fact that Ms. Neals was on maternity leave.
25. When Ms. Neals submitted the bank records on July 25, she explained that they substantiated that her maternity leave income matched her regular pre-leave wages. The statement disclosed that her employer deposited a maternity leave payment of $2,363.75 on July 23 in lieu of her bi-weekly July 22 wage deposit.
26. Upon reviewing the bank records and maternity leave explanation on the morning of July 26, Defendant Kane called the PNC underwriter assigned to Ms. Neals’ loan to explain that MGIC would not issue a mortgage insurance policy while she was on maternity leave.
27. At 11:09 a.m. that morning, Defendant Kane added the following note to the underwriting record for Ms. Neals’ loan in MGIC’s computer system:
[R]ec[eive]d updated bank statements along with email from Borrower that states she is on maternity leave. L[eft ]V[oice ]M[ail] for [PNC underwriter] Judy Abbs notifying her that we canno[t] proceed until Borrower is back to work full time. 28. MGIC also issued a “Request for Additional Information” letter to PNC at 11:06 a.m. on July 26, with regard to the application for Ms. Neals, stating that “[t]he underwriting of this mortgage application cannot be completed until the information specified below is received”: Provide most recent 30 day paystub with YTD earnings to support $7933.00 for CARLY F NEALS . Verify Borrower is back to work full time
-5-

Case 2:11-cv-00882-RCM Document 1 Filed 07/05/11 Page 6 of 13
29. Upon receiving the voicemail from Defendant Kane and the letter from MGIC, PNC underwriter Judy Abbs told her colleagues that MGIC was requiring that Ms. Neals “has to be back to work in order to close” the loan. Accordingly, to satisfy MGIC’s requirement, Ms. Abbs added returning to work as a condition of the loan on July 26.
30. PNC informed Ms. Neals of MGIC’s requirement that she return to work. 31. Ms. Neals officially ended her maternity leave status on August 1, and went onto fully paid parental leave on August 2 and then fully paid vacation leave on August 9. 32. On August 2, PNC requested that Ms. Neals’ workplace supervisor provide a letter that she was back to work and an active employee to satisfy MGIC’s requirement. Her supervisor provided a letter that same day stating that “Carly is an active full time employee of mine.” 33. On August 9, PNC emailed Ms. Neals’ supervisor that “the Mortgage insurance company that was requiring the letter saying Carly was back to work is now stating that the fact that she is an active, full time employee of your[s] is not enough. They want something that says directly that Carly is back from her Maternity Leave as of 8/2.” Her supervisor provided a letter on August 10 stating “Carly Neals has returned to work and is now on vacation.” 34. On August 13, Ms. Neals contacted regional managers for PNC to escalate her complaints about being required to return from maternity leave. Her email plainly stated that “I did not want to spend my time with my newborn dealing with a refinance” but that she had “spent the last three months including my time at home with my baby, catering to the ongoing requests from PNC and the MI company.”
-6-

Case 2:11-cv-00882-RCM Document 1 Filed 07/05/11 Page 7 of 13
35. PNC underwriting supervisor Carol Zipp, in turn, escalated the matter at MGIC. She first contacted MGIC Senior Account Manager Harry Leonard. Mr. Leonard told Ms. Zipp that it would be an exception to approve insurance for Ms. Neals because MGIC’s policy was that the borrower had to be back to work and have a paystub before approval could be granted. Accordingly, a PNC executive sent an August 16 email to Ms. Neals stating that a MGIC representative had “told our Underwriting Manager that it is MGIC’s policy that borrower[] must be back to work and receive a paystub with full pay prior to closing.”
36. Ms. Zipp also contacted Defendant Cunningham in her effort to escalate Ms. Neals’ complaint at MGIC. When Ms. Zipp explained to Defendant Cunningham that Ms. Neals was officially no longer on maternity leave, and instead taking paid vacation leave, Defendant Cunningham said MGIC would let the application go through.
37. Defendant Cunningham added a note to the underwriting record for Ms. Neals’ loan in MGIC’s computer system at 5:31 p.m. on August 19 documenting that “the borrower has returned to work from maternity and is currently using vacation time,” and that it was “OK to proceed.”
38. MGIC then agreed to insure Ms. Neals’ loan, and issued a commitment certificate on August 20, 2010. Nevertheless, Ms. Neals decided not to close her loan with PNC.
39. Prior to September 29, 2010, MGIC did not have a written policy specifically addressing borrowers receiving maternity leave income at the time it underwrote insurance for Ms. Neals’ loan.
-7-

Case 2:11-cv-00882-RCM Document 1 Filed 07/05/11 Page 8 of 13
40. In the absence of a written policy on underwriting borrowers with maternity leave income, Defendants required home mortgage applicants on paid maternity leave to return to work before approving mortgage insurance related to a mortgage lending transaction.
41. Prior to September 29, 2010, MGIC underwrote multiple borrowers in addition to Ms. Neals who relied on maternity leave income at the time they applied for their loans.
42. MGIC amended its written underwriting guidelines on September 29, 2010, after receiving notice that Ms. Neals had filed a complaint with the United States Department of Housing and Urban Development, to specify that “[i]ncome from short-term disability or maternity/paternity leave may be used to qualify” if the borrower submits “[w]ritten verification to indicate the amount of income received (or to be received) during the leave, [t]he expected date range of the leave, and [w]ritten verification from the borrower indicating the borrower’s intent to return to work following the leave.”
HUD ADMINISTRATIVE PROCESS 43. Ms. Neals, on behalf of herself and her three minor children, timely filed a complaint of discrimination with the United States Department of Housing and Urban Development pursuant to 42 U.S.C. § 3610(a). 44. Pursuant to 42 U.S.C. § 3610(a), (b), the Secretary of the United States Department of Housing and Urban Development conducted and completed an investigation of the complaints, attempted conciliation without success, and prepared a final investigative report. Based upon the information gathered in the investigation, the Secretary, pursuant to 42 U.S.C. § 3610(g)(1), determined that reasonable cause existed to believe that illegal discriminatory housing practices had occurred. Therefore, on May 31, 2011, the Secretary issued a Charge of
-8-

Case 2:11-cv-00882-RCM Document 1 Filed 07/05/11 Page 9 of 13
Discrimination, pursuant to 42 U.S.C. § 3610(g)(2)(A), against Defendants MGIC, Cunningham, and Kane.
45. On June 2, 2011, Ms. Neals elected to have the claims asserted in the Charge of Discrimination resolved in a civil action pursuant to 42 U.S.C. § 3612(a).
46. On June 2, 2011, an Administrative Law Judge issued a Notice of Election to Proceed in United States Federal District Court and terminated the administrative proceeding on Ms. Neals’ complaint.
47. Following this Notice of Election, the Secretary of the United States Department of Housing and Urban Development authorized the Attorney General to commence a civil action, pursuant to 42 U.S.C. § 3612(o).
FIRST CLAIM FOR RELIEF 48. By the actions referred to in the foregoing paragraphs, Defendants MGIC, Cunningham, and Kane have:
a. Discriminated in the terms, conditions, or privileges of the provision of services in connection with sale of a dwelling, because of sex and familial status, in violation of the Fair Housing Act, 42 U.S.C. § 3604(b); and
b. Discriminated in making available, or in the terms or conditions of, a residential real estate-related transaction, because of sex and familial status, in violation of the Fair Housing Act, 42 U.S.C. § 3605(a).
49. Ms. Neals, and her three minor children, have suffered and continue to suffer damages as a result of Defendants’ discriminatory conduct. Each is an “aggrieved person” pursuant to 42 U.S.C. § 3602(i).
-9-

Case 2:11-cv-00882-RCM Document 1 Filed 07/05/11 Page 10 of 13
50. The discriminatory actions of Defendants were intentional, willful, and taken in disregard of the federally protected rights of Ms. Neals and her three minor children.
SECOND CLAIM FOR RELIEF 51. The actions of Defendants MGIC, Cunningham, and Kane, as alleged herein, constitute:
a. Discrimination on the basis of sex and familial status in the terms, conditions, or privileges of the provision of services in connection with sale of a dwelling, in violation of the Fair Housing Act, 42 U.S.C. § 3604(b); and
b. Discrimination on the basis of sex and familial status in making available, or in the terms or conditions of, residential real estate-related transactions, in violation of the Fair Housing Act, 42 U.S.C. § 3605(a). 52. The actions of Defendants MGIC, Cunningham, and Kane, as alleged herein, constitute a denial of rights granted by the Fair Housing Act, 42 U.S.C. §§ 3601-3619, to a group of persons that raises an issue of general public importance, in violation of 42 U.S.C. § 3614(a). 53. In addition to Carly Neals and her three minor children, other persons may have been injured by Defendants’ discriminatory actions as described above. Such individuals are also “aggrieved persons” under the Fair Housing Act, 42 U.S.C. § 3602(i) and have suffered injury and damages as a result of Defendants’ violation of the FHA. 54. The discriminatory actions of Defendants were intentional, willful, and taken in disregard of the federally protected rights of others.
-10-

Case 2:11-cv-00882-RCM Document 1 Filed 07/05/11 Page 11 of 13
WHEREFORE, the United States prays that the Court enter an ORDER that: 1. Declares that the actions of Defendants, as alleged herein, violate the Fair Housing Act, 42 U.S.C. §§ 3601-3619; 2. Declares that Defendants have denied rights guaranteed under the Fair Housing Act to a group of persons, which denial raises an issue of general public importance; 3. Enjoins the Defendant, its agents, employees, and successors, and all other persons in active concert or participation with it, from:
a. Discriminating on the basis of sex or familial status in the in the terms, conditions, or privileges of the provision of services in connection with the sale of dwellings;
b. Discriminating on the basis of sex or familial status against any person in making available, or in the terms or conditions of, a residential real estate-related transaction;
c. Failing or refusing to take such affirmative steps as may be necessary to restore, as nearly as practicable, the victims of Defendants’ unlawful conduct to the position they would have been in but for the discriminatory conduct; and
d. Failing or refusing to take such actions as may be necessary to prevent the recurrence of any such discriminatory conduct in the future and to eliminate, to the extent practicable, the effects of Defendants’ unlawful conduct, and providing policies and procedures to ensure all applicants for residential-real estate related loans are served without regard to prohibited characteristics.
-11-

Case 2:11-cv-00882-RCM Document 1 Filed 07/05/11 Page 12 of 13 4. Awards compensatory and punitive damages, pursuant to 42 U.S.C. §§ 3612(o)(3), 3613(c)(1), 3614(d)(1)(B) to all the victims harmed by Defendants’ discriminatory actions; and 5. Assesses a civil penalty against Defendants in an amount authorized by 42 U.S.C. § 3614(d)(1)(C), in order to vindicate the public interest.
-12-

Case 2:11-cv-00882-RCM Document 1 Filed 07/05/11 Page 13 of 13

 
 Case 2:11-cv-00882-RCM Document 22 Filed 04/30/12 Page 1 of 26

IN THE UNITED STATES DISTRICT COURT 
 FOR THE WESTERN DISTRICT OF PENNSYLVANIA 


UNITED STATES OF AMERICA,

) 


)

Plaintiff,

)

)

v.

)

)

MORTGAGE GUARANTY INSURANCE )

CORP., et al.

)

)

Defendants.

)

CIVIL ACTION NO. 11-882 MAGISTRA TE JUDGE MITCHELL (Electronic Filing)

CONSENT ORDER I. INTRODUCTION This Consent Order (Order) is submitted jointly by the parties for the approval of and entry by the Court. The Order resolves the claims of the United States that Defendants have engaged in a violation of the Fair Housing Act (FHA), 42 U.S.C. §§ 3601-3619, by discriminating on the basis of sex and familial status in underwriting mortgage insurance. Specifically, the Order resolves the claims ofthe United States brought pursuant to 42 U.S.C. § 3612(0) on behalf of Carly Neals and her three minor children, and brought pursuant to the United States Attorney General's authority under 42 U.S.C. § 3614(a) to seek redress for housing discrimination that raises an issue of general public importance. There has been no factual finding or adjudication with respect to any matter alleged by the United States. The parties have entered into the Order to avoid the risks, expense, and burdens of litigation and to resolve voluntarily the claims in the Complaint of the Defendants' alleged violations of federal fair housing laws.

Case 2:11-cv-00882-RCM Document 22 Filed 04/30/12 Page 2 of 26
II. BACKGROUND 

Defendant Mortgage Ouaranty Insurance Corporation ("MOIC") is the nation's largest provider of private mortgage insurance coverage with $172.9 billion primary insurance in force covering nearly 1.1 million mortgages as of December 31,20 II. MOIC insures loans secured by houses located across the United States against losses caused by borrower defaults. Mortgage insurance is a required part of the terms of many home mortgage loans for which the borrower has less than 20% equity at the time of origination. In determining whether to approve mortgage insurance for an individual home mortgage Joan applicant, MOIC's underwriters review whether the borrower will have sufficient income to afford the loan's monthly payments.
In July 20 I0, MOIC received an application to insure a mortgage loan sought by Carly Neals. At that time, Ms. Neals was on paid maternity leave from her employer with plans to return to her pre-leave position. The United States' Complaint alleges that MOIC determined that it would not proceed on the application until Ms. Neals had returned to work full time. As a result of her treatment, Ms. Neals filed a complaint of discrimination with the United States Department of Housing and Urban Development ("HUD"), which conducted an investigation and determined that reasonable cause existed to believe that illegal discriminatory housing practices had occurred. Additionally, the Attorney Oeneral determined the alleged housing discrimination at issue raises an issue of general public importance. Prior to the entry of the Order, MOIC adopted policies on nondiscriminatory treatment of mortgage loan applicants taking leave from work related to childbirth, and MOIC cooperated in good faith with the United States to resolve this litigation.
The United States through this settlement is obtaining monetary damages for Ms. Neals and dozens of other mortgage applicants it identified as aggrieved by similar alleged
-2­

Case 2:11-cv-00882-RCM Document 22 Filed 04/30/12 Page 3 of 26
discriminatory conduct by MGIC between July 2007 and September 2010. It is also obtaining agreement from MGIC to further strengthen its policies to ensure that borrowers on maternity and paternity leave are treated in a manner that does not discriminate on the basis of sex or familial status, consistent with the requirements of the FHA.
Defendants deny all allegations and claims of unlawful discrimination set forth in the United States' Complaint. Defendants deny any negative treatment of maternity or paternity leave in underwriting was discriminatory.
III. REMEDIAL ORDER I. Unless otherwise stated herein, the remedial provisions of the Order shall be implemented within thirty (30) days of the Effective Date of the Order and shall continue throughout its term. The Effective Date ofthe Order shall be the date on which it is approved and entered by the Court.
A. General Nondiscrimination Injunction 2. The Defendants, including all of Defendant MGIC's officers, employees, agents, assignees, successors in interest, and all those in active concert or participation with any of them, are hereby enjoined from engaging in any act or practice that unlawfully discriminates against a mortgage loan applicant l on the basis of sex or familial status in connection with a submitted or potential mortgage insurance application. This prohibition includes, but is not limited to, the adoption, performance, or implementation of any policy, practice, or act that results in unlawful discrimination against an applicant on paid or unpaid maternity or paternity leave in underwriting the loan for mortgage insurance.
I For purposes of the Order, "applicant" shall refer to any individual who is seeking to borrow money as part of the mortgage transaction, without regard to who submits the mortgage insurance application to MGIC or the presence or absence of co-applicants.
-3­

Case 2:11-cv-00882-RCM Document 22 Filed 04/30/12 Page 4 of 26
B. Mortgage Insurance Underwriting Policies and Procedures 3. In underwriting loans for mortgage insurance, MOIC shall consider any applicant on maternity or paternity leave to be currently employed if the borrower provides written confirmation of her or his intent to return to work and the agreed upon date of return as evidenced by documentation provided by the employer or a designee of the employer so long as MOIC has not received evidence or information from the applicant's employer indicating that the applicant does not have the right to return to work after the leave period? 4. For any applicant on maternity or paternity leave who is considered currently employed and who will be returning to work on or before the date the first payment is due on the mortgage submitted for insurance, MOIC shall treat the applicant as earning regular employment income in the amount the applicant earned prior to the maternity or paternity leave so long as MOIC has not received evidence or information from the applicant's employer, as part of the documentation obtained pursuant to the preceding Paragraph, indicating that the applicant will earn a different amount after the leave period. 5. For any applicant on maternity or paternity leave who is considered currently employed and who will not be returning to work on or before the date the first payment is due on the mortgage submitted for insurance, MOIC shall treat the applicant as earning the lesser of a) the regular employment income the applicant earned prior to the maternity or paternity leave; or b) the temporary leave income the applicant is earning while on the maternity or paternity leave
2 Provided that the employer does not indicate that the job will not exist or will not be available after the stated return date, MOIC shall treat the requirements of this sentence to be fully satisfied by any applicant who provides confirmation that she or he has been granted leave pursuant to the Family and Medical Leave Act (FMLA), 29 U.S.C. § 2601 et seq., because of the birth of a child or the placement of a child with the employee for adoption or foster care, and confirms her or his intent to return to work no later than the first work day after the end of the leave period provided by the FMLA.
-4­

Case 2:11-cv-00882-RCM Document 22 Filed 04/30/12 Page 5 of 26
plus supplemental income in the amount of the applicant's available liquid reserves (the applicant's verified liquid assets minus any funds needed to close on the mortgage) divided by the number of months between the first mortgage payment due date and the return to work.
6. MOIC shall consider whether an applicant's employment or employment income is stable, predictable, or likely to continue without regard to the fact that an applicant previously took paid or unpaid maternity or paternity leave and returned to work with her or his pre.leave employer.
7. IfMOIC receives evidence that an applicant is currently receiving stable employment income, MOIC shall not inquire if the applicant is presently on, or was previously on, maternity or paternity leave.
8. MOIC shall not inquire if an applicant plans to take maternity or paternity leave in the future if the applicant is not on maternity or paternity leave at the time of underwriting.
9. MOIC shall not inquire if any applicant or member of her or his household is pregnant, plans to become pregnant, plans to adopt a child, or plans to become a foster parent. MOIC shall consider whether a currently employed applicant's employment income is stable, predictable, or likely to continue without regard to the applicant's plans to become a parent or statistical likelihood of becoming a parent.
10. For applications received after the Effective Date of the Order, MOIC shall immediately re-underwrite any application it becomes aware was not treated in compliance with the requirements established in Paragraphs 3-9, and it shall immediately inform the party that submitted the application of any change in underwriting results.
11. MOIC shall include the policies it adopts to implement the requirements established in Paragraph 3·9 as part of providing written copies of its income underwriting
-5­

Case 2:11-cv-00882-RCM Document 22 Filed 04/30/12 Page 6 of 26
policies to lenders, mortgage brokers, or other parties from which it accepts mortgage insurance applications (including, but not limited to, as part of its Underwriting Ouide). MOIC shall not encourage any lender, mortgage broker, or other non-related party from which it accepts mortgage insurance applications to treat an applicant on maternity or paternity leave inconsistent with the provisions of Paragraphs 3-9.
12. IfMOIC becomes aware that a party from which it accepts applications has decreased an applicant's income, or failed to include a co-applicant, because of the applicant's, or potential co-applicant's, maternity or paternity leave status, and it is unable to approve the application based on income considerations, MOIC shall seek to obtain information about the applicant's, or potential co-applicant's, employment income. IfMOIC receives that information, MOIC shall immediately re-underwrite the application considering the additional documented employment income. Nothing in this Paragraph, however, shall affect the right of a married individual to apply for or obtain a mortgage loan solely in his or her own name.
13. MOIC shall prohibit all its officers, employees, agents, assignees, successors in interest, and all those in active concert or participation with any of them from violating the requirements established in Paragraphs 3-12.
C. Monitoring Program 14. Within 30 days of the Effective Date of the Order, MOIC shall implement a monitoring program designed to ensure compliance with the Order. The program shall be designed to monitor its underwriting activities for compliance with the requirements established in Paragraph 3-12 and for detection of any discrimination toward applicants related to maternity or paternity leave or becoming a parent for insurance applications received 30 or more days after the Effective Date of the Order.
-6­

Case 2:11-cv-00882-RCM Document 22 Filed 04/30/12 Page 7 of 26
15. As part of the monitoring program required by the preceding Paragraph, for any insurance application that results in MGIC obtaining information concerning present, past, or future maternity or paternity leave by an applicant or potential co-applicant (hereafter a "Maternity Application"), MGIC shall require an appropriate underwriting manager to re­ underwrite the application to ensure compliance with the requirements established in Paragraph 3-12 and the absence of any unlawful discrimination against applicants related to maternity or paternity leave or becoming a parent. If upon completion of the original underwriting of a Maternity Application, the application is not approved, the required re-underwriting shall occur within 2 business days ofthe original underwriting. MGIC shall not deny a Maternity Application subject to re-underwriting, or seek further information regarding maternity or paternity leave in connection with a Maternity Application, before conducting the required re­ underwriting and correcting any errors found in the original underwriting. If upon completion of the original underwriting of a Maternity Application, the application is approved, MGIC shall not delay communicating the approval and it shall conduct the required re-underwriting within 10 days of the original underwriting. MGIC shall record each failure to comply, or instance of discrimination, found during the re-underwriting. MGIC shall inform the original underwriter of the error and provide training on how to avoid such errors in the future.
16. MGIC shall conduct the re-underwriting provided by the preceding Paragraph for a minimum of one year. If the re-underwriting finds no more than one error during each of the final two months of that one-year period, MGIC may suspend the re-underwriting after one year. If the re-underwriting finds more than one error during each of the final two months of that one­ year period, MGIC shall continue the re-underwriting until it finds no more than one error per month during a two month period.
-7­

Case 2:11-cv-00882-RCM Document 22 Filed 04/30/12 Page 8 of 26
17. After MOIC's re-underwriting obligations are suspended pursuant to the preceding Paragraph, MOIC shall track Maternity Applications in a manner that permits their easy retrieval so that underwriting audits of such applications can occur.3 Once MOIC's reunderwriting obligations are suspended, MOIC will be required to have an appropriate underwriting manager audit, on a quarterly basis, no less than 20% of applications received in the applicable quarter that result in MOIC obtaining information concerning present, past, or future maternity or paternity leave by an applicant or potential co-app1icant, to ensure compliance with the requirements established in Paragraph 3-12 and the absence of any discrimination against applicants related to maternity or paternity leave or becoming a parent. For each failure to comply, or instance of discrimination, found during the audit, MOIC shall immediately re-underwrite the application, and it shall immediately inform the party that submitted the application of any change in underwriting results. If any audit finds greater than a 5% error rate, MOIC must recommence the re-underwriting provided by Paragraph 15 until it finds no more than one error per month during a two month period.
18. A report on the results of the monitoring program required by Paragraph 14 for the preceding 3 months shall be presented to MOIC's senior managers and Board of Directors for review. If a Board Meeting is scheduled 45 or more days after the end of the quarter, the presentation regarding the prior 3 months results shall be made at that Board Meeting. If a Board Meeting is to occur less than 45 days after the end of the quarter, then MOIC may defer the presentation of the prior 3 months results to the next regularly scheduled Board Meeting.
3 Should tracking not prove feasible or in the event of a problem, the parties agree that MOIC may identify Maternity Applications by performing electronic searches of its underwriting notes and Boomerang databases for use of the following terms: "maternity"; "paternity"; "parental"; "return to work"; "back to work"; "pregnant"; "pregnancy"; "baby"; "short term disability"; "paid leave"; and "unpaid leave."
-8­

Case 2:11-cv-00882-RCM Document 22 Filed 04/30/12 Page 9 of 26
19. The results of the monitoring program required by Paragraph 14, including the results of the re-underwriting and audits, and the reports reviewed by MGIC's senior managers and Board of Directors pursuant to the previous Paragraph, shall be presented to the United States as part ofthe reports required by Paragraph 38. If the United States raises any objections to MGIC's determinations or remedial actions, MGIC and the United States shall meet and confer to consider appropriate steps to address the objections. If the parties are unable to come to an agreement regarding such objections, any party may bring the dispute to this Court for resolution.
D. Notification to United States and Right to Object 20. MGIC shall provide a copy of the policies it utilizes to implement Paragraphs 3­ 13 of the Order and descriptions of the monitoring program required under Paragraph 14 to the United States within 30 days ofthe Effective Date of the Order.4 The United States shall have 30 days from receipt of the policies and descriptions to raise any objections to them, and if it raises any, the parties shall confer to resolve their differences. In the event they are unable to do so, any party may bring the dispute to this Court for resolution. E. Notices of Nondiscrimination 21. Within 30 days of the Effective Date of the Order, MGIC shall include a notice of nondiscrimination, substantially similar to the sample notice attached as Appendix A to the Order, as part of providing written copies of its income underwriting policies to lenders,
4 All material required by the Order to be sent to counsel for the United States shall be sent by commercial overnight delivery service addressed as follows: Chief, Housing and Civil Enforcement Section, Civil Rights Division, U.S. Department of Justice, 1800 G Street NW, Suite 7002, Washington, DC 20006, Attn: DJ 175-64-186. The parties may also agree to delivery electronically.
-9­

Case 2:11-cv-00882-RCM Document 22 Filed 04/30/12 Page 10 of 26
mortgage brokers, or other parties from which it accepts mortgage insurance applications (including, but not limited to, as part of its Underwriting Guide).
22. Within 30 days of the Effective Date of the Order, MGle shall include a notice of nondiscrimination, substantially similar to the sample notice attached as Appendix A to the Order, in any written "Request for Additional Infonnation" (also known as a "Suspense Notice"), "Statement of Denial of Application for Mortgage Guaranty Insurance", or "Adverse Action" notice it sends to applicants, lender, mortgage brokers, or other parties from which it accepts mortgage insurance applications.
F. Fair Lending Training Program 23. Within 120 days of the Effective Date of the Order, MGle shall provide fair lending training to its management officials and employees who participate in underwriting mortgage insurance. During this training, MGle shall provide to each participant: (a) access to a copy of the Order and the policies adopted pursuant to it; and (b) training on the terms of the Order, the policies adopted pursuant to it, the requirements of the FHA, and his or her responsibilities under each. For the duration of the Order, MGle shall provide annual fair lending training to covered management officials and employees with respect to his or her responsibilities and obligations under the FHA and the Order. The training may be conducted by television or computer, so long as it allows viewers to interact in real time with the individual conducting the training (such as through a videoconference or a webinar). The content of the training program required by this Paragraph shall be approved in advance by the United States. Any expenses associated with this training program shall be borne by MGle. 24. MGle shall secure from each management official or employee specified in the preceding Paragraph a signed statement acknowledging that he or she has received access to a
-10­

Case 2:11-cv-00882-RCM Document 22 Filed 04/30/12 Page 11 of 26
copy of the Order and the underwriting policies and has completed the initial fair lending training. These statements shall be substantially in the form of Appendix B (Employee Acknowledgment) and Appendix C (Employee Training Certification). During the term of the Order, each new management official or employee whose responsibilities include those set forth in the preceding Paragraph shall be provided access to a copy of the Order and given an opportunity to have any questions answered, and shall sign the acknowledgment form statement (Appendix B) within 10 days of beginning his or her employment in that position. MOIC shall retain the statements required by this Paragraph for the duration of the Order, and make them available to the United States upon request.
G. Damages for Aggrieved Persons 25. MOIC shall deposit in an interest-bearing escrow account the total sum of $511,250 to compensate for monetary damages aggrieved persons nationwide may have suffered as a result ofthe alleged violations of the FHA (the "Settlement Fund"). Title to this account shall specify that it is "for the benefit of aggrieved persons pursuant to Order of the Court in United States v. MGIC, et al." MOIC shall provide written verification of the deposit to the United States within five days of the Effective Date of the Order. Any interest that accrues shall become part of the Settlement Fund and be utilized and disposed of as set forth herein. 26. MOIC shall pay $7,500 in monetary damages to each aggrieved person whom the United States has identified as suffering from discriminatory conduct related to a requirement to return to work based on its review ofMOIC's underwriting records and $3,750 in monetary damages to each aggrieved person whom the United States has identified as suffering from discriminatory conduct related to underwriting of employment income after returning from leave based on its review ofMGIC's underwriting records. In addition, MGIC shall pay the HUD complainant, Ms. Neals, an additional $25,000 for pain and suffering incurred as a result of
-11­

Case 2:11-cv-00882-RCM Document 22 Filed 04/30/12 Page 12 of 26
aggravating a pre-existing, medically-documented condition and an additional $10,000 for her documented loss of vacation and leave time in order to return to work under her belief that this is what MOIC required in order to approve her lender's insurance application. The names, and the final four digits of MOIC's identification number for the loan associated with each aggrieved person, is contained in Appendix D to the Order.
27. The total amount paid by MOlC collectively to the aggrieved persons shall not exceed the amount of the Settlement Fund, including accrued interest.
28. No aggrieved person shall be paid any amount from the Settlement Fund until he or she has executed and delivered to MOlC a written release as set forth in Appendix E.
29. Unless there is an appeal from or challenge to the Order, neither of which is expected, MOlC shall, no later than 35 days after entry of the Order, notify each aggrieved person eligible for compensation by a letter (using reasonable methods to locate each person). The form of this letter shall be subject to the review and approval of the United States. At a minimum, the letter shall state that the aggrieved person is eligible for the prescribed payment. It shall also explain the requirement, in order to receive the prescribed payment, to execute a release that preserves the right to obtain any additional relief they may be entitled to through any claims process in the class action case in the U.S. District Court for the Western District of Pennsylvania Carly F. Neals v. Mortgage Ouaranty Insurance Corporation, No. 2:1O-cv-01291­ DSC-RCM (W.D. Pa.) (hereafter the "Neals Class Action"). The letter shall enclose a release form and an addressed and postage-paid return envelope. Each letter shall identify the loan MOIC underwrote related to the aggrieved person. The letter shall also include a statement that the aggrieved person will separately be sent notice regarding their rights to pursue any additional relief that may be provided by the Neals Class Action. If the parties are unable to agree on the
-12­

Case 2:11-cv-00882-RCM Document 22 Filed 04/30/12 Page 13 of 26
tenns of the letter, any party may bring the dispute to the Court for resolution. Any letters that are returned with a forwarding address shall promptly be re-sent to that new address. MOIC shall provide the United States with an accounting of these notifications, indicating the name and address to which each was dispatched, within the 30-day period referred to in this Paragraph.
30. MOIC shall require the return of releases from aggrieved persons within 6 months from the date the initial notifications are sent. MOIC shall provide, as part ofthe reporting required in Paragraph 38, an accounting of responses received and notifications for which no response has been received or that were reported to be undeliverable. The United States may make its own efforts to locate aggrieved persons.
31. MOIC shall issue checks no later than 21 days after the receipt of an executed release. MOIC shall provide, as part of the reporting required in Paragraph 38, an accounting of checks issued.
32. Any money not distributed from the Settlement Fund, including accrued interest, within 3 months after the deadline for the return of releases, shall be distributed to qualified organization(s) that conduct fair housing enforcement, fair lending enforcement, or educational activities addressing sex or familial status discrimination. MOIC will consult with and obtain the non-objection of the United States in selecting recipient(s) of these funds and the amount to be distributed to each, and the parties shall obtain the Court's approval prior to distribution of any such funds. MOIC shall require each recipient to submit to MOIC and the United States a detailed report on how funds are utilized within one year after the funds are distributed.
33. MOIC shall not be entitled a set-off, or any other reduction, of the amount of payments to an aggrieved person because of any debts owed by an aggrieved person. MOIC also
-13­

Case 2:11-cv-00882-RCM Document 22 Filed 04/30/12 Page 14 of 26
shall not refuse to make a payment based on a release of legal claims previously signed by any aggrieved person.
G. Civil Penalty 34. Within 5 days of entry of the Order, MOIC shall pay the sum of$38,750 to the United States as a civil penalty to vindicate the public interest, pursuant to 42 U.S.C. § 3614(d)(l)(C). This payment shall be delivered to counsel for the United States in the form of a cashier's check payable to "United States Treasury." H. Complaint Resolution Program 35. During the duration of the Order, MOIC shall maintain a complaint resolution program to address complaints alleging discrimination on a basis prohibited by the FHA in its mortgage insurance underwriting. Documentation regarding such complaint resolution program, including documentation of individual complaints and resolutions, if any, shaH be included in the semi-annual reports referenced in Paragraph 38. There is no requirement under the Order that any complaint necessarily be resolved for or against MOIC.
IV. EVALUATING AND MONITORING COMPLIANCE 36. For the duration of the Order, MOIC shaH retain all records relating to its obligations hereunder as well as their compliance activities as set forth herein. The United States shall have the right to review and copy such records upon request, including files and electronic data for mortgage insurance applications underwritten during the duration of the Order. 37. MOIC shall provide to the United States the data on its activities that it submits to the Mortgage Insurance Companies of America ("MICA"), or MICA's designee, to satisfy the mortgage guaranty insurance industry's commitment to voluntarily submit HMDA data to the Federal Financial Institutions Examination Council. The data, including the record layout, will
-14­

Case 2:11-cv-00882-RCM Document 22 Filed 04/30/12 Page 15 of 26
be provided in the same format in which it is presented to MICA, or its designee, within 30 days of its submission each year, for the duration of the Order.
38. In addition to the submission of any other plans or reports specified in the Order, MGIC shall submit semi-annual reports to the United States on its progress in completing the requirements of the Order. Each such report shall provide a complete account of MGIC's actions to comply with each requirement ofthe Order during the previous 6 months, an objective assessment of the extent to which each obligation was met, an explanation of why any particular obligation was not met for the previous 6 months, and any recommendations for additional actions to achieve the obligations of the Order. MGIC shall submit its first report no later than 6 months after the Effective Date of the Order, and every 6 months thereafter for so long as the Order is in effect. In addition, if applicable, MGIC shall attach to the semi-annual reports representative copies of training materials disseminated pursuant to the Order.
v. ADMINISTRATION
39. The Order shall terminate 3 months after the submission of MGIC's eighth semi­ annual report due under Paragraph 38 to the United States. Notwithstanding the above, the Order may be extended further upon motion of the United States to the Court, for good cause shown.
40. The details in administration of the Settlement Fund set forth in Paragraphs 29-31 can be modified by written agreement ofthe parties and without further Court approval. Any time limits for performance fixed by the Order may be extended by written agreement of the parties. Other modifications to the Order may be made only upon approval of the Court, upon motion by any party.
-15­

Case 2:11-cv-00882-RCM Document 22 Filed 04/30/12 Page 16 of 26
41. The Order shall be binding on Defendants, including all their officers, employees, agents, representatives, assignees, and successors in interest, and all those in active concert or participation with any of them. The Order shall consider employees ofjoint ventures operated by Defendant MGIC, and the loans they underwrite, to be employees of Defendant MGIC and to be loans underwritten by employees of Defendant MGIC. The Order also shall consider loans to be underwritten by employees of Defendant MGIC even when underwriting functions are completed by contractors. In the event Defendant MGIC seeks to transfer or assign all or part of its operations, and the successor or assign intends on carrying on the same or similar use, as a condition of sale, Defendant MGIC shall obtain the written accession of the successor or assign to any obligations remaining under the Order for its remaining term.
42. Nothing in the Order shall excuse Defendants' compliance with any currently or subsequently effective provision of law or order of a regulator with authority over Defendants that imposes additional obligations on Defendants.
43. The parties agree that, as of the date of entry of the Order, litigation is not "reasonably foreseeable" concerning the matters described in the Order. To the extent that any party previously implemented a litigation hold to preserve documents, electronically stored information, or things related to the matters described in the Order, the party is no longer required to maintain such a litigation hold.
44. In the event that any disputes arise about the interpretation of or compliance with the terms of the Order, the parties shall endeavor in good faith to resolve any such dispute between themselves before bringing it to this Court for resolution. If the United States believes that any Defendant has violated any provision of the Order, it will provide the Defendant written notice thereof and allow 30 days to resolve the alleged violation before presenting the matter to
-16­

Case 2:11-cv-00882-RCM Document 22 Filed 04/30/12 Page 17 of 26
this Court. In the event of either a failure by any Defendant to perform in a timely manner any act required by the Order or an act by any Defendant in violation of any provision hereof, the United States may move this Court to impose any remedy authorized by law or equity, including attorneys' fees and costs.
45. Defendants' compliance with the terms of the Order shall fully and finally resolve all FHA claims, including all claims brought under 42 U.S.C. § 3614(a), that are raised in the Complaint's allegations of discrimination on the basis of sex and familial status against individuals on maternity or paternity leave, including all claims for equitable relief and monetary damages and penalties arising from those claims, for mortgage insurance applications that Defendants underwrote between July 26, 2007 and September 30, 2010. The Order does not release any other legal claims, including claims that may be held or are currently under investigation by any federal agency. The Order does not release legal claims under the FHA for practices not addressed in the allegations of discrimination on the basis of sex and familial status contained in the Complaint, including any claims currently under investigation by federal agencies. The Order does not release any claims under any statute other than the FHA.
46. The United States and Defendants shall bear their own costs and attorneys' fees associated with this litigation.
47. The Court shall retain jurisdiction for the duration of the Order to enforce the terms of the Order, after which time the case shall be dismissed with prejudice.
SO ORDERED, thi~ ~ay of ~~2012.
~ e.~uQW UNITED STATES MAGISTRATE JUDGE
-17­

Case 2:11-cv-00882-RCM Document 22 Filed 04/30/12 Page 18 of 26

The undersigned hereby apply for and consent to the entry of the Order: For Plaintiff United States of America:

DAVID HICKTON United States Attorney

THOMAS E. PEREZ Assistant Attorney General Civil Rights Division
STEVEN H. ROSENBAUM Chief
REBECCA B. BOND Deputy Chief

lsi Christy Criswell Wiegand CHRISTY CRISWELL WIEGAND Assistant United States Attorney MA647903 U.S. Post Office & Courthouse 700 Grant Street, Suite 4000 Pittsburgh, Pennsylvania 15219 Email: Christy.Wiegand@usdoj.gov Phone: 412-894-7452 Fax: 412-644-6995
For Defendant MGIC:
lsi Bruce E. Rende BRUCE E. RENDE Robb Leonard Mulvihill LLP PA52714 BNY Mellon Center, 23rd Floor Pittsburgh, Pennsylvania 15219 Email: BRende@rlmlawfirm.com Phone: 412-281-5431 Fax: 412-281-3711

lsi Daniel P. Mosteller DANIEL P. MOSTELLER Trial Attorney NC36958 United States Department of Justice Civil Rights Division Housing and Civil Enforcement Section 950 Pennsylvania Ave., N.W. NWB Washington, D.C. 20530 Email: DanieI.Mosteller@usdoj.gov Phone: 202-514-4713 Fax: 202-514-1116
lsi Jay N. Varon JAYN. VARON Foley & Lardner LLP DC236992 3000 K Street, NW Washington, D.C. 20007 Email: JVaron@foley.com Phone: 202-672-5300 Fax: 202-672-5399

-18­

Case 2:11-cv-00882-RCM Document 22 Filed 04/30/12 Page 19 of 26

For Defendant Elgina Cunningham:
lsI Bruce E. Rende
BRUCE E. RENDE Robb Leonard Mulvihill LLP PA52714 BNY Mellon Center, 23rd Floor Pittsburgh, Pennsylvania 15219 Email: BRende@rlmlawfirm.com Phone: 412-281-5431 Fax: 412-281-3711
For Defendant Kelly Kane:
lsI Bruce E. Rende
BRUCE E. RENDE Robb Leonard Mulvihill LLP PA52714 BNY Mellon Center, 23rd Floor Pittsburgh, Pennsy Ivania 15219 Email: BRende@rlmlawfirm.com Phone: 412-281-5431 Fax: 412-281-3711

lsI Jay N. Varon
JAYN. VARON Foley & Lardner LLP DC236992 3000 K Street, NW Washington, D.C. 20007 Email: JVaron@foley.com Phone: 202-672-5300 Fax: 202-672-5399
lsI Jay N. Varon
JAYN. VARON Foley & Lardner LLP DC236992 3000 K Street, NW Washington, D.C. 20007 Email: JVaron@foley.com Phone: 202-672-5300 Fax: 202-672-5399

-19­

Case 2:11-cv-00882-RCM Document 22 Filed 04/30/12 Page 20 of 26

APPENDIX A 

We do Business in Accordance with 
 Federal Fair Lending Laws 


UNDER THE FAIR HOUSING ACT, IT IS 
 ILLEGAL TO DISCRIMINATE IN ANY 
 MORTGAGE INSURANCE TRANSACTION: 


On the basis of race, color, religion, sex, handicap,
familial status (including pregnancy), or national ori•gi•n;

IF YOU BELIEVE DISCRIMINATION HAS 

OCCURRED, YOU SHOULD SEND 

A COMPLAINT TO: 


U.S. Department of Housing and Urban Development Office of Fair Housing and Equal Opportunity 451 Seventh Street, SW Washington, DC 20410 Tel: 1-800-669-9777 Website: http://www.hud.gov/offices/fheo

OR U.S. Department of Justice Civil Rights Division Housing and Civil Enforcement Section 950 Pennsylvania Avenue, NW Washington, DC 20530 Tel: 1-800-896-7743 Website: http://www.usdoj.gov/crt/housing

-20­

Case 2:11-cv-00882-RCM Document 22 Filed 04/30/12 Page 21 of 26

APPENDIXB 
 Employee Acknowledgment

I acknowledge that on

, I was provided copies of the Consent Order

entered by the Court in United States v. Mortgage Guaranty Insurance Corp. et aI., (W.D. Pa.),

and the loan policies developed pursuant thereto. I have read and understand these documents

and have had my questions about these documents answered. I understand my legal

responsibilities and shall comply with those responsibilities.

Signature Print Name Job Title Date

-21­

Case 2:11-cv-00882-RCM Document 22 Filed 04/30/12 Page 22 of 26
APPENDIXC 
 Employee Training Certification I certify that on _ _ _ _ _ _ _ _• I received training with respect to my responsibilities under the Consent Order entered by the Court in United States v. Mortgage Guaranty Insurance Corp. et al.. (W.D. Pa.), and the federal fair lending laws. I have had the opportunity to have my questions about them answered. I understand my legal responsibilities not to discriminate under the federal fair lending laws. including the Fair Housing Act, and shall comply with those responsibilities.
Signature Print Name Job Title Date
-22­

Case 2:11-cv-00882-RCM Document 22 Filed 04/30/12 Page 23 of 26

APPENDIXD 


List of Aggrieved Persons

Aggrieved persons whom the United States has identified as suffering discriminatory conduct related to a requirement to return to work:

Name Dina M. Aldellizzi Joanna Badzio-Lain Jamie L. Barnes Bethany L. Bassett Monica Biswas Mitsy Burgardt Elizabeth A. Cipolla Kathleen J. Correll Sarah J. Crabb Jaime Dawes Jodi M. Defelice Kimberly Delaney Beatriz E. Duque Deborah Fatzynytz Monika M. Felker Amy E. Forester Kimberly L. Giancola Jill M. Glowniak Jeanie Godbey Jasmine C. Godly Natasha M. Hernandez Christopher M. Hooten Staci L. Jorgenson Jamie Karanas Robin H. Kelleher Stacey E. Kilroy Tinaanne Marie Landa Renata Lech Ivette Llopiz Angelica Martinez Allison McBrierty Amanda L. McNulty Carol A. Milliken Celeste M. Monroe Jennifer S. Montgomery Elizabeth A. Morris Carly F. Neals Rebecca L. Nix

MGIC Loan Identification Number xxxx0448 xxxx9047 xxxx0840 xxxx4743 xxxx1242 xxxx6957 xxxxl771 xxxx5277 xxxx7689 xxxx6307 xxxx4964 xxxx8199 xxxx6479 xxxx1522 xxxx8738 xxxx3155 xxxx5998 xxxx1546 xxxx7472 xxxx9244 xxxx1563 xxxxl283 xxxx2441 xxxx2343 xxxx5032 xxxx8189 xxxx8946 and xxxx3940 xxxx6947 xxxx5990 xxxx1934 xxxx4420 xxxx8950 xxxx2787 xxxx2869 xxxx6369 xxxx1298 xxxxl082 xxxx8810

-23­

Case 2:11-cv-00882-RCM Document 22 Filed 04/30/12 Page 24 of 26

Kathleen A. Novitsky Beth Ombati Nancy Plazola Rebecca Diane Pruitt Briana F. Reed Kerri C. Schweissing Cynthia L. Sitarski Ashleigh B. Smith Krysta Smith Cheryl Teichert Jeana M. Thomas Julie A. Tumey Racheal Turner Michelle T. Udasco Dena M. Valenza Margaret Vasquez Laurae Villarreal Kriste M. Ward Mary Wong-Mason

xxxx25 18 xxxx8975 xxxx2502 xxxx4697 xxxx0271 xxxx2940 xxxx3231 xxxx4897 xxxx2942 xxxx2862 xxxx3730 xxxx6065 xxxxOO78 xxxx0371 xxxx2514 xxxx6814 xxxx0232 xxxx5875 xxxx6008

Aggrieved persons whom the United States has identified as suffering from discriminatory conduct related to underwriting of employment income after returning from leave:

Name Connie M. Augustine Diana Beatriz Escutia Tara L. Gawer Katie Granville Rebecca A. Hehl Melinda Myles Erika S. Reese Linsey R. Ryckman Tammy L. Sell Mila Tempels Christi S. Vacca Nishita P. Watson Carolyn K. Youngbauer

MGIC Loan Identification Number
xxxx7163 xxxx5062 xxxxOl02 xxxx2730 xxxx9053 xxxx2970 xxxx0765 xxxxt209 xxxx6252 xxxx8927 xxxx7046 xxxx6067 xxxx7251

-24­

Case 2:11-cv-00882-RCM Document 22 Filed 04/30/12 Page 25 of 26
APPENDIXE Release
In consideration for the parties' agreement to the terms of the Consent Order entered in United States v. Mortgage Guaranty Insurance Corp. et aI., (W.O. Pa.), and the payment to me of $_____, pursuant to the Consent Order and effective upon that payment, I hereby release and forever discharge all claims, rights, remedies, and recoveries related to the facts of housing and credit discrimination on the basis of sex and familial status in the underwriting of mortgage insurance at issue in the litigation referenced above, and release and forever discharge all claims, rights, remedies, and recoveries arising from housing and credit discrimination on the basis of sex and familial status alleged in that litigation in connection with the underwriting of mortgage insurance related to my loan(s), known and unknown, up to and including the date of execution of this release. This release includes all claims made in private class action Carly F. Neals v. Mortgage Guaranty Insurance Corporation, No. 2:10-cv-OI291-0SC-RCM (W.O. Pa.) (the "Neals Class Action"), except that I am not releasing my right to attempt to receive relief that may become available to me in the Neals Class Action for any out of pocket loss of actual funds or money or benefits (other than a loan application fee or expenses incurred in the mortgage application process) or any incurred extraordinary emotional distress or significant pain and suffering necessitating contemporaneous medical attention as a proximate cause ofMGIC's discriminatory conduct.[5]
I understand that this releases those claims, rights, remedies and recoveries against Mortgage Guaranty Insurance Corporation, Elgina Cunningham, Kelly Kane, and against any
5 The exception language will not appear in Ms. Neals' release because she is receiving full compensation for these claims.
-25­

Case 2:11-cv-00882-RCM Document 22 Filed 04/30/12 Page 26 of 26 and all related entities, parents, predecessors, successors, subsidiaries, and affiliates, and against any and all of their past and present directors, officers, agents, managers, supervisors, shareholders, and employees and their heirs, executors, administrators, successors in interest, or assigns.
Executed this _ day of _ __ Signature Print Name Address
-26­

 
 CCaassee22::1111--ccvv--0000888822--RRCCMM DDooccuummeenntt2245-1 FiFleilded030/31151/41/313 PaPgaege1 1ofo3f 3

IN THE UNITED STATES DISTRICT COURT 
 FOR THE WESTERN DISTRICT OF PENNSYLVANIA 


UNITED STATES OF AMERlCA,

)

)

Plaintiff,

)

)

v.

)

)

MORTGAGE GUARANTY INSURANCE)

CORP., et aL

)

) 


Defendants.

) 


CIVIL ACTION NO. 11-882 MAGISTRATE JUDGE MITCHELL (Electronic Filing)

DISBURSEMENT ORDER 1. On April 30, 2012, this Court entered a Consent Order between Plaintiff United States and Defendants Mortgage Guaranty Insurance Corporation ("MGIC") et al. The Consent Order resolved all claims set forth in the United States' Complaint against the Defendants in this matter. 2. Paragraph 32 of the Consent Order mandates that Defendant MGIC must distribute, within three months after the deadline for the return of releases, any money remaining in the Settlement Fund to qualified organization(s) that conduct fair housing enforcement, fair lending enforcement, or educational activities addressing sex or familial status discrimination. 3. Paragraph 32 of the Consent Order also requires that Defendant MGIC consult with and obtain the non-objection of the United States in selecting the recipient(s) of these funds. The parties must also obtain the Court's approval prior to the distribution of the funds. 4. On June 1, 2012, Defendant MGIC sent notices to the 70 aggrieved persons listed in Appendix D of the Consent Order. Defendant MGIC and the United States made multiple efforts by mail, private courier, and/or telephone to contact the listed aggrieved persons who did not

CCasaese2:21:11-1c-vc-v0-00808828-2R-RCCMM DDoocucummeentnt242-51 FFilieledd0033/1/154/1/133 PPaaggee22oof f33
respond to the initial mailing. After these efforts, 66 of the 70 identified aggrieved persons returned releases by the December 1, 2012 deadline to return releases, set pursuant to Paragraph 30 of the Consent Order. 5. The parties informed the Court that $30,000.00 plus accumulated interest remained in the Settlement Fund after the payments to the aggrieved persons who returned a release. Defendant MGIC has selected two organizations to receive those funds. The United States does not object to the selection of these organizations. 6. The National Community Reinvestment Coalition will receive half of the funds remaining in the Settlement Fund. 7. The Metropolitan Milwaukee Fair Housing Council will receive half of the funds remaining in the Settlement Fund. 8. The Court hereby approves the selection of these organizations and approves the disbursement of the above-referenced funds. 9. Defendant MGIC is hereby ordered to disburse the funds required by Paragraph 32 of the Consent Order to the organizations in the amounts reflected above within 30 days of the issuance of this order. 10. Defendant MGIC must instruct each organization, as a condition of receiving the funds, that it must use the funds in a manner related to addressing sex and familial status discrimination
2 


CCaassee 22::1111--ccvv--0000888822--RRCCMM DDooccuummeenntt 2245-1 FiFleilded030/31/51/41/313 PaPgaege3 3ofo3f 3 in housing and lending and that it must submit a report to Defendant MGIC and the United States within one year after the funds are distributed detailing how it used the funds for such purposes. IT IS SO ORDERED:
This / ~dayK of 4---L..;2013.
d...z ~.~/,L/ UNITED STATES MAGISTRATE JUDGE
3 


 
 Case: 2:11-cv-882 As of: 01/31/2016 07:49 PM EST 1 of 3
CLOSED,CONMAG
U.S. District Court Western District of Pennsylvania (Pittsburgh) CIVIL DOCKET FOR CASE #: 2:11−cv−00882−RCM

UNITED STATES OF AMERICA v. MORTGAGE GUARANTY INSURANCE CORP. et al Assigned to: Magistrate Judge Robert C. Mitchell related Case: 2:10−cv−01291−RCM Cause: 42:405 Fair Housing Act
Plaintiff

Date Filed: 07/05/2011 Date Terminated: 04/30/2012 Jury Demand: None Nature of Suit: 443 Civil Rights: Accommodations Jurisdiction: U.S. Government Plaintiff

UNITED STATES OF AMERICA

represented by Christy C. Wiegand United States Attorney's Office 700 Grant Street Suite 4000 Pittsburgh, PA 15219 (412) 894−7452 Email: christy.wiegand@usdoj.gov ATTORNEY TO BE NOTICED

Daniel P. Mosteller US Department of Justice, Civil Rights Division, Housing and 950 Pennsylvania Ave. NW −− NWB Washington, DC 20530 202−305−0053 Fax: 202−514−1116 Email: daniel.mosteller@usdoj.gov ATTORNEY TO BE NOTICED

V. Defendant MORTGAGE GUARANTY INSURANCE CORP.
Defendant ELGINA CUNNINGHAM and

represented by Bruce E. Rende Robb Leonard Mulvihill LLP BNY Mellon Center 500 Grant Street, 23rd Floor Pittsburgh, PA 15219 (412) 281−5431 Fax: 412−281−3711 Email: brende@rlmlawfirm.com ATTORNEY TO BE NOTICED
Jay N. Varon Foley & Lardner LLP 3000 K Street, N.W. Washington, DC 20007 202.672.5380 Fax: 202.672.5399 Email: jvaron@foley.com PRO HAC VICE ATTORNEY TO BE NOTICED
represented by Jay N. Varon (See above for address) PRO HAC VICE ATTORNEY TO BE NOTICED

Case: 2:11-cv-882 As of: 01/31/2016 07:49 PM EST 2 of 3

Defendant KELLY KANE

represented by Jay N. Varon (See above for address) PRO HAC VICE ATTORNEY TO BE NOTICED

Date Filed 07/05/2011 07/07/2011 07/27/2011
09/02/2011 09/06/2011 09/12/2011 09/13/2011
09/13/2011 09/13/2011
09/13/2011 09/28/2011 09/29/2011 10/03/2011 10/07/2011 10/07/2011

# Docket Text
1 COMPLAINT against ELGINA CUNNINGHAM, KELLY KANE, MORTGAGE GUARANTY INSURANCE CORP., filed by UNITED STATES OF AMERICA. (Attachment: # 1 Civil Cover Sheet) (jsp) (Entered: 07/06/2011)
2 NOTICE of Appearance by Christy C. Wiegand on behalf of UNITED STATES OF AMERICA. (Wiegand, Christy) (Entered: 07/07/2011)
3 WAIVER OF SERVICE Returned Executed by UNITED STATES OF AMERICA. ELGINA CUNNINGHAM waiver sent on 7/6/2011, answer due 9/6/2011; KELLY KANE waiver sent on 7/6/2011, answer due 9/6/2011; MORTGAGE GUARANTY INSURANCE CORP. waiver sent on 7/6/2011, answer due 9/6/2011. (Mosteller, Daniel) Modified on 7/28/2011 to indicate waiver sent and answer due dates. (ept) (Entered: 07/27/2011)
4 STIPULATION For Enlargement Of Time by MORTGAGE GUARANTY INSURANCE CORP.. (Rende, Bruce) (Entered: 09/02/2011)
Update Answer Deadline: Answer due from All Defendants 9/12/2011. (mlb) (Entered: 09/06/2011)
5 ANSWER to 1 Complaint by MORTGAGE GUARANTY INSURANCE CORP.. (Rende, Bruce) (Entered: 09/12/2011)
6 INITIAL LOCAL RULE 16.1 SCHEDULING CONFERENCE: A Case Management Conference is set for 10/14/2011 at 9:30 AM before Robert C. Mitchell. Rule 26 Meeting to be conducted on or before 9/30/2011. Rule 26 Meeting Report due by 10/7/2011. Signed by Magistrate Judge Robert C. Mitchell on 9/13/2011. (mlb) (Entered: 09/13/2011)
7 CASE MANAGEMENT ORDER: Willingness to proceed before Magistrate Judge due by 9/30/2011. Signed by Magistrate Judge Robert C. Mitchell on 9/13/2011. (mlb) (Entered: 09/13/2011)
CLERK'S OFFICE QUALITY CONTROL MESSAGE re 5 Answer to Complaint. ERROR: Party did not file disclosure statement as required pursuant L.R. 7.1.1. CORRECTION: Attorney advised to file statement within 7 days. This message is for informational purposes only. Disclosure Statement due by 9/20/2011. (ksa) (Entered: 09/13/2011)
8 Disclosure Statement identifying MGIC Investment Corporation as corporate parent or other affiliate, by MORTGAGE GUARANTY INSURANCE CORP.. (Rende, Bruce) (Entered: 09/13/2011)
9 CONSENT to Trial/Jurisdiction by US Magistrate Judge by UNITED STATES OF AMERICA. (Wiegand, Christy) (Entered: 09/28/2011)
10 DISTRICT JUDGE OPTION by ELGINA CUNNINGHAM, KELLY KANE, MORTGAGE GUARANTY INSURANCE CORP. to have this case randomly assigned to a U.S. District Judge. (Rende, Bruce) (Entered: 09/29/2011)
Judge Robert C. Mitchell no longer presiding on this case. (slv) (Entered: 10/03/2011)
11 STIPULATION selecting ADR process by UNITED STATES OF AMERICA (Wiegand, Christy) (Entered: 10/07/2011)
12 PROPOSED DISCOVERY PLAN pursuant to Rule 26(f) by UNITED STATES OF AMERICA. (Wiegand, Christy) Wrong event selected. Document removed from public view and redocketed at 13 . Modified on 10/11/2011. (ept) (Entered: 10/07/2011)

Case: 2:11-cv-882 As of: 01/31/2016 07:49 PM EST 3 of 3

10/07/2011 10/11/2011
10/13/2011 10/14/2011 10/14/2011
10/14/2011
10/17/2011
01/09/2012
04/23/2012 04/30/2012
04/30/2012 04/30/2012 04/30/2012 03/14/2013 03/15/2013

13 REPORT of Rule 26(f) Planning Meeting. (ept) (Entered: 10/11/2011)
CLERK'S OFFICE QUALITY CONTROL MESSAGE re 12 Proposed Discovery Plan. ERROR: Wrong event selected. CORRECTION: Re−docketed as Report of Rule 26(f) Planning Meeting. This message is for informational purposes only. (ept) (Entered: 10/11/2011)
14 STIPULATED PROTECTIVE ORDER by MORTGAGE GUARANTY INSURANCE CORP.. (Rende, Bruce) (Entered: 10/13/2011)
15 ORDER approving 14 Stipulated Protective Order. Signed by Magistrate Judge Robert C. Mitchell on 10/14/2011. (mlb) (Entered: 10/14/2011)
16 Minute Entry for proceedings held before Magistrate Judge Robert C. Mitchell: Case Management Conference held on 10/14/2011. Rule 26 disclosures to be made by 10/21/2011. Defendants to provide results of data base search by 12/31/2011. A Status Conference is set for 1/9/2012 at 12:30 PM before Magistrate Judge Robert C. Mitchell. (Court Reporter: None) (mlb) (Entered: 10/14/2011)
17 MOTION for attorney Jay N. Varon to Appear Pro Hac Vice, (Filing fee $40, Receipt # 0315−2124876) by ELGINA CUNNINGHAM, KELLY KANE, MORTGAGE GUARANTY INSURANCE CORP.. (Attachments: # 1 Exhibit A, # 2 Proposed Order) (Rende, Bruce) (Entered: 10/14/2011)
ORDER granting 17 Motion for Jay N. Varon to Appear Pro Hac Vice. Signed by Magistrate Judge Robert C. Mitchell on 10/17/2011. Text−only entry; no PDF document will issue. This text−only entry constitutes the Order of the Court or Notice on the matter. (mlb) (Entered: 10/17/2011)
18 Minute Entry for proceedings held before Magistrate Judge Robert C. Mitchell: Status Conference held on 1/9/2012. All proceedings are stayed until 4/15/2012 so the parties can complete investigation and settlement discussions. A Status Conference is set for 4/30/2012 at 9:30 AM before Magistrate Judge Robert C. Mitchell. (Court Reporter: None) (mlb) (Entered: 01/09/2012)
19 NOTICE of Hearing: Status Conference set for 4/30/2012 at 01:30 PM before Magistrate Judge Robert C. Mitchell. (cms) (Entered: 04/23/2012)
20 Minute Entry for proceedings held before Magistrate Judge Robert C. Mitchell: Status Conference held on 4/30/2012. Parties consent to jurisdiction by U.S. Magistrate Judge. Consent Order to be entered. (Court Reporter: None) (mlb) (Entered: 04/30/2012)
21 ORDER GRANTING Consent to Proceed Before a US Magistrate Judge. Case reassigned to Magistrate Judge Robert C. Mitchell. Signed by Magistrate Judge Robert C. Mitchell on 4/30/2012. (mlb) (Entered: 04/30/2012)
22 ORDER approving parties' consent order. Signed by Magistrate Judge Robert C. Mitchell on 4/30/2012. (mlb) (Entered: 04/30/2012)
23 ORDER FOR STATISTICAL CLOSING. Signed by Magistrate Judge Robert C. Mitchell on 4/30/2012. (mlb) (Entered: 04/30/2012)
24 Joint MOTION for Disbursement of Funds by MORTGAGE GUARANTY INSURANCE CORP., UNITED STATES OF AMERICA. (Attachments: # 1 Proposed Order) (Mosteller, Daniel) (Entered: 03/14/2013)
25 ORDER granting 24 Motion for Disbursement of Funds. Signed by Magistrate Judge Robert C. Mitchell on 3/15/2013. (ajt) (Entered: 03/15/2013)

 
 Hom e » Briefing Room » Ju stice New s

Department of Justice

Office of Public A ffairs FOR IMMEDIA TE RELEASE

Tuesday , July 5, 201 1

Justice Department Sues Nation’s Largest Mortgage Insurance Provider for Discrimination Against Women
on Paid Maternity Leave
WA SHINGTON – The Justice Department announced today that it has sued the Mortgage Guaranty Insurance Corporation (MGIC), the nation’s largest mortgage insurance company , and two of its underwriters, Elgina Cunningham and Kelly Kane, for v iolating the Fair Housing Act by discriminating against women on paid maternity leav e.

The suit, filed on July 5, 201 1 , in the U.S. District Court for the Western District of Pennsy lv ania, alleges that MGIC required women on paid maternity leav e to return to work before the company would insure their mortgages. Most mortgage lenders require applicants seeking to borrow more than 80 percent of their home’s v alue to obtain mortgage insurance, meaning MGIC’s denials to women on maternity leav e could cost those women the opportunity to obtain a home loan.

“No woman should be denied the opportunity to receiv e a mortgage loan simply because she has just giv en birth,” said Thomas E. Perez, Assistant A ttorney General for the Justice Department’s Civ il Rights Div ision. “Our nation’s fair housing laws prohibit this kind of discrimination, and the Justice Department is committed to aggressiv e enforcement of those laws.”

“It defies belief that, in 201 1 , any institution would discriminate against a mother for legally and properly taking leav e after the birth of a child,” said U.S. A ttorney for the Western District of Pennsy lv ania Dav id Hickton. “My office will not stand idly by while parents suffer discrimination in lending simply for taking maternity or paternity leav e.”

This lawsuit arose as a result of a complaint filed with the U.S. Department of Housing and Urban Dev elopment (HUD) by a Wex ford, Penn., loan applicant. After inv estigating the complaint, HUD issued a charge of discrimination and referred the case to the Department of Justice after the complainant elected to hav e the case heard in federal court. The suit alleges that the defendants’

conduct constitutes discrimination based on sex and familial status, and seeks a court order prohibiting future discrimination by the defendants, monetary damages for those harmed by the defendants’ actions and a civ il penalty .

The federal Fair Housing Act prohibits discrimination in housing and mortgage lending based on race, color, religion, national origin, sex , disability and familial status. More information about the Civ il Rights Div ision and the laws it enforces is av ailable at www.usdoj.gov /crt. Indiv iduals who believ e that they may hav e been v ictims of housing or lending discrimination can call the Housing Discrimination Tip Line at 1 -800-896-7 7 43, e-mail the Justice Department at fairhousing@usdoj.gov , or contact HUD at 1 -800-669-97 7 7 .

11 -880

Civ il Rights Div ision

Printer Friendly
Report a Crime Get a Job Locate a Prison, Inmate, or Sex Offender Apply for a Grant Submit a Complaint Report Waste, Fraud, A buse or Misconduct to the Inspector General Find Sales of Seized Property Find Help and Information for Crime V ic t ims Register, A pply for Permits, or Request Re c o r ds Identify Our Most Wanted Fugitiv es Find a Form Report and Identify Missing Persons Contact Us

ABOUT The Attorney General Budget & Performance Strategic Plans
AGENCIES
BUSINESS & GRANTS
Business Opportunities Small & Disadvantaged Business Grants

RESOURCES Forms Publications Case Highlights Legislative Histories
NEWS Justice New s The Justice Blog Videos Photo Gallery

CAREERS Legal Careers Student Opportunities Diversity Policy Internships
CONTACT

Site Map A to Z Index Archive Accessibility FOIA No FEAR Act Information Quality
Privacy Policy
Legal Policies & Disclaimers

For Employees Office of the Inspector General
Government Resources
USA .gov