Lender rejects home loan for day-care owner
BY ROBERT J. BRUSS
Kim Sisemore, mother of a 3-year-old daughter, is licensed to operate a family day-care center for up to 14 children in her residence. She applied for a home loan from Master Financial to enable her to buy a house suitable for her day-care business.
Although Sisemore was otherwise qualified for the mortgage, Master Financial rejected her application, stating in writing it “will not make loans with home day care if the home day care income is required to qualify.”
Sisemore, along with Project Sentinel, a nonprofit fair-housing organization, joined to bring this lawsuit, alleging violations of civil rights laws based on the lender’s refusal to approve a home loan to a borrower who operates a home day-care center.
If you were the judge, would you rule the mortgage lender discriminated against Sisemore based on her occupational status?
The judge said yes.
The evidence shows Master Financial refused to approve Sisemore’s home loan based on her source of income from her day-care center, the judge began. Although the lender’s discrimination based on Sisemore’s source of income might not have been intentional, he continued, it was still a violation of civil rights laws to reject the mortgage due to her income source.
Therefore, it was illegal discrimination by the mortgage lender based on Sisemore’s source of income and occupational status, the judge ruled. The lender’s discrimination created a disparate impact against women and families, he concluded.
Based on the 2007 California Court of Appeal decision in Sisemore v. Master Financial Inc., 60 Cal.Rptr.3d 719.
