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Dealing with discrimination against SSD income

Even though most New Jersey residents probably do not expect to become disabled, the reality is that a significant number of Americans will suffer some type of temporary or permanent disability that results in an inability to work at some point in their lives. When such an unexpected but devastating circumstance occurs, many New Jersey residents with a sufficient work history will be able to collect financial benefits through the Social Security disability system. For many people, these benefits can mean the difference between self-sustaining income during the duration of the disability and extreme poverty. However, receiving such benefits can complicate other things.

In a recent bulletin to mortgage lenders, the Consumer Financial Protection Bureau addressed the difficulty and discrimination many recipients of disability benefits face when they attempt to secure a mortgage loan. According to the CFPB, there are over 15 million people currently receiving Social Security disability--many of whom are veterans--who find that reliance on disability income when trying to get a mortgage loan can sometimes be an insurmountable hurdle. The problem is that many lenders require proof of the duration for which the prospective borrowers will receive the benefits income, but the SSA cannot or will not provide such documentation. The CFPB warned lenders that, although they are required to verify income and examine whether an expiration date for the benefits exists, requiring unnecessary additional documentation can create problems for the lenders under the fair lending standards.

The Social Security disability system is often misunderstood by the public. Many people believe that only retired individuals or the elderly can collect benefits. However, the Social Security Disability system is designed to provide benefits for anyone who becomes disabled as long as they meet the eligibility requirements and have the necessary work history. Receiving disability benefits from the SSA is in no way a "free ride" as workers pay into the system with every paycheck. Therefore, workers who become disabled and need financial assistance should not hesitate to apply for benefits as it is their hard work and earned dollars which have entitled them to the benefits.

Once a worker becomes disabled, he or she should apply for benefits as soon as possible. The process can be quite lengthy, so disabled individuals should not wait to apply. In order to qualify, applicants--in terms of the disability--only have to establish that they have suffered a disability that results in an inability to work and that the disability is expected to last for more than one year or eventually result in death.

Source: HousingWire, "CFPB: Don't discriminate against borrowers on Social Security disability," Ben Lane, Nov. 19, 2014

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