are several federal laws which provide you with protection during
the processing of your loan. The Equal Credit Opportunity Act ("ECOA"),
the Fair Housing Act, and the Fair Credit Reporting Act ("FCRA")
prohibit discrimination and provide you with the right to certain
Discrimination. ECOA prohibits lenders from discriminating
against credit applicants on the basis of race, color, religion,
national origin, sex, marital status, age, the fact that all or
part of the applicant's income comes from any public assistance
program, or the fact that the applicant has exercised any right
under any federal consumer credit protection law. To help government
agencies monitor ECOA compliance, your lender or mortgage broker
must request certain information regarding your race, sex, marital
status and age when taking your loan application.
Fair Housing Act also prohibits discrimination in residential real
estate transactions on the basis of race, color, religion, sex,
handicap, familial status or national origin. This prohibition applies
to both the sale of a home to you and the decision by a lender to
give you a loan to help pay for that home. Finally, your locality
or state may also have a law which prohibits discrimination.
there are differences in the types and amounts of settlement costs
charged to the borrower -- for example, some borrowers are charged
greater fees for mortgages depending on their credit worthiness.
These differences may be justified or they may be unlawfully discriminatory.
It is important that you examine your settlement documents closely,
especially lines 808-811 on the HUD-1 settlement statement, and
do not hesitate to compare your settlement costs with those of your
friends and neighbors.
you feel you have been discriminated against by a lender or anyone
else in the home buying process, you may file a private legal action
against that person or complain to a state, local or federal administrative
agency. You may want to talk to an attorney; or you may want to
ask the federal agency that enforces ECOA (the Board of Governors
of the Federal Reserve System) or the Fair Housing Act (HUD) about
your rights under these laws.
Action/Notification of Action Taken. Your lender or
mortgage broker must act on your application and inform you of the
action taken no later than 30 days after it receives your completed
application. Your application will not be considered complete, and
the 30 day period will not begin, until you provide to your lender
or mortgage broker all of the material and information requested.
of Reasons for Denial. If your application
is denied, ECOA requires your lender or mortgage broker to give
you a statement of the specific reasons why it denied your application
or tell you how you can obtain such a statement. The notice will
also tell you which federal agency to contact if you think the lender
or mortgage broker has illegally discriminated against you.
Your Credit Report. The Fair Credit Reporting
Act ("FCRA") requires a lender or mortgage broker that
denies your loan application to tell you whether it based its decision
on information contained in your credit report. If that information
was a reason for the denial, the notice will tell you where you
can get a free copy of the credit report. You have the right to
dispute the accuracy or completeness of any information in your
credit report. If you dispute any information, the credit reporting
agency that prepared the report must investigate free of charge
and notify you of the results of the investigation.
Your Appraisal. The lender needs to know if the value
of your home is enough to secure the loan. To get this information,
the lender typically hires an appraiser, who gives a professional
opinion about the value of your home. ECOA requires your lender
or mortgage broker to tell you that you have a right to get a copy
of the appraisal report. The notice will also tell you how and when
you can ask for a copy.
March 13, 2009