Written By: Glenn Michaels
All mortgage brokers, and mortgage lenders are not allowed to discriminate when lending money. All mortgage brokers and mortgage lenders have the borrower execute all kinds of documentation stating as a mortgage broker or mortgage lender that we do not discriminate in lending money. How many really look at the documents and what we are supposed to do and not to do.
Need Mortgage Training? CLICK HERE to Download Brochure --->>
Mortgage discrimination is against the law. The Federal Trade Commission (FTC) the nations consumer protection agency protects our borrowers against mortgage discrimination. There are several federal laws and companion state laws require mortgage lenders to lend without regard to the borrower’s race, national origin, sexual orientation, marital status, age, or whether they get public assistance under “The Equal Credit Opportunity Act”.
“The Fair Housing Act”, prohibits lenders from discrimination in all aspects of residential real estate related transactions including:
-Making loans to buy, build, repair, or improve a dwelling:
-Selling, brokering, or appraising residential real estate; and
-Selling or renting a dwelling.
The FHA prohibits discrimination based on race, color, religion, sex, national origin, handicaps, or family status, which is defined as children under 18 living with a parent or legal guardian, pregnant women, and people securing custody of children under 18.
Lenders do’s and don’ts
Lenders must do the following:
-Consider reliable public assistance income the same way as other income,
-Consider reliable income from part – time employment, social security, pensions, and annuities.
-Consider reliable alimony, child support, or separate maintenance payments, if the borrower chooses provide this information. Lenders may ask for proof that the income is received consistently.
-Accept someone other than your spouse as a co – signer if one is needed. If a borrower owns the property with their spouse , he or she may be asked to sign documents that permit them to mortgage the property.
Lenders cannot:
-Discourage a borrower from applying for a mortgage or reject their application because of their race, color, relion, national origin, sex, marital status, age, or receive public assistance.
-Consider the borrowers sex, race, or national origin. A lender may ask and discuss this information to help federal agencies to enforce anti – discrimination laws. A lender may consider the borrowers immigration status and whether the borrower has the right to remain in the country to repay the debt.
-Impose different terms and conditions based on sex, race or other prohibited factors.
-Consider the racial composition of a neighborhood and where someone wants to live .when the property is being appraised.
-Ask about the borrowers’ plans to have a family but can ask about the expenses based on the number of dependents.
-Use discriminatory factors when refusing to purchase a loan or when setting different terms or conditions for the loan purchase.
-Refuse a co – signor if the borrower meets the lender’s standards..
Need Mortgage Training? CLICK HERE to Download Brochure --->>
Make sure your FAIR LENDING RULES are up to date and followed.
About The Author
Glenn Michaels - As an NAMP® staff writer, Glenn Michaels is a mortgage underwriting instructor for Mortgage Underwriter University (www.MortgageUnderwriter.org). As a BBA & FHA DE Underwriter, Glenn is a Pace University graduate who also graduated from New York University’s School of Mortgage Finance. Glenn has conducted numerous training classes and has worked in the mortgage banking industry for 38 years. If you're interested in becoming a writer for NAMP®, please email us at: contact@mortgageprocessor.org.
