Mortgage Discrimination:
The Equal Credit Opportunity
Act (ECOA) and the Fair Housing Act (FHA) protect
you against discrimination when you apply for
a mortgage to purchase, refinance, or make home
improvements.
Your Rights Under
ECOA
The ECOA prohibits discrimination in any aspect
of a credit transaction based on:
- Race or Color
- Religion
- National Origin
- Sex
- Marital Status
- Age (provided the
applicant has the capacity to contract)
- The applicant’s receipt
of income derived from any public assistance
program
- The applicant’s exercise,
in good faith, of any right under the Consumer
Credit Protection Act, the umbrella statute
that includes ECOA.
Your Rights Under
FHA
The FHA prohibits
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.
- It also prohibits
discrimination based on:
- Race or color;
- National origin;
- Religion;
- Sex;
- Familial status (defined
as children under the age of 18 living with
a parent or legal guardian, pregnant women,
and people securing custody of children under
18); and
- Handicap.
Lender Do’s and Don’ts
Lenders must:
- Consider reliable
public assistance income in 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 you choose to provide this information.
A lender may ask you for proof that this income
is received consistently.
- If a co-signer is
needed, accept someone other than your spouse.
If you own the property with your spouse, he
or she may be asked to sign documents allowing
you to mortgage the property.
Lenders cannot:
- Discourage you from
applying for a mortgage or reject your application
because of your race, national origin, religion,
sex, marital status, age, or because you receive
public assistance income.
- Consider your race,
national origin, or sex, although you will be
asked to voluntarily disclose this information
to help federal agencies enforce anti-discrimination
laws. A creditor may consider your immigration
status and whether you have the right to remain
in the country long enough to repay the debt.
- Impose different terms
or conditions, such as a higher interest rate
or larger down payment, on a loan based on your
race, sex, or other prohibited factors.
- Consider the racial
composition of the neighborhood where you want
to live. This also applies when the property
is being appraised.
- Ask about your plans
for having a family. Questions about expenses
related to your dependents are permitted.
- Refuse to purchase
a loan or set different terms or conditions
for the loan purchase based on discriminatory
factors.
- Require a co-signer
if you meet the lender’s standards.
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