Protection Against Discrimination
When you apply for a home equity or refinancing loan, you are protected
against discrimination by Equal Credit Opportunity Act (ECOA) and
the Fair Housing Act (FHA). These acts protects you against discrimination
based on race, color, religion, national origin, sex, marital status,
age, familial status (defined as children under the age of 18 living
with a parent) and handicap.
Lenders cannot treat the following sources of income any differently:
income from public assistance, part-time employment, Social Security,
pensions, annuities, alimony, child support, or separate maintenance
payments. If a co-signer is needed, the lender must 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
For appraisal or any other purpose, the lender cannot be consider
the racial composition of the neighborhood where the property is
in. A lender cannot ask about your plans for having a family. A
lender cannot set different terms or conditions for the loan based
on discriminatory factors.
If your loan is denied.
If your loan is denied, the lender must give you specific reasons
why or tell you of your right to ask for them. Under the law, you
have the right to know within 30 days of the date of your completed
application whether your mortgage loan is approved. The lender must
make a reasonable effort to obtain all necessary information, such
as credit reports and property appraisals. If your application is
rejected, the lender must tell you in writing.
You also have the right to know specifically why your application
was rejected. The lender must tell you the specific reason for the
rejection or your right to learn the reason if you ask within 60
days. An acceptable response might be: "your income was too
low" or "you haven't been employed long enough."
A response of "you didn't meet our minimum standards"
is not specific enough.
You also have the right to learn the specific reason why you were
offered less favorable terms than you applied for, but only if you
reject these terms. For example, if the lender offered you a smaller
mortgage or a higher interest rate, you have the right to know why
if you did not accept the lender's counter offer.
You also have the right to get a copy of the property appraisal
from the lender. Mortgage loan applications may be turned down because
of poor appraisals. Review the appraisal. Check that it contains
accurate information and determine whether the appraiser considered
illegal factors, such as the racial composition of the neighborhood.
If you suspect discrimination.