What are Fair Lending Laws and Regulations?
Fair lending laws provide protection to consumers (homeowners and home buyers) to ensure they are treated fairly when applying or refinancing a mortgage. Fair lending is the unbiased treatment of all customers when making a credit related decision
In a broad way fair lending laws are defined under the Fair Housing Act (FHAct) and the Equal Credit Opportunity Act (ECOA). There were other protections provided in 2008 through the Dodd-Frank Act as well.
The Fair Housing Act provides protection for the consumers and homeowner when applying for a mortgage as well as consumers pursuing home improvement loans and rental properties. It protects from discrimination for the following: gender, race, religion, marital status, disability, national origin and color.
The Equal Credit Opportunity Act (ECOA) protects consumers on all types of credit transactions even beyond a mortgage transaction. Some examples of these are auto loans, home improvement loans, store charge cards and credit cards to name a few.
Other protections are also provided by the Americans with Disabilities Act, Civil Rights Act and the Home Mortgage Disclosure Act (HMDA).
Agencies who have authority to enforce lender’s compliance are the Consumer Financial Protection Bureau (CFPB), Department of Justice, Federal Trade Commission, Office of the Comptroller of the Currency, Federal Deposit Insurance Corporation and the Department of Housing and Urban Development.
As always, use a trusted mortgage advisor who complies with all of these regulations.