There are nine prohibited factors under the ECOA. Most people are familiar with seven of them:
gender, race, color, religion, national origin, marital status and age
.
Which of the following are acceptable factors for rejecting a loan?
The most common reasons for rejection include a
low credit score or bad credit history
, a high debt-to-income ratio, unstable employment history, too low of income for the desired loan amount, or missing important information or paperwork within your application.
Which of the following prohibited factors Cannot be used when making credit decisions?
Prohibited bases:
race, color, religion, national origin, sex, marital status
, age (provided the applicant has capacity to contract), receipt of public assistance, or exercise of rights under the Consumer Credit Protection Act.
What is prohibited basis in fair lending?
The definition of prohibited basis varies based on the specific regulation, but the possible prohibited bases are:
race or color, religion, national origin, gender or sex, marital status, age, receipt of income from public assistance
, exercise of rights under the CCPA, handicap, or familial status.
What is not a prohibited factor identified in the fair lending laws?
Under one or both of these laws, a lender may not, because of a prohibited factor:
Fail to provide information or services or provide different information or services regarding any aspect of the lending process
, including credit availability, application procedures, or lending standards.
What are prohibited factors under ECOA?
prohibits creditors from discriminating against credit applicants on the basis of
race, color, religion, national origin, sex, marital status, age
, because an applicant receives income from a public assistance program, or because an applicant has in good faith exercised any right under the Consumer Credit Protection …
What activities are prohibited under ECOA?
Except as otherwise permitted or required by law, a creditor shall
not consider race, color, religion, national origin, or sex
(or an applicant’s or other person’s decision not to provide the information) in any aspect of a credit transaction.
Can a loan be denied after approval?
Keep in mind that a mortgage pre-approval doesn’t guarantee you loans. So, for the question “Can a loan be denied after pre-approval?”
Yes, it can
. Borrowers still need to submit a formal mortgage application with the mortgage lender that pre-approved your loan or a different one.
What happens if you are not approved for a loan?
If you are not approved for a loan, you will
receive what’s called an adverse action letter from the lender explaining why
. By law, you’re entitled to a free copy of your credit report if a loan application is denied.
Why would a loan application be rejected?
Banks may reject a loan application
citing low credit score and the failure to produce required documents
. You can improve your credit score by clearing your expenses and debts on time. You can also opt for a joint loan and assess your income if your loan application has been rejected.
What are the 3 types of lending discrimination?
There are three types of lending discrimination:
overt, disparate treatment and disparate impact
.
What is Reg Z in lending?
Regulation Z
prohibits certain practices relating to payments made to compensate mortgage brokers and other loan originators
. The goal of the amendments is to protect consumers in the mortgage market from unfair practices involving compensation paid to loan originators.
What are two primary fair lending laws?
The federal fair lending laws—
the Equal Credit Opportunity Act and the Fair Housing Act
—prohibit discrimination in credit transactions, including transactions related to residential real estate.
What does the Fair Housing Act prohibit lenders from doing?
What is fair lending? Fair lending prohibits lenders from
considering your race, color, national origin, religion, sex, familial status, or disability
when applying for residential mortgage loans.
What is an example of discrimination in lending?
Examples of Lending Discrimination
Refusing to consider a mortgage applicant’s disability-related income
, such as SSI or SSDI. Steering a borrower to a loan with less favorable terms because of his or her race, color, religion, sex, familial status, national origin or disability.
Is disparate treatment illegal?
Federal laws prohibit job discrimination based on race, color, sex, sexual orientation, gender identity or expression, national origin, religion, age, military status, equal pay, pregnancy, disability or genetic information and
prohibits both “disparate treatment
” and “disparate impact” discrimination.
