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Question 1
Which federal law prohibits discrimination in residential mortgage lending based on race, color, religion, national origin, sex, familial status, or disability?
Answer: The Fair Housing Act (FHA) prohibits discrimination in residential real estate transactions, including mortgage lending, based on these seven protected classes.
Question 2
Under ECOA, what is the maximum number of days a creditor has to notify an applicant of an adverse action after receiving a completed credit application?
Answer: A creditor must notify an applicant of adverse action within 30 days of receiving a completed credit application.
Question 3
What term describes the illegal practice of denying loans or insurance to residents of certain geographic areas, often based on the racial composition of those neighborhoods?
Answer: Redlining is the illegal practice of refusing to lend or offer financial services in specific geographic areas based on the demographic characteristics of those neighborhoods.
Question 4
What is the term for the practice of directing borrowers toward loan products that are more costly or less favorable than the products they qualify for, based on a protected class characteristic?
Answer: Steering is the practice of directing borrowers to loan products based on a protected characteristic rather than the borrowers' actual qualifications, often resulting in higher-cost loans.
Question 5
Under ECOA, which protected basis specifically prohibits discrimination against applicants who receive income from a public assistance program?
Answer: ECOA prohibits discrimination based on the fact that income derives from a public assistance program, making it one of the nine protected bases alongside race, color, religion, national origin, sex, marital status, age, and good-faith exercise of rights.