Section 4 Unit 4 Federal Mortgage Laws and Regulations Flashcards
ECOA
Equal Credit Opportunity Act
Even today, applicants are denied credit based on not only on these factors but on skin, color, martial status, religion, public assistance income, an other
Who enforces the ECOA
The consumer Financial Protection Bureau (CFPB) enforces the ECOA through Regulation B, which specifies that applicants for credit be judged only on their creditworthiness (income, net worth, job stability, credit rating, etc).
Prohibited Practices Based on ECOA
Asking questions about sex, race, color, religion, national origin, age, martial status or receipt of public assistance or discouraging someone from applying for a loan based on any of these factors.
- Setting different loan terms or conditions based on an applicant’s sex, race, religion, color. national origin, age, martial status or receipt of public assistance.
3.
When applications are denied
Within 30 days and must deliver to the applicant a written statement specifying the reasons for denial
Among other things, ECOA sets forth specific requirements for notifications regarding denial of credit and disclosures (such as the borrower’s right to receive a copy of the appraisal) and requires that lenders must provide a copy of all completed home appraisals, whether the credit is granted or not
Adverse Actions
Refusing to grant credit
Terminating an account or making an unfavorable change to existing account
Refusing to increase available credit to an individual who has applied for an increase.
Disclosure Time lines
Within 30 days of taking adverse action on an incomplete application.
Denied
Within 30 days of taking adverse action on an existing account
Counter offer
Within 90 days of providing an applicant with a counter offer (i.e., an offer to grant credit of a different amount or on different terms than those applied for), if the applicant does not expressly accept or use the credit offered.
