Equal Credit Opportunity Act (ECOA) (Free Tutorial)

Описание: Welcome to the second episode of the National Mortgage Exam Tutorials & Practice Tests videos. The series will be following the sequence of topics as presented in the NMLS test content outline at https://bit.ly/NMLSoutline. Near the end of each video there is a link for downloading practice questions.

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The Equal Credit Opportunity Act was enacted in 1974 and implemented as Regulation B. It was written to prohibit certain types of discrimination by lenders.
• Race.
• Color.
• Religion.
• National origin.
• Sex. Includes sexual orientation and gender identification
• Marital status. 3 statuses: Married, Unmarried and Separated
• Age (provided the applicant has attained the minimum legal age in the state).
• Receipt of income from a public assistance program.
• History of having exercised any rights under the Consumer Credit Protection Act.

Mortgage Loan Originator (MLO) Actions When Borrower Refuses To Provide Race/Gender Information – guess based on visual observation or surname

Prohibited Factors
• Don’t discuss applicant’s spouse unless they are part of the transaction or it’s a community property state or the applicant relies on alimony or child support as qualifying sources of income.
• No questions regarding birth control, current pregnancy or intent to have future children.
• Don’t evaluate an elderly (age 62 or older) applicant differently from anyone else.
• Don’t require a qualified applicant to provide a cosigner.
• Don’t steer minority applicants into different types of loan products than other applicants.
• Don’t treat men and women applicants differently.
• Don’t require more documentation from a minority applicant.

Acceptable Factors
• Questions may be asked about applicant’s immigration status and permanent residency, and the answers may affect the lending decision.
• An applicant’s credit history may be taken into account.
• Part-time income, annuity, pension or other forms of retirement pay may be taken into account.

Adverse Action Notice
An adverse action notice is sent to an applicant when a loan is denied. The notice must contain the following information:
• Action taken.
• Name and address of the creditor.
• A statement of the provisions of section 701(a) of the Equal Credit Opportunity Act.
• Name and address of the Federal agency that administers compliance with respect to the creditor.
• A notice and statement of specific reasons for the action taken or a disclosure of the applicant’s right to a statement of specific reasons within 30 days after receiving the application.

If the lender did not provide the reasons for denial in the initial adverse action notice, then the applicant can request a statement of reasons within 60 days of receiving the original adverse action notice, and the lender has 30 days after the applicant’s request to provide him with the information.

Think: 30-60-30

If the applicant doesn’t accept a counteroffer within 90 days, the lender notifies the applicant of an adverse action.

The disclosure shall include the name, address, and telephone number of the person or office from which the statement of reasons can be obtained.