Chapter 1
Federal Mortgage Laws and Consumer Protection Regulations
Course: Safe Mlo Prep
Subject: Safe Mlo Prep
Chapter: Federal Mortgage Laws And Consumer Protection Regulations
OVERVIEW
The Fair Housing Act (1968) prohibits discrimination in all residential real estate transactions including mortgage lending. The Community Reinvestment Act (1977) requires banks to serve all income segments of their communities. Together these laws address both discrimination and underinvestment in communities.
- Fair Housing Act — Protected Classes
The Fair Housing Act prohibits discrimination based on seven federal protected classes:
- Race
- Color
- National Origin
- Religion
- Sex
- Disability
- Familial Status
Key distinction:
- Fair Housing Act: 7 protected classes — includes Disability
- ECOA: 9 protected classes — includes Marital status, Age, Public assistance income
- Fair Housing Act does NOT include: Marital status, Age, Source of income
- Types of Discrimination
Disparate Treatment: Intentional discrimination — treating an applicant differently because of a protected characteristic. Intent to discriminate must be shown.