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There are several federal laws which
provide you with protection during the processing of your loan. The Equal
Credit Opportunity Act (ECOA), the Fair Housing Act, and the Fair Credit
Reporting Act (FCRA) prohibit discrimination and provide you with the
right to certain credit information.
No Discrimination. ECOA
prohibits lenders from discriminating against credit applicants on the
basis of race, color, religion, national origin, sex, marital status, age,
the fact that all or part of the applicant's income comes from any public
assistance program, or the fact that the applicant has exercised any right
under any federal consumer credit protection law. To help government
agencies monitor ECOA compliance, your lender or mortgage broker must
request certain information regarding your race, sex, marital status and
age when taking your loan application.
The Fair Housing Act also
prohibits discrimination in residential real estate transactions on the
basis of race, color, religion, sex, handicap, familial status or national
origin. This prohibition applies to both the sale of a home to you and the
decision by a lender to give you a loan to help pay for that home.
Finally, your locality or state may also have a law which prohibits
discrimination.
Frequently, there are differences in
the types and amounts of settlement costs charged to the borrower -- for
example, some borrowers are charged greater fees for mortgages depending
on their credit worthiness. These differences may be justified or they may
be unlawfully discriminatory. It is important that you examine your
settlement documents closely, especially lines 808-811 on the HUD-1
settlement statement, and do not hesitate to compare your settlement costs
with those of your friends and neighbors.
If you feel you have been
discriminated against by a lender or anyone else in the home buying
process, you may file a private legal action against that person or
complain to a state, local or federal administrative agency. You may want
to talk to an attorney; or you may want to ask the federal agency that
enforces ECOA (the Board of Governors of the Federal Reserve System) or
the Fair Housing Act (HUD) about your rights under these laws.
Prompt Action/Notification of
Action Taken. Your Prescott Arizona lender or mortgage broker must act on
your application and inform you of the action taken no later than 30 days
after it receives your completed application. Your application will not be
considered complete, and the 30 day period will not begin, until you
provide to your lender or mortgage broker all of the material and
information requested. Statement of Reasons for Denial. If your
application is denied, ECOA requires your lender or mortgage broker to
give you a statement of the specific reasons why it denied your
application or tell you how you can obtain such a statement. The notice
will also tell you which federal agency to contact if you think the lender
or mortgage broker has illegally discriminated against you.
Obtaining Your Credit Report.
The Fair Credit Reporting Act (FCRA) requires a lender or mortgage broker
that denies your loan application to tell you whether it based its
decision on information contained in our credit report. If that
information was a reason for the denial, the notice will tell you where
you can get a free copy of the credit report. You have the right to
dispute the accuracy or completeness of any information in your credit
report. If you dispute any information, the credit reporting agency that
prepared the report must investigate free of charge and notify you of the
results of the investigation.
Obtaining Your Appraisal. The
lender needs to know if the value of your home is enough to secure the
loan. To get this information, the lender typically hires an appraiser,
who gives a professional opinion about the value of your home. ECOA
requires your lender or mortgage broker to tell you that you have a right
to get a copy of the appraisal report. The notice will also tell you how
and when you can ask for a copy.
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