Understanding Your Rights to Fair Lending

Federal law protects every homebuyer looking for a mortgage loan against discrimination on the basis of race, color, national origin, religion, sex, marital status, age, receipt of public assistance funds, familial status (having children under the age of 18), handicap, or exercising your rights under other consumer credit protection laws. Lenders may not take any of these factors into account in their dealings with you.

For instance, lenders may not discourage you because of your race or national origin from applying for a mortgage loan. Whatever your color, they must offer you the same credit terms as other applicants with similar loan requests. They may not treat your application differently because of your sex or marital status or familial status. In short, they are barred from taking into account any of the factors listed here in their dealings with applicants or with potential applicants. They should:

Willingly give you an application and other information you need on how to apply for a loan
Willingly discuss with you the various mortgage loans they offer and give you an idea whether you can qualify for them
Diligently act to make a decision--without undue delay--once you provide all the information asked for (including, for example, written evidence of how much you make or how much you have in savings), and once they receive other paperwork required for processing the application (such as a property appraisal)
Not be influenced by the racial or ethnic composition of the neighborhood where the home you want to buy is located.

If you apply for a mortgage and are turned down, remember that not all institutions have the same lending standards. Shop around for another lender. But if the way you were treated suggests the possibility of unlawful discrimination, you might talk to:

Private fair housing groupsOften these groups can walk you through the mortgage process. They can also help you understand whether your experience suggests that the lender is discriminating unlawfully, and can help you decide whether to file a complaint.

Human rights agenciesThese are government agencies set up by a city, county, or state government to deal with discrimination.

AttorneysThey can advise you whether the treatment you received gives you legal grounds for bringing a lawsuit against the lender. They can tell you about monetary damages and other types of relief available to individuals who can prove that illegal discrimination occurred.

Federal or state enforcement agenciesThey can check the activities of mortgage lenders to make sure they complied with the laws against lending discrimination. When you write, include your name and address; name and address of the lending institution you are complaining about; address of the house involved; and a short description and the date of the alleged violation.

Federal Laws Against Discrimination in Home Financing

The Fair Housing Act prohibits discrimination in housing sales or loans on the basis of race, religion, color, national origin, sex, familial status (having children under the age of 18), or handicap.

The Equal Credit Opportunity Act prohibits discrimination in any aspect of a credit transaction on the basis of race, religion, age, color, national origin, receipt of public assistance funds, sex, marital status, or the exercise of any right under the Consumer Credit Protection Act.