Home Buying Protection

There are several federal laws which provide you with protection during the home buying process. The Equal Credit Opportunity Act (“ECOA”) and the Fair Housing Act prohibit discrimination, and the Fair Credit Reporting Act (“FCRA”) provides you with the right to certain credit information.

No Discrimination

ECOA prohibits lenders from discriminating against credit applicants in any aspect of credit transactions 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.

The Fair Housing Act prohibits housing discrimination because of race, color, religion, sex, disability, familial status or national origin. This prohibition applies, among other things, to the sale of a home to you, the making of loans for purchasing, constructing, improving, repairing or maintaining a dwelling, and the brokering and appraising of residential real estate.

If you feel you have been discriminated against by a lender or anyone else in the home buying process in violation of the Fair Housing Act, you can file a complaint at no cost with HUD. Following an investigation, if HUD determines that there is a reasonable cause to believe that your rights under the Fair Housing Act have been violated, it will issue a Charge of Discrimination on your behalf that will be adjudicated in administrative proceedings or in federal court. You may also file a complaint under ECOA with the Board of Governors of the Federal Reserve System or with an appropriate state agency under the state’s equal credit opportunity laws.

You may also be able to file a private legal action or take other appropriate action if you are the victim of discrimination. You may wish to consult with an attorney to understand your rights.

Prompt Action/Notification of Action Taken

Your 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 regulates the lender that denied your application so you can contact the agency if you believe it 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 your 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.

HOEPA

If you ever decide to refinance your loan, or if you apply for a home equity installment loan, you should know about the Home Ownership and Equity Protection Act of 1994 (HOEPA). This law addresses certain unfair practices and establishes requirements for certain loans with high rates and fees. You can find more information at:

Federal Trade Commission
Consumer Response Center
600 Pennsylvania Avenue, N.W.
Washington DC 20580
877-382-4357
www.ftc.gov