Podcast
Questions and Answers
The Equal Credit Opportunity Act applies to all consumer credit, including residential mortgages.
The Equal Credit Opportunity Act applies to all consumer credit, including residential mortgages.
True
The Fair Housing Act prohibits discrimination based on religion and sex.
The Fair Housing Act prohibits discrimination based on religion and sex.
True
The Community Reinvestment Act has goals to prevent redlining practices.
The Community Reinvestment Act has goals to prevent redlining practices.
False
The Truth in Lending Act is often abbreviated as TILA.
The Truth in Lending Act is often abbreviated as TILA.
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The Real Estate Settlement Procedures Act prohibits certain practices in real estate settlements.
The Real Estate Settlement Procedures Act prohibits certain practices in real estate settlements.
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Which law ensures that lenders do not discriminate based on the source of an applicant's income?
Which law ensures that lenders do not discriminate based on the source of an applicant's income?
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Which of these laws is most directly concerned with preventing redlining?
Which of these laws is most directly concerned with preventing redlining?
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Which Act includes advertising requirements related to the cost of credit?
Which Act includes advertising requirements related to the cost of credit?
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What does the Real Estate Settlement Procedures Act primarily regulate?
What does the Real Estate Settlement Procedures Act primarily regulate?
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Which Act specifically aims to encourage financial institutions to meet the credit needs of the communities they serve?
Which Act specifically aims to encourage financial institutions to meet the credit needs of the communities they serve?
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What is a demand feature in a loan, also known as?
What is a demand feature in a loan, also known as?
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What is the practice of 'loan flipping' considered as?
What is the practice of 'loan flipping' considered as?
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In what lending area are predatory practices commonly found?
In what lending area are predatory practices commonly found?
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Which action is permitted under the Real Estate Settlement Procedures Act?
Which action is permitted under the Real Estate Settlement Procedures Act?
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What practice involves a lender charging an excessively high interest rate and inflated origination fees?
What practice involves a lender charging an excessively high interest rate and inflated origination fees?
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Requiring a borrower to pay a large, single premium at closing for which insurance is considered predatory?
Requiring a borrower to pay a large, single premium at closing for which insurance is considered predatory?
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Which type of borrower is least likely to be targeted by predatory lenders?
Which type of borrower is least likely to be targeted by predatory lenders?
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Which federal law includes provisions that limit the practice of predatory lending?
Which federal law includes provisions that limit the practice of predatory lending?
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What does the Real Estate Settlement Procedures Act (RESPA) primarily aim to do?
What does the Real Estate Settlement Procedures Act (RESPA) primarily aim to do?
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Which type of loan transaction is exempt from RESPA?
Which type of loan transaction is exempt from RESPA?
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Study Notes
Fair Lending and Consumer Protection
- Learning Objectives: After completing this lesson, students should be able to describe the purpose of the Equal Credit Opportunity Act, list discriminatory acts and protected classes under the Fair Housing Act, explain the goals of the Community Reinvestment Act, discuss the role of the Home Mortgage Disclosure Act in preventing redlining, summarize the purpose of the Truth in Lending Act (TILA), describe TILA's advertising requirements, and explain how the right of rescission works, explain the prohibited practices provisions in the Real Estate Settlement Procedures Act (RESPA), understand the TILA-RESPA Integrated Disclosure rules, the associated deadlines, define predatory lending and give examples of predatory practices, and summarize the laws regulating predatory lending.
Suggested Lesson Plan
- Give students Exercise 14.1 to review the previous chapter, "Seller Financing."
- Provide a brief overview of Chapter 14, "Fair Lending and Consumer Protection," and review the learning objectives.
Fair Lending Laws
- Equal Credit Opportunity Act (ECOA): ECOA applies to all consumer credit, including residential mortgages, and prohibits discrimination.
- Fair Housing Act: Prohibits discrimination based on characteristics like race, color, national origin, sex, religion, disability, and familial status, in residential transactions.
- Community Reinvestment Act (CRA): Requires depository institutions to make loans to low- and moderate-income borrowers in the communities where they do business.
- Home Mortgage Disclosure Act (HMDA): Requires large lenders to disclose certain loan originations/purchases to the federal government, to monitor for redlining activities.
Consumer Protection Laws
- Truth in Lending Act (TILA): Requires certain disclosures to loan applicants, such as finance charges and APR. TILA also covers certain advertising requirements.
- Real Estate Settlement Procedures Act (RESPA): Provides borrowers with information about closing costs and prohibits kickbacks that increase settlement costs.
Predatory Lending
- Predatory lending practices are ways lenders take advantage of borrowers, including predatory steering, fee packing, equity stripping, loan flipping, disregarding borrower ability to repay, balloon payments, loan in excess of value, negative amortization, fraud, high-pressure tactics, and advance loan payments.
- Predatory lending laws : Federal and state laws aim to prevent predatory lending practices.
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Description
Test your knowledge on Fair Lending and Consumer Protection with this quiz based on Chapter 14. You'll explore essential laws such as the Equal Credit Opportunity Act, Fair Housing Act, and the Community Reinvestment Act. Understand the practices and regulations that aim to protect consumers in lending scenarios.