Podcast
Questions and Answers
What information cannot be requested from individual credit applicants?
What information cannot be requested from individual credit applicants?
- Spouse's employment status (correct)
- Residency status
- Marital status
- Dependent children count
In evaluating applications, which statement accurately reflects the treatment of public assistance income?
In evaluating applications, which statement accurately reflects the treatment of public assistance income?
- It must be considered equally with other sources of income. (correct)
- It can only be considered if full disclosure is provided.
- It is preferentially evaluated if from a long-term source.
- It must be disregarded in favor of regular employment income.
Which of the following inquiries is a lender prohibited from making?
Which of the following inquiries is a lender prohibited from making?
- How many dependent children the borrower has
- Borrower's employment status
- If the borrower has marital plans (correct)
- Borrower's credit history
What is the required approach for evaluating income from part-time employment?
What is the required approach for evaluating income from part-time employment?
Which of the following statements about alimony and child support income is true?
Which of the following statements about alimony and child support income is true?
What is the maximum punitive damage allowed in individual lawsuits under the Act?
What is the maximum punitive damage allowed in individual lawsuits under the Act?
Which of the following is a requirement regarding adverse action notices?
Which of the following is a requirement regarding adverse action notices?
What must lenders consider when determining a borrower's qualification for special loan programs?
What must lenders consider when determining a borrower's qualification for special loan programs?
What constitutes a referral in the context of settlement services?
What constitutes a referral in the context of settlement services?
When is the Affiliated Business Arrangement Disclosure required to be provided?
When is the Affiliated Business Arrangement Disclosure required to be provided?
What is considered an affiliate relationship according to the content?
What is considered an affiliate relationship according to the content?
Which act was established to prevent discrimination in housing?
Which act was established to prevent discrimination in housing?
Which of the following is NOT a prohibited basis for discrimination under the Equal Credit Opportunity Act?
Which of the following is NOT a prohibited basis for discrimination under the Equal Credit Opportunity Act?
What must lenders avoid doing in their advertising as per prohibited practices?
What must lenders avoid doing in their advertising as per prohibited practices?
What are the implications of the Fair Housing Act amendments for familial status?
What are the implications of the Fair Housing Act amendments for familial status?
Which group is specifically mentioned as being protected from discrimination in lending?
Which group is specifically mentioned as being protected from discrimination in lending?
Flashcards
What is a referral?
What is a referral?
Any verbal or written action intended to influence a borrower's choice of a business provider or settlement service.
What is an Affiliated Business Arrangement Disclosure?
What is an Affiliated Business Arrangement Disclosure?
A disclosure required when a lender has an affiliate relationship with a settlement service provider, informing the borrower of the shared ownership or other relationship between the lender and the provider.
What are prohibited practices under the Equal Credit Opportunity Act?
What are prohibited practices under the Equal Credit Opportunity Act?
A lender cannot discriminate against an applicant regarding any aspect of a credit transaction based on certain protected characteristics.
What are 'prohibited bases' under ECOA?
What are 'prohibited bases' under ECOA?
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Can lenders inquire about an applicant's immigration status?
Can lenders inquire about an applicant's immigration status?
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What does the Fair Housing Act prohibit?
What does the Fair Housing Act prohibit?
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What constitutes an affiliate relationship in the context of settlement service providers?
What constitutes an affiliate relationship in the context of settlement service providers?
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What limitations are there on lenders' advertising under ECOA?
What limitations are there on lenders' advertising under ECOA?
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Income Evaluation
Income Evaluation
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Health Inquiry Prohibition
Health Inquiry Prohibition
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Family Status Inquiry
Family Status Inquiry
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Public Assistance Income Treatment
Public Assistance Income Treatment
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Income Discrimination Prohibition
Income Discrimination Prohibition
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Spouse Information Prohibition
Spouse Information Prohibition
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Adverse Action Notices
Adverse Action Notices
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Enforcement and Penalties
Enforcement and Penalties
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Study Notes
Referral Definition and Disclosures
- A referral is any action, verbal or written, meant to influence a borrower's choice of business provider or settlement service.
- If a lender has ties with a settlement service provider, an Affiliated Business Arrangement Disclosure is needed at application or when referring to the affiliated business.
- This disclosure tells borrowers about shared ownership or other relationships between the lender/broker and a potential third-party service provider (e.g., title company).
- An affiliate relationship exists when a person or company referring business holds more than 1% ownership in a settlement service provider.
Fair Housing and Equal Credit Opportunity
- The Fair Housing Act prohibits discrimination in housing based on protected characteristics (race, color, national origin, religion, sex, familial status, disability).
- The Equal Credit Opportunity Act (ECOA) prevents discrimination in lending.
- Prohibited bases for discrimination include race, color, religion, national origin, sex, marital status, age (if able to contract), and public assistance income source.
- Lenders can't make statements discouraging applications based on prohibited characteristics.
- Lenders cannot ask about a spouse's/former spouse's information for individual credit applications.
- Lenders may ask about dependents and marital status for certain loan programs when needed for qualification.
- Inquiry about health issues is prohibited.
- Income from alimony, child support, or separate maintenance can be reported and evaluated as other income.
- Applicants aren't obligated to disclose such income sources, and lenders cannot discriminate against them for doing so.
- Credit extensions cannot be restricted or offered preferentially based on a protected characteristic.
- Adverse action notifications have specific timing and content requirements.
- Compliance recordkeeping and electronic communication requirements are in place.
- Penalties for violations, including punitive damages, are outlined.
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