You remain a consumer with rights even as you apply for a loan of any type. No lender can discriminate against you; your rights are protected. There are existing federal laws that aim to provide you with lender discrimination protection so you do not fall prey to the unscrupulous practices of some lenders. The Equal Credit Opportunity Act (ECOA) and the Fair Housing Act (FHA) uphold your rights and guarantee lender discrimination protection. The FHA, though, is more specific and covers mortgage lending. If you are applying for a loan, it is to your best interest to read and be conversant in those two statutes. Know your rights and learn how the law can protect you against lender discrimination.

Coverage of the Law Against Lender Discrimination

The law maintains the equality of all borrowers and lenders should make decisions without the influence of racial or personal factors. Specifically, lenders are prohibited from discriminating against loan applicants based on race, color, religion, marital status, age, gender, national origin, ancestry, and disabilities. Both the ECOA and the FHA have specific provisions that prohibit discrimination against the source of the applicant’s income. Lenders are also mandated to accept anyone as co-signor to the loan, except for the spouse. Lender discrimination protection also covers the appraisal of properties. Appraisals should never be influenced by racial issues. Lenders are also forbidden from inquiring into your future personal plans. For instance, a lender cannot ask you if you are getting married or if you want to have kids.

Know Your Rights If Your Loan Application is Denied

In case a lender denies your credit application, you have the legal right to be informed of the specific reasons behind the lender’s disapproval of your application. General statements of reasons will not do. You are entitled to know the exact details of the lender’s decision against granting you the loan. Lenders are also obliged to notify to you, in writing, about its disapproval of your loan request. The written communication should contain the specific causes and the grounds by which your application was disapproved.

It is also within your rights to demand that the lender give you a written explanation. And if you make that demand, the lender is compelled to respond to your request within thirty days. You should also know that you have the right to obtain a copy of the appraisal report. You may not know if there was any discrimination during the appraisal and valuation of your property unless you get to read the document. These provisions also apply if you receive a loan approval in an amount lower than what you requested for in your application. You can also ask that the lender explain in writing its reasons for not granting you the loan amount you were applying for.

Protection Against Inaccurate Information

You are also protected by the law against any inaccuracies on the credit information reported to the lender. You should get a copy of the same credit report that was used by the lender. If you note any errors in the report, you can rightfully demand to know from the lender from which credit bureau they sourced your credit report. Then you can call the attention of the credit reporting agency, which must review and investigate their sources. It is the obligation of the credit bureau to send you an official notice about the results of its investigation.

Remember that you are a consumer and you have specific rights. You can rely on lender discrimination protection but you will need to know your rights first before you can exercise them. Read and understand the Equal Credit Opportunity Act and the Fair Housing Act to ensure that you are treated right when you apply for a loan.

Have you been a victim of discrimination? Tell us about it by leaving a comment!

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