When obtaining a home loan, you’ll receive two important documents from your lender: a loan estimate and a closing disclosure. On the surface, these documents are very similar, but they both serve different purposes. Here’s what you need to know about the differences between these two forms and what each means for you:
What to Do If You’ve Been a Victim of Mortgage Discrimination
You have gone to your local mortgage company to apply for a KC home loan, only to find that you have been rejected, either on the spot or later on without reason. Perhaps you were even discouraged from applying and ushered out the door. If that is the case, you may have been a victim of mortgage discrimination.
Mortgage discrimination is when a lender refuses someone a loan based on:
- Marital status
The Equal Credit Opportunity Act (ECOA) and the Fair Housing Act (FHA) helps protect against discrimination, but unfortunately cannot stop every case from happening. Thankfully, there are steps you can take to recognize and counter it.
What Are the Signs of Mortgage Discrimination?
You may have been a victim of mortgage discrimination if you were:
- Discouraged from applying
- Refused even though you qualify and are not told why
- Offered a much higher interest rate, even though you qualify for lower
If these signs occur when you apply for a KC home loan, you need to take steps to ensure that your rights are protected. Thankfully, there are many options and sources of help available should you need them.
What Should I Do If I Have Been Discriminated Against?
If you believe you have been discriminated against when applying for a KC home loan, there are some steps you can take:
- Find out why your application was rejected
- Check with your state Attorney General’s office
- Have an agency examine the lender
- Try again at a different lender
You have the right to know why your KC home loan application was rejected. The lender has 30 days from the time you applied to explain in writing why your application was rejected. Make sure the reasons are specific like “You haven’t been employed long enough to qualify” and not vague: “You didn’t meet minimum standards.”
Of course, not every rejected application means you were discriminated against. Even if you have been pre-approved for a KC home loan, there is the chance that it may not be approved based on choice of collateral or ability to repay.
Many states have their own laws regarding mortgage discrimination and how it is to be handled alongside federal statutes. Check with your local law office for more information, as it also has rules when it comes to examining the offending lender to rule whether or not it has acted discriminatorily.
What Can Companies Do to Prevent Discrimination?
There are steps mortgage companies can to do prevent mortgage discrimination. For example, lenders may not ask about a potential borrower’s:
- Plans to have or not have children
It is important to remember that while lenders cannot require an applicant to disclose the above examples, information like marital status and ethnicity is requested on the application. It may be confusing as to why lenders are not allowed to ask about sex or ethnicity, but it is asked on an application.
The reason behind this logic is that the information requested on the form is there to comply with federal regulations to prevent said discrimination. If an applicant does not wish to disclose that information, that is their right and it must be noted on the application.