What is lender discrimination? Were you a victim? What should you do? I once saw an ad inn the mall of a pregnant woman, the caption was “Lender Discrimination was not what I was Expecting“. The caption summed up the advertisement. A lender may NOT deny loans to one or more groups of people primarily on the basis of race, ethnic origin, sex or religion. One of the most notable instances of widespread mortgage discrimination occurred in United States inner city neighborhoods from the 1930’s up until the late 1970’s. There may be evidence that the practice of lender discrimination still continues in the United States today.
How can You protect Yourself from lender discrimination?
- You are treated differently in person than on the phone.
- You are discouraged from applying for credit.
- You hear the lender make negative comments about race, national origin, sex, or other protected groups.
- You are refused credit even though you qualify for it.
- You are offered credit with a higher rate than the one you applied for, even though you qualify for the lower rate.
- You are denied credit, but not given a reason why or told how to find out why.
- Your deal sounds too good to be true.
- You feel pushed or pressured to sign.
Take action if you think you’ve been discriminated against.
- Complain to the lender. Sometimes you can persuade the lender to reconsider your application.
- Check with your state Attorney General’s office to see if the creditor violated state laws: Many states have their own equal credit opportunity laws.
- Consider suing the lender in federal district court. If you win, you can recover your actual damages and be awarded punitive damages if the court finds that the lender’s conduct was willful. You also may recover reasonable lawyers’ fees and court costs. Or you might consider finding other people with the same claim, and get together to file a class action suit.
- Report any violations to the appropriate government agency. If your mortgage application is denied, the lender must give you the name and address of the agency to contact.
“Lender Discrimination was not what I was expecting.” This was the caption under an advertisement i saw in a mall. It was educating the public about Lender Discrimination.
File a Complaint with the appropriate offices.
For ECOA violations:
For FHA violations:
1-800-669-9777; TDD: 1-800-927-9275
For details about the Fair Housing Act, contact Office of Fair Housing and Equal Opportunity.
You have one year to file a complaint with HUD, but you should file as soon as possible.
- Do your research. Shop around. Learn about the various features and downsides of the credit product you want. Research the current interest rates. Compare products from several lenders. Talk to your friends and family members about their credit products.
- Know your credit history. Creditors will make decisions based on your credit history. Be sure there are no mistakes or missing items in your credit reports. Get a free copy of your credit report from each of the three biggest consumer reporting agencies every 12 months. Get your free copy from AnnualCreditReport.com.
- Ask questions. Don’t focus only on your monthly payment. Be sure you understand the rates and fees you will pay over the long run. Ask whether the rates and fees quoted to you by your lender are set, or if there are any circumstances in which the quoted rates and fees could change. Keep asking questions until you are fully satisfied. If a creditor does not want to answer your questions, this could be a bad sign.
- Stay in control. Your lender shouldn’t make you feel rushed, or unnecessarily delay action on your application. Walking away and continuing the discussion later, if you so choose, is a good way to control communications with the lender.
- Don’t sign until you’re satisfied that the credit product works for you. Remember, the product that works for you today may not work for you down the road. Make sure you’ve considered both before you sign.
HT: Wikipedia, Consumer Finance and Government websites.
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We aware of Lender Discrimination,and what to do if you are a victim.