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Unformatted text preview: ory effect, then the burden is on the institution to show that the practice is required. This is called the “Effects Test.” Some examples of discrimination by effect are rejecting a borrower because of an isolated credit difficulty or credit difficulties in the distant past; not including income from overtime or part–time work, or being overly restrictive on payment–to–income ratios when qualifying borrowers. These practices would discriminate against minority and lower–income groups. It was previously indicated that the institution can adjust the terms of the loan, if necessary, to avoid unsafe and unsound business practices. The act has spelled out further regulations in regard to this. Neighborhood considerations (such as characteristics, or trends in the neighborhood, Location of the property in the neighborhood, etc) unless the institution can prove that such considerations are necessary to avoid unsafe and unsound business practices 11-24 Licensing School for Appraisal, CPA, Contractors, Insurance, Real Estate, Notary, Nurse, Food Handlers, Tax and Securities 11: FINANCING DISCLOSURE REQUIREMENTS
Form 11-1: Fair Lending Notice Dynasty School (www.dynastySchool.com) 11-25 REAL ESTATE FINANCE 11-26 Licensing School for Appraisal, CPA, Contractors, Insurance, Real Estate, Notary, Nurse, Food Handlers, Tax and Securities 11: FINANCING DISCLOSURE REQUIREMENTS FEDERAL EQUAL CREDIT OPPORTUNITY ACT
The Federal Equal Credit Opportunity Act makes it unlawful for a creditor (lender) to discriminate against any applicant on the basis of race, color, religion, national origin or ancestry, sex, marital status, or age (provided the applicant has a capacity to contract). The required disclosure is the Notice of Adverse Action. ADVERSE ACTION
The denial, revocation, or change in the terms of an existing credit arrangement is an adverse action. It does not include a refusal to extend credit under an existing credit arrangement where the applicant is delinquent or otherwise in default. Nor does it include a...
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This note was uploaded on 12/30/2010 for the course SOC 101 taught by Professor Zhung during the Spring '10 term at Punjab Engineering College.
- Spring '10