Government and Legal Aspects of Mortgages 3
[Continued from: Government / Legal, Part 2]Equal Credit Opportunity Act
In addition to the programs discussed earlier, the government has laws that affect mortgage lenders.The most important of these is called the Equal Credit Opportunity Act (ECOA). It guarantees that everyone receives an equal opportunity to receive a loan. However, it does not say that everyone who applies will be approved; they do evaluate applications based on income and debt standards.
According to the ECOA, a lender may not discourage you from applying based on your sex, marital status, age, race, national origin, or because you receive public assistance income, and other than religion, they can only ask you to voluntarily provide this information.
They cannot ask you if you are widowed or divorced or about your plans to have children. They cannot request information about your spouse unless they are applying with you, although joint property states (Arizona, California, Idaho, Louisiana, Nevada, New Mexico, Texas, and Washington) may ask about your marital status.
There are also guidelines for what they can and cannot do when evaluating your income, and deciding whether or not to grant you credit.