Federal law topics-fair and equal credit and lending laws

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Reference no: EM131676941

Mortgage Prelicense - Federal Law Topics-Fair and Equal Credit and Lending laws

Irma Perez wants a loan which will be secured by a house she intends to purchase by herself. She lives in a state that does not have community property laws. She has two little boys from a previous marriage, a high paying job that she has had for over three years and $30,000 for a down payment on a house.

While filling out the 1003 form, you have to ask Irma a number of questions. Use what you learned from the lesson material to answer the following questions. Some of these questions will comply with ECOA, and others will not. Some of the questions relate to creditworthiness issues while others might be considered discriminatory in nature. It is important to know the difference between these.

1?Under ECOA a creditor may not ask if an applicant is married, but there are exceptions to this law. In this scenario what is the reason you are allowed to ask Irma this?

2?The 1003 gives three choices for marital status. Can you ask Irma if she is divorced for this question? Why or why not? What are you violating?

3?Irma has mentioned she is receiving child support from her ex-husband. What do you need to tell her concerning this income?

4?The 1003 form clearly asks Irma if she is a US citizen or permanent resident alien. Who does this question protect and why it is asked?

5?If you ask Irma if she is from Mexico, under ECOA what are you potentially in violation of?

6?As an exception to ECOA, only in Section X of the 1003 may you ask Irma’s ethnicity, race and sex. What law allows this and what three things do you have to tell her about answering these questions?

Reference no: EM131676941

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