A lender requires all applicants to provide tax returns for the past two years, but consistently waives this requirement for white applicants while strictly enforcing it for minority applicants. This is an example of:
Correct Answer
B) Disparate treatment discrimination
This is disparate treatment discrimination because the lender is intentionally applying different standards based on the protected class of the applicants. Disparate treatment involves intentional discrimination where similarly situated applicants are treated differently because of their race, color, religion, sex, handicap, familial status, or national origin.
Why This Is the Correct Answer
This is disparate treatment discrimination because the lender is intentionally applying different standards based on the protected class of the applicants. Disparate treatment involves intentional discrimination where similarly situated applicants are treated differently because of their race, color, religion, sex, handicap, familial status, or national origin.
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Previous Question
A first-time homebuyer inflates their down payment amount on the loan application by claiming a gift from relatives that doesn't exist, because they want to avoid PMI and secure their dream home. This scenario represents:
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An MLO encounters an application where the borrower's adult child is listed as a co-borrower but will not live in the property, and the income ratios only work with both incomes included. The child admits they are only helping their parent qualify. This represents: