A lender's fair lending examination shows that loan officers in predominantly minority neighborhoods receive different pricing discretion limits than those in predominantly white neighborhoods. This practice would most likely violate:
Correct Answer
B) Fair Housing Act
The Fair Housing Act prohibits discrimination in residential real estate transactions, including lending practices that treat people differently based on the racial composition of neighborhoods. Different pricing policies based on neighborhood demographics could constitute illegal redlining or disparate treatment.
Why This Is the Correct Answer
The Fair Housing Act prohibits discrimination in residential real estate transactions, including lending practices that treat people differently based on the racial composition of neighborhoods. Different pricing policies based on neighborhood demographics could constitute illegal redlining or disparate treatment.
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Previous Question
A real estate agent approaches an MLO with multiple loan applications where the purchase prices seem inflated compared to recent comparable sales. The agent claims the market is 'hot.' What should concern the MLO most?
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A mortgage company's standard practice is to schedule loan closings with only 30 minutes allocated per transaction, knowing that borrowers rarely have sufficient time to review documents thoroughly. When borrowers request more time, they are told that delays could jeopardize their interest rate or closing date. This practice is most likely: