A lender's HMDA data shows that 85% of white applicants are approved compared to 70% of Hispanic applicants. The lender argues this difference is due to credit score variations. What additional analysis would be most appropriate?
Correct Answer
B) Perform regression analysis including credit scores and other legitimate factors
To properly evaluate the lender's explanation, regression analysis that includes credit scores and other legitimate underwriting factors is necessary to determine if the disparity persists after controlling for creditworthiness, which would suggest potential discrimination.
Why This Is the Correct Answer
To properly evaluate the lender's explanation, regression analysis that includes credit scores and other legitimate underwriting factors is necessary to determine if the disparity persists after controlling for creditworthiness, which would suggest potential discrimination.
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A mortgage company's loan officer refers borrowers to a specific real estate attorney and receives a $50 'marketing fee' for each referral. The attorney argues this is payment for advertising services, not referrals. Under RESPA Section 8, this arrangement is: