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.
More Federal Laws Questions
A mortgage broker's website states 'Qualified borrowers can get loans with down payments as low as 3%.' Which statement about TILA advertising requirements is correct?
A loan's APR increases from 4.25% on the Loan Estimate to 4.35% on the Closing Disclosure due to a rate lock expiration. What action is required?
Which of the following documents must be provided to trigger the start of the 3-day rescission period?
For a closed-end mortgage loan, when must the creditor provide the Closing Disclosure to the borrower?
Which information is NOT required to be included in an AfBA disclosure?
A lender quotes an APR of 4.25% on a mortgage loan, but the actual APR calculation results in 4.28%. Under TILA's APR accuracy tolerance, is this disclosure compliant?
Which of the following fees would NOT be included in the finance charge calculation under TILA?
For a purchase money mortgage with a loan amount of $400,000, which of the following represents the correct method for calculating the APR?
A servicer receives a borrower's written request for payoff information on Monday. The borrower needs the information for a refinance closing scheduled for the following Friday. When must the servicer provide an accurate payoff statement?
A lender provides a borrower with initial TILA disclosures showing an APR of 4.5%. Due to market changes, the final APR at closing is 4.625%. What disclosure requirement applies?
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A borrower with a conventional loan made a 10% down payment. Three years later, they complete a major home renovation that increases the property value by 25%. Can they immediately request PMI cancellation based on the increased property value?
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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: