To prove disparate treatment discrimination, a borrower must demonstrate that:
Correct Answer
B) The lender intentionally treated them differently because of their protected class status
Disparate treatment requires proof of intentional discrimination - that the lender deliberately treated the applicant differently because they belong to a protected class. This is different from disparate impact, which focuses on the discriminatory effect of facially neutral policies rather than intent.
Why This Is the Correct Answer
Disparate treatment requires proof of intentional discrimination - that the lender deliberately treated the applicant differently because they belong to a protected class. This is different from disparate impact, which focuses on the discriminatory effect of facially neutral policies rather than intent.
More Ethics & Fraud Questions
A lender's mobile app prominently displays a 'pre-qualification' feature that asks for minimal information but generates loan amount estimates that are consistently 20-30% higher than what borrowers actually qualify for when they complete full applications. The app includes a disclaimer that estimates are 'subject to full underwriting.' This practice is most likely:
An MLO discovers that multiple loan applications from different borrowers contain identical handwriting in the signature sections, despite different purported signers. The applications were submitted by different real estate agents. What is the most appropriate immediate action?
A mortgage loan originator receives a lead from a real estate agent about a potential borrower. Before calling this consumer, the MLO must:
An MLO tells Asian applicants that they need larger down payments 'because that's what investors prefer for your type of loan,' while telling similarly qualified white applicants that standard down payments are acceptable. This practice represents:
A mortgage company advertises 'Guaranteed approval for all credit types!' but internally has minimum credit score requirements of 580. This advertisement is problematic because it:
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A borrower asks an MLO to recommend whether they should pay points to buy down their interest rate or use that money for a larger down payment. The MLO will earn higher compensation if the borrower pays points. How should the MLO respond?