Under ECOA, a California lender rejects a married woman's mortgage application because she listed income from child support. Is this action lawful?
Correct Answer
B) No, ECOA requires lenders to consider reliable alimony, child support, and separate maintenance income if the applicant discloses it
Under ECOA and Regulation B, lenders must consider income from alimony, child support, and separate maintenance payments if the applicant voluntarily discloses it and it can be verified as reliable. Ignoring or rejecting these income sources constitutes discrimination.
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Related Topics & Key Terms
Key Terms:
Related Concepts
A fixed-rate mortgage has an interest rate that remains constant for the entire term of the loan, resulting in equal monthly principal and interest payments throughout the life of the mortgage.
Foreclosure is the legal process by which a lender takes possession of a property when a borrower fails to make mortgage payments. It allows the lender to sell the property to recover the outstanding debt.
The loan-to-value ratio (LTV) is the percentage of a property's appraised value or purchase price (whichever is lower) that is being financed through a mortgage. LTV = Loan Amount / Property Value.
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