A loan officer pushes minority applicants into higher-cost products even when they qualify for better terms. What unfair lending practice does this describe?
Correct Answer
B) Illegal steering in lending
Illegal steering in lending is correct because the facts match directing applicants toward less favorable loan products for discriminatory reasons rather than legitimate underwriting needs. That is the best description of the relationship, right, or legal concept tested here.
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Related Topics & Key Terms
Key Terms:
Related Concepts
The secondary mortgage market is where existing mortgage loans are bought and sold between lenders, investors, and government-sponsored enterprises (GSEs) like Fannie Mae, Freddie Mac, and Ginnie Mae.
TILA is a federal law that requires lenders to disclose the true cost of credit to borrowers, including the annual percentage rate (APR), total finance charges, and loan terms. It is implemented by Regulation Z.
A trustee sale is a type of foreclosure where a trustee, appointed under a deed of trust, sells the property at auction to satisfy the debt.
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