When a creditor denies a mortgage application, what right allows the consumer to receive the main reasons for that denial?
Correct Answer
A) Equal Credit Opportunity Act (ECOA)
Under the Equal Credit Opportunity Act (ECOA) and its implementing Regulation B (12 CFR § 1002.9), creditors must provide applicants with a notice stating the specific principal reasons for any adverse action, including a mortgage denial.
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Related Topics & Key Terms
Key Terms:
Related Concepts
The debt-to-income ratio (DTI) compares a borrower's monthly debt obligations to their gross monthly income. It is used by lenders to determine how much mortgage a borrower can afford.
In the context of foreclosure, a deed transfers ownership of the foreclosed property to the new owner, typically the buyer at a foreclosure sale.
Discount points are upfront fees paid to a lender at closing to reduce (buy down) the interest rate on a mortgage loan. One point equals 1% of the loan amount and typically reduces the rate by approximately 0.25%.
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