Fair Lending

Fair housing and fair lending laws were enacted to insure equal and fair access to housing, insurance, lending and financial services. Fair lending laws require equal opportunity without regard to an applicant’s personal characteristics or the racial or ethnic demographics of the neighborhood in which a property is located. These laws protect the rights of consumers and housing providers.

The Fair Housing Act prohibits discrimination based on these protected classes: race, color, national origin, religion, sex, familial status and disability.

The Fair Housing Act makes it unlawful to discriminate against an individual or members of protected class in the following residential real estate related transactions:

  • Making available mortgage loans
  • Providing information on mortgage loans
  • The terms and conditions of a mortgage loan (for example: offering a different interest rate, points, or fees based on a protected class)
  • Appraising real estate
  • Purchasing mortgage loans

Call us at 631-567-5111 ext. 375 to speak to a trained Fair Lending Investigator or Advocate.

Types of Discrimination That are Outlawed:

Overt – When a lender openly discriminates on a prohibited basis. For example: “No loans to Jews.” or “We can’t offer you a loan in that neighborhood because it is predominantly African American.”

Different Treatment – Unfair, unequal treatment (may be subtle) of one person compared to another based on membership in a protected class. For example: Two minority loan applicants were told that it would take several hours and require the payment of an application fee to determine whether they would qualify for a home mortgage loan. In contrast, a loan officer took financial information immediately from non-minority applicants and determined whether they qualified in minutes, without a fee being paid.

Disparate Impact – A neutral policy on its face applied uniformly but which results in a discriminatory effect on a protected class. For example: A mortgage lender has a policy of not making single family home loans for less than $200,000. This policy may exclude a high number of applicants who have lower income levels or lower home values than the rest of the applicant pool.

Redlining – A practice of not providing loan products or services in a community due to its racial or ethnic demographics. For example: A bank provides no services for a geographic area off from offering mortgage loans because that geographic area has a majority of Hispanic residents.

Reverse Redlining – It is the reverse of redlining: The bank or lender targets its advertising and loan products or services in a discriminatory way based on racial or ethnic demographics. Such predatory loan terms can include negative amortizing loans, adjustable rate mortgages and interest only loans and are less favorable, more costly to borrower in a manner that negatively impacts protected class/es and communities.
For more information on lending discrimination or to report a suspected discriminatory practice in lending please

 LIHS- Warning Signs of a “ Predatory Loan”

 LIHS- Señales de Advertencia de un “Préstamo Hipotecario Predatorio”- Español