Discrimination in
mortgage lending is prohibited by the federal Fair
Housing Act and HUD's Office of Fair Housing and Equal Opportunity actively
enforces those provisions of the law. The Fair Housing Act makes it unlawful to
engage in the following practices based on race, color, national origin, religion,
sex, familial status or handicap (disability): - Refuse
to make a mortgage loan
- Refuse
to provide information regarding loans
- Impose
different terms or conditions on a loan, such as different interest rates, points,
or fees
- Discriminate
in appraising property
- Refuse
to purchase a loan or set different terms or conditions for purchasing a loan
Filing
a Complaint If
you have experienced any one of the above actions, you may be the victim of discrimination.
Recognizing the signs of lending discrimination is the first step in filing a
complaint. HUD investigates your complaints at no cost to you. If you believe
you have experienced lending discrimination, visit our housing
discrimination complaint website to learn more about the complaint process.
HUD
Fair Lending Studies Pre-application
inquiries about mortgage lending financing options represent a critical phase
in the homebuying process. If potential homebuyers cannot obtain full and fair
access to information about mortgage financing, they may give up on their pursuit
of homeownership, their housing search may be restricted, or they may be unable
to negotiate the most favorable loan terms. HUD has conducted a number of studies
to determine whether minority homebuyers receive the same treatment and information
as whites during the mortgage lending process. Read more on mortgage
lending discrimination studies.
Subprime Lending Subprime
loans play a significant role in today's mortgage lending market, making homeownership
possible for many families who have blemished credit histories or who otherwise
fail to qualify for prime, conventional loans. A recent HUD analysis, based on
HMDA and related data, shows that the number of home purchase subprime applications
increased from 327,644 in 1997 to 783,921 in 2000. While the subprime
mortgage market serves a legitimate role, these loans tend to cost more and sometimes
have less advantageous terms than prime market loans. Additionally, subprime lenders
are largely unregulated by the federal government. Data shows blacks are much
more likely than whites to get a subprime loan, and many of the borrowers who
take out these loans could qualify for loans with better rates and terms. As such,
many have expressed fair lending concerns about the subprime market. Read more
on Subprime Lending.
Predatory Lending Some
lenders, often referred to as predatory lenders, saddle borrowers with loans that
come with outrageous terms and conditions, often through deception. Elderly women
and minorities frequently report that they have been targeted, or preyed upon,
by these lenders. The typical predatory loan is: (1) in excess of those available
to similarly situated borrowers from other lenders elsewhere in the lending market,
(2) not justified by the creditworthiness of the borrower or the risk of loss,
and (3) secured by the borrower's home. HUD is working hard to fight against predatory
lending.
Minority Homeownership HUD
is committed to increasing homeownership opportunities for all Americans. HUD
is engaged in a special effort to boost the minority homeownership rate since
the rate for black and Hispanic Americans lags behind that of others. Read more
about HUD's efforts to Increase Minority
Homeownership.
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