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.
|