Why Fair Lending is Important

Fair lending laws protect consumers from discrimination in any aspect of a credit transaction, including marketing, application, loan origination, processing, and underwriting.

There are several laws and regulations that are implemented to ensure mortgage professionals treat all people equally and in a nondiscriminatory manner.

We will review these throughout this training and discuss what you must do to be sure to avoid discrimination.

Your Company’s Fair Lending Policy

Your company’s fair lending policy represents your commitment to fair lending. It’s important that all employees follow and adhere to that commitment. Once you have completed the training, you will be tested to ensure that you know how important it is to treat all loan applicants fairly, without discrimination, and in compliance with applicable state and federal laws.

Why is This Important?

All mortgage lenders are subject to various state and federal fair lending laws. It’s important for you to understand the laws that govern this business so you can help ensure you remain in compliance.

Fair Lending Laws

As we discussed earlier, fair lending laws protect consumers from discrimination in any aspect of a credit transaction, including marketing, application, loan origination, processing and underwriting. Other laws with which you must comply regulate the nature and extent of disclosure that must be made, and the way loans may be solicited.

Violations

Violation of any of these laws is very serious and may result in substantial penalties.

It can also lead to civil and criminal enforcement actions by government agencies, and can expose your company, as well as the involved employees, to civil liability.

Negotiations

Mortgage lending is a competitive business, and negotiating loan terms is an integral part of that business. It’s critical to remember that all negotiations must be entered and consummated in good faith and without bias. This must be done to ensure compliance with both the letter and the spirit of fair lending practices.

Expectations

All employees are expected to fully understand fair lending practices, to deal fairly and equally with all loan applicants, and to immediately report any activity that appears to violate the fair lending practices. In other words, everybody is expected to do the right thing.

Employee Training

All existing and new employees should receive and acknowledge that they have completed Fair Lending Training.

As a new employee you may be expected to complete this training within 30 days of hire.

All employees should complete annual Fair Lending Training.

Consumer Complaints

It is the responsibility of each business unit to ensure all consumer complaints and concerns are addressed promptly, fairly and in a manner least burdensome to the consumer.

Copies of complaints and related correspondence must be maintained in accordance with state and federal regulations and laws.