The ECOA - Equal Credit Opportunity Act - forbids lenders from considering race, color, religion, national origin, sex, marital status, or age when a person applies for a loan. They can’t even consider whether or not you receive public assistance. This offers greater opportunities for women who wish to take out a loan for purchasing real estate.
Married women often find themselves in situations where they do not have credit because major purchases are made in their husband’s name. While your creditworthiness may be considered for a loan, the fact that you are a woman without credit history may not.
Single women often have other issues related to credit, but unless there is a real compelling reason to deny you a loan based on your creditworthiness, the fact that you are a single woman cannot be used against you either. Nor can your marital status or gender be used to increase the terms of you credit. A loan audit can reveal such instances if they exist in your loan and can save you from foreclosure if there is evidence of such dealing with your lender. Consult an attorney before you do anything else and request a loan audit.
It is important to understand your rights according to the Equal Credit Opportunity Act (ECOA). When the law says “adverse action” it means:
(6) For purposes of this subsection, the term “adverse action” means a denial or revocation of credit, a change in the terms of an existing credit arrangement, or a refusal to grant credit in substantially the amount or on substantially the terms requested. Such term does not include a refusal to extend additional credit under an existing credit arrangement where the applicant is delinquent or otherwise in default, or where such additional credit would exceed a previously established credit limit.
That’s straight out of the Equal Credit Opportunity Act itself.
In other words, a lending institution cannot do any of these three things:
- Deny or revoke your credit
- Change the terms of existing credit
- Or refuse to grant credit on the terms you’ve requested or for the amount that you requested
based on race, skin color, religion, or another protected class under the ECOA law. However, if you are delinquent on a loan and you are refused credit for a certain amount or for certain terms, denied credit, or experience another adverse action due to your delinquency, it doesn’t matter what class or category of person you are. The lender does not have to approve your loan application.
Therefore, it is important for you, if you are challenging a loan request denial or other adverse action under ECOA, you need to make sure that you follow the terms of your loan or you may lose your case.
If you think your lender may be in violation of your loan agreement you should seek a qualified loan auditor today.
One of the most misunderstood aspects of real estate law is ECOA - Equal Credit Opportunity Act.
A lender is in violation of ECOA if any of the following is true:
- A loan was refused on the basis of race, color, religion, national origin, sex, marital status, or age
- A loan was refused because a part of the applicant’s income was derived from public assistance
- A loan was refused due to an applicant exercising a right in good faith under the Consumer Credit Protection Act
Of course, you have to understand that just because a loan was refused it doesn’t mean there is discrimination. If an applicant can’t pay for a loan then he or she will likely not win an ECOA case.
But, in certain situations, it’s OK for a creditor to inquire about marital status or age. Simply asking for this information does not constitute discrimination. But there has to be a real reason for asking. If you think that you may have been discriminated against, you can ask your loan auditor for a document review. The details will be in writing.