Despite home ownership levels in the United States being at all-time highs, the outlook for minorities is not as rosy. Mortgage lending institutions still sometimes employ discriminatory practices towards minorities in obtaining a home. Studies show that minorities have a much more difficult time than whites in obtaining mortgage financing and, when successful, receive smaller loan amounts and inferior provisions.
Mortgage discrimination is the unequal treatment of people in obtaining a mortgage without regard to legal rights or ability.
The federal laws that protect you from being discriminated against when you apply for a mortgage are the Fair Housing Act (FHA) and the Equal Credit Opportunity Act (ECOA).
The FHA prohibits discrimination in residential real-estate transactions based on national origin, race, sex, religion, handicaps, and familial status.
The ECOA prohibits discrimination in credit transactions based on national origin, race, sex, age, religion, marital status, and incomes from public assistance programs.
Not all applicants for a mortgage will qualify for one, but there are steps you can take to improve your chances, including:
- Making sure to include all information important to and supporting your application, including any evidence of stable employment in an occupational field or company
- Procuring a copy of your credit report as sometimes it may be inaccurate
- Writing a letter to the lender explaining any past credit issues that may have been caused by unique circumstances
If you suspect that you have been a victim of mortgage discrimination you should:
- Speak with a local fair housing organization
- Report violations to a government agency
- Ask the lender to reconsider your application
If all else fails, you may want to consult an attorney about filing a claim under the ECOA or FHA.
Pursing a mortgage discrimination claim against a mortgage lending institution is complicated and stressful. An experienced real property lawyer can help you with the filing deadlines specific to your claim and preserve any legal remedies you may have. A real property attorney can also help you investigate and pursue any legal remedies, which may include punitive damages, lawyer's fees and court costs in addition to actual damages.