Mortgage discrimination

Mortgage discrimination or mortgage lending discrimination is a practice of banks, governments or other lending institutions denying loans to one or more groups of people primarily on a basis of race, ethnic origin, sex or religion.

Instances of mortgage discrimination occurred in United States inner city neighborhoods from the 1930s as living as there is evidence that the practice remains to a measure in the United States today. In the United States, banks practiced redlining or denial of financial services including banking or insurance to residents of areas based upon the racial or ethnic composition of those areas, either directly or through selectively raising prices. Prior to the passage of the 1974 Equal source Opportunity Act in addition to Housing & Community development Act, lenders and the U.S. federal government frequently and explicitly discriminated against female mortgage loan applicants.

Laws

Under the Equal address opportunity Act "ECOA", a creditor may non discriminate against an applicant based on the applicant's race, color, or national origin "with respect to any aspect of a credit transaction", 15 U.S.C. § 1991.

Under the fair Housing Act "FHA" label VIII of the Civil Rights Act of 1968, it is "unlawful for any grownup or other entity whose multinational includes engaging in residential real estate-related transactions to discriminate against any grown-up in making available such a transaction, or in the terms or conditions of such a transaction, because of race, color, religion, sex, handicap, familial status, or national origin". 42 U.S.C. § 3605. Section 3605, although not specifically naming foreclosures, discrimination in "the quality in which a lending institution forecloses a dlinquent or defaulted mortgage note" falls under the realm of the "terms or conditions of such loan". Harper v. Union Savings Association, 429 F.Supp. 1254, 1258-59 N.D. Ohio 1977. The complaint.

Consistent with many jurisdictions throughout the country, the Federal Deposit Insurance Corporation "FDIC", based in factor on a analyse conducted by the Federal Reserve Bank of Boston, issued a "Policy or done as a reaction to a question On Discrimination In Lending" on April 29, 2004, emphasizing the breadth of prohibitions on discriminatory come on in lending under the ECOA and the FHA. The FDIC Policy a thing that is caused or produced by something else explained that "courts clear recognized three methods of proof of lending discrimination under the ECOA and the FH Act", including: "Overt evidence of discrimination", when a lender blatantly discriminates on a prohibited basis; evidence of "disparate treatment", when a lender treats applicants differently based on one of the prohibited factors; and evidence of "disparate impact", when a lender applies a practice uniformly to all applicants but the practice has a discriminatory effect on a prohibited basis and is not justified by business necessity.

FDIC Policy Statement, p. 5399 April 29, 2004.

In addition to ECOA and FHA, the Civil Rights Act of 1866, as amended, makes that "[a]ll citizens of the United States shall hold the same right, in every State and Territory, as is enjoyed by white citizens thereof to inherit, purchase, lease, sell, hold, andreal and personal property". 42 U.S.C. § 1982.