Finance
Under the Home Mortgage Disclosure Act (HMDA), Connecticut mortgage lenders are required to:
AOffer the same interest rate to all applicants
BReport data about mortgage applications and loans by race, ethnicity, income, and census tract to detect lending discrimination✓ Correct
CApprove all qualified minority applicants
DSubmit loan files to HUD for review
Explanation
HMDA requires covered lenders to collect and publicly disclose data about mortgage applications, approvals, and denials, including demographic information. This data is used to identify patterns of lending discrimination and ensure compliance with fair lending laws.
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Key Terms to Know
Discount Points
Prepaid interest paid to a lender at closing to reduce the mortgage interest rate, with each point equal to 1% of the loan amount.
Private Mortgage Insurance (PMI)Insurance required by lenders on conventional loans with less than 20% down payment, protecting the lender — not the borrower — against default.
AmortizationThe gradual repayment of a loan through scheduled periodic payments that cover both principal and interest.
Adjustable-Rate Mortgage (ARM)A mortgage with an interest rate that changes periodically based on a financial index, usually after an initial fixed-rate period.
Math Concepts
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