Fair Housing
Under the Fair Housing Act, a Montana lender who requires a higher down payment from minority applicants compared to similarly qualified non-minority applicants is engaging in:
ALegal risk-based lending
BDiscriminatory lending (disparate treatment) in violation of the Fair Housing Act and ECOA✓ Correct
CAn acceptable underwriting adjustment
DA violation of RESPA only
Explanation
Requiring higher down payments from minority applicants based on race or national origin is disparate treatment—treating similarly qualified applicants differently based on a protected characteristic—violating both the Fair Housing Act and ECOA.
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Key Terms to Know
Fair Housing Act
Federal law prohibiting discrimination in the sale, rental, or financing of housing based on race, color, national origin, religion, sex, disability, and familial status.
SteeringAn illegal practice where a real estate agent directs buyers toward or away from certain neighborhoods based on the buyer's race, religion, national origin, or other protected characteristics.
RedliningAn illegal practice where lenders or insurers deny services or charge higher rates in certain neighborhoods based on the racial or ethnic composition of those areas.
Fiduciary DutyThe highest legal duty an agent owes to a principal — requiring the agent to act in the principal's best interest above all others.
Math Concepts
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