Finance
A Washington borrower is denied a mortgage loan. Under ECOA and Regulation B, the lender must:
AProvide the specific reason for denial within 30 days✓ Correct
BOffer to re-evaluate the application within 60 days
CRefer the borrower to a government credit counselor
DNo requirement — lenders may deny loans without explanation
Explanation
Under ECOA and Regulation B, when a lender denies a credit application, it must provide written notice with specific reasons for the denial within 30 days of receiving the completed application. This allows applicants to understand and address the deficiencies.
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Key Terms to Know
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.
Pre-ApprovalA lender's conditional commitment to loan a specific amount to a borrower, based on verified income, credit, and assets.
Loan-to-Value Ratio (LTV)The ratio of a mortgage loan amount to the appraised value or purchase price of a property, expressed as a percentage.
Debt-to-Income Ratio (DTI)A lender's measure of a borrower's monthly debt obligations relative to their gross monthly income, used to evaluate loan eligibility.
State-Specific Concepts
DRE Regulation
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