Finance
A Washington lender denies an application from a qualified applicant who is 75 years old, citing concerns about the length of the loan term relative to the applicant's age. This denial is most likely a violation of:
AWashington's Elder Financial Exploitation laws
BThe Equal Credit Opportunity Act (ECOA), which prohibits age discrimination in credit decisions✓ Correct
CThe Fair Housing Act
DTRID disclosure requirements
Explanation
The Equal Credit Opportunity Act (ECOA) prohibits discrimination in lending based on age (for applicants old enough to enter contracts). Denying a loan to a qualified applicant solely because of their age is illegal age discrimination under 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.
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.
Pre-ApprovalA lender's conditional commitment to loan a specific amount to a borrower, based on verified income, credit, and assets.
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.
State-Specific Concepts
Disclosure Requirements
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