Loan Officer Consumer Protection and Fair Lending Flashcards
6 cards from real Loan Officer Exam practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 Loan Officer Consumer Protection and Fair Lending flashcards as text
What does HMDA stand for in the context of mortgage lending?
Answer: Home Mortgage Disclosure Act
HMDA stands for the Home Mortgage Disclosure Act, which requires lenders to collect and report data on mortgage loan applications and originations.
Under the Fair Housing Act, which of the following is NOT a protected class?
Answer: Occupation
Occupation is not a protected class under the Fair Housing Act; protected classes include race, color, national origin, religion, sex, familial status, and disability.
What is 'redlining' in the context of fair lending?
Answer: The illegal practice of denying services to residents of certain areas based on race or ethnicity
Redlining is the illegal discriminatory practice of denying or limiting financial services to people in specific geographic areas based on the racial or ethnic composition of those areas.
Which federal law prohibits discrimination in credit transactions, including mortgage loans, based on race, sex, national origin, and other factors?
Answer: The Equal Credit Opportunity Act (ECOA)
The Equal Credit Opportunity Act (ECOA) prohibits discrimination in all credit transactions, including mortgage lending, based on race, color, religion, national origin, sex, marital status, age, or receipt of public assistance.
What is 'steering' as a fair lending violation?
Answer: Directing borrowers toward loan products less favorable than those they qualify for based on a protected characteristic
Steering is the illegal practice of directing borrowers toward less favorable loan products based on a protected characteristic, even when they qualify for better terms.
Under HMDA, which data point must lenders collect and report regarding loan applicants?
Answer: The applicant's race, ethnicity, and sex
HMDA requires lenders to collect and report demographic data including the applicant's race, ethnicity, and sex to enable regulators to monitor for discriminatory lending patterns.