No, ECOA isn’t a company that makes aluminum foil. It stands for the Equal Credit Opportunity Act. And this act protects even octo-moms from certain practices that lenders used to routinely be able to engage in.
ECOA prohibits lenders from any of the following:
1. Treating borrowers or prospective borrowers in any way (including but not limited to advertising to phone wait times to treatment in the office) that would discourage a reasonable person from applying there. For example, making statements to a minority applicant that he isn’t likely to be approved before his information has been examined.
2. Asking about alimony, child support, or separate maintenance payments, without telling the applicant that he or she doesn’t need to disclose this income. Applicants generally choose to disclose this kind of income only if it’s needed to qualify for the mortgage.
3. Asking anything about the sex, race, color, religion, or national origin of an applicant (except as provided in 12 CFR 202.13 regarding information for monitoring purposes). Even an innocent, “That’s a nice accent. What country are you from?” can get a lender into hot water with regulators.
4. And the biggie–at least for women–Lenders absolutely can NOT ask about birth control practices, or how many kids you plan to have, or if you plan to continue working once you have kids, etc.So if you are 8 months pregnant and have three kids in tow when you sit down with your loan officer, ECOA does not allow that to become a matter of concern for the lender. If you qualify for the loan, you get the loan.
End of story.
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(8 votes, average: 4.88 out of 5)
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How DID that woman get a house anyway? Public assistance gone wild?!