Equal credit opportunity act (ECOA)
Automated underwriting
Procedures can shorten loan approval times. Reduces lenders time on approval process. Strengthens buyers offer to purchase by including proof of loan approval.
Equal credit opportunity act (ECOA)
Prohibits discrimination in the lending process based on the credit applicants race, color, religion, national origin, sex, marital status, age, or receipt of public assistance.The agency that enforces ECOA depends on the type of financial institution. ECOA is enforced by the federal trade commission (FTC )and the department of justice as well as other agencies.Credit applications be considered only on the basis of income, stability of the source of that income, net worth( total assets and liabilities), and credit rating. The federal fair credit reporting act (FCRA )requires Lenders and creditors to inform rejected credit applicants, in writing within 30 days, why credit was denied or terminated. ECOA also requires that a borrower is entitled to a copy of the appraisal if the borrower paid for the appraisal.
Computerized loan origination (CLO)
An electronic network for handling loan applications that provide lists of mortgage lenders, rates, and terms. Real estate agent may assist buyer in selection of lender and applying for loan on screen. Broker may earn fees up to one half point of loan amount, borrower must pay fees.
Real estate settlement procedures act (RESPA)
Applies to any residential real estate transaction involving a new first mortgage loan. Designed to ensure that the buyer and the seller are both fully informed of all costs related to closing the transaction.
Community reinvestment act of 1977 (CRA)
Financial institutions are expected to meet the deposit and credit needs of their communities for low income and moderate income housing and participate in development and rehabilitation projects and Loan programs. LAw requires statement by regulated financial institutions; defining geographic boundaries of community Identifying type of community reinvestment credit offered Including comments from the public about lender's performance in meeting community needs