The Fair Housing Act: Implications for Mortgage Companies

Overview of the Fair Housing Act

The Fair Housing Act is a crucial piece of legislation in the United States that seeks to eliminate discrimination in housing-related activities, including mortgage lending. Compliance with this law is mandatory for all mortgage companies to ensure fairness and equality in their practices.

Key Prohibitions under the Act

The Act makes it illegal for mortgage companies to engage in discriminatory practices based on race, color, religion, sex, handicap, familial status, or national origin. This includes:

• Denying a mortgage loan or providing different loan terms based on these protected characteristics.
• Discriminating in appraising property.
• Setting different terms or conditions for purchasing a loan.

Ensuring Compliance

Mortgage companies must implement measures to comply with the Fair Housing Act:

• Conduct training for employees on fair lending practices and the importance of the Act.
• Regularly review and monitor lending practices for compliance.
• Ensure marketing and outreach efforts are non-discriminatory and inclusive.

Benefits of Adhering to the Act

Compliance with the Fair Housing Act not only avoids legal repercussions but also establishes a company as a trustworthy and ethical entity in the market. It fosters a positive public image and contributes to the overall health and stability of the housing market.