Let’s Be Fair
Impac Mortgage Corp. takes the business of fair lending seriously, and is committed to providing all associates with ongoing fair lending training. In support of this effort, the Compliance Department reminds you of the importance of the Equal Credit Opportunity Act (ECOA) and the Fair Housing Act (FH Act) with respect to mortgage lending.
ECOA prohibits discrimination in any aspect of a credit transaction. The act was established to promote the availability of credit to all creditworthy applicants without regard to:
The Fair Housing Act prohibits discrimination in all aspects of residential real estate-related transactions, including but not limited to:
Under the FH Act, it is unlawful for a lender to discriminate on a prohibited basis in a residential real estate-related transaction based on the ECOA factors listed above including:
As a mortgage lender, Impac may not discriminate based on any of the prohibited factors defined by either ECOA or the FH Act. Discrimination is illegal and is not tolerated by Impac or state and federal regulators. At Impac, associates are responsible for complying with the above acts and all other fair lending laws.
What You Should Know About Discrimination!
Discrimination is lending on the basis of a prohibited factor, i.e., race, sex, marital status, national origin, religion, age, receipt of public assistance or exercising rights under the Consumer Credit Protection Act, and is not tolerated by state and federal regulators. We cannot stress this point enough!
However, did you know there are three (3) types of discrimination? Discrimination can exist in the following forms (1) Over Discrimination; (2) Disparate Treatment; or (3) Disparate Impact.
So what does this really mean?
Overt Discrimination can be a blatant discriminatory practice or policy, or exist if a loan officer/lender expresses a discriminatory preference, but does not act upon it.
Example: If a loan officer/lender tells a customer, “It is our preference not to make loans to Hispanics, but the loan says we cannot discriminate, and we must adhere to the law.”
Disparate Treatment can occur in any part of the credit process and is usually subtle. Disparate treatment happens when a loan officer/lender treats an applicant differently based on one of the aforementioned prohibited factors.
Example: A minority couple inquires about a mortgage loan with a loan officer/lender. The loan officer/lender only provides information about fixed rate lending programs, and does not offer to assist the couple in completing their loan application. The minority couple completed the application, and was turned down by the lender. Conversely, a non-minority couple applies for a mortgage loan with the same loan officer/lender. They were given information on fixed and adjustable rate programs. The loan officer offered to assist the applicant in completing their application and their loan was approved by the lender.
Lastly, Disparate Impact is when a lender applies a practice or policy to all credit applicants equally, but the practice or policy disproportionally and adversely impacts applicant’s ability to obtain credit.
Example: A lender had a policy to offer 2nd TD loans where licensed to do so. Upon evaluation, the lender discovered it was no longer profitable to offer these loans in a particular area that had a high minority population, due to increasing defaults and high foreclosure rates. The lender decided to revise its lending policy, and no longer offered this type of program in the area. The lender could be disproportionately excluding minority applicants that may not default or be foreclosed upon from applying.
Fair Lending Policy Statement
Impac Mortgage is committed to treating all customers fairly and equally. We strive to ensure we do not discriminate in any part of our lending transactions based on the Prohibited Basis: race, color, religion, national origin, sex, marital status, familial status, military status, sexual orientation, age (provided the applicant has the capacity to contract and providing the applicant is of an age meeting the underwriting requirement for the product), disability, receipt of public assistance income, whether a person has exercised any right under the Consumer Protection Act (this includes the Truth in Lending Act), or any other basis prohibited by law. We continually work towards this goal, through training of all employees, and review of policies and procedures, systems, and business strategies.
FAIR LENDING POLICY STATEMENT
The following is the official Policy Statement and is available to all employees: