The housing financial discrimination act came into law back in 1977. The act states that all residential listings up for sale must grant the same availability via loan applications to all credit and background approved homebuyers regardless of race, ethnicity, gender, sexual orientation, marital status, etc..
Lenders seeking to give out loans, must do so in accordance with this act. Financing through lenders must be provided to all those eligible and therefore qualified loan applicants.
Furthermore, the demographic statistics of a neighborhood, regardless as to whether or not its a community which consists primarily of residents belonging to a certain race, ethnic background, or any other group, cannot dictate the terms in respect to how a lender chooses to distribute and lend out a home loan.
Why this matters?
If a lender where to deny a loan application solely due to the attribute nature of the neighborhood, this could potentially lead to the area downgrading both in value, quality, and overall reputation. Such a bias would not only violate legality in respect to the law, but could persuade both future and current residents to search elsewhere when loaning is not comfortably provided. The history of the neighborhood could very well be scarred from them on as a result.
Lenders, however, are entitled to refuse and not hand out a loan in certain scenarios. When analyzing the safety and security concerns of a neighborhood, if the lender can justify that a certain neighborhood is deemed unsafe and therefore not worth the business investment, they can do so, for the law does permit some exemptions in respect to not lending under certain circumstances.
Can I Sue?
If a homebuyer feels the need to file a lawsuit, for the applicant having reason to believe their application was revoked and/or turned down as a result of the other party’s suspected discriminatory behavior, they may do so, but prior to filing a suit, they must file a claim with the transportation and housing agency.
