Purchasing premises for your business is never easy; it seems as if none of the properties in your budget are in the right location or have enough space.
However, sometimes buying property is unfairly and illegally complicated by factors that you cannot control, such as your race or ethnicity. Here's what you need to know about combatting mortgage discrimination as a business owner.
The Business World Is Trying To Make Progress
In 2008, the housing market crash made many unethical real estate practices visible, including race-based discrimination. While this situation has not been resolved, the private sector is making progress. For example, if a real estate agency wants to purchase mortgage broker insurance, the agency generally must agree to follow federal laws to reduce its liabilities.
Similarly, while errors and omissions insurance helps companies when they're sued over mistakes, it is invalid if the business owner breaks a law. As a result, if a mortgage company knowingly discriminates against your business because of your race, it must cover the court settlement in full.
The Law Is on Your Side
In 1968, Congress passed the Fair Housing Act, which makes it illegal for property owners to refuse a sale on the basis of race, gender, nationality, or religion. While you're not house-hunting, you probably need a mortgage for your premises, and the FHA prohibits banks from withholding loans because of the same factors.
Another relevant law that protects your business is the Equal Credit Opportunity Act. Passed in 1972, this law prevents banks from disqualifying you from a mortgage or other credit opportunities based on factors unrelated to your financial history. If your bank or credit union is covered by mortgage broker insurance, it must adhere to its credit policies or face lawsuits from the Equal Opportunity Employment Commission.
Your Options Are Open
When you're unable to buy your premises because your mortgage application was illegally denied, talk to your lender about your rights under the FHA and ECOA. If your lender will not reverse its decision or make reparations for its discrimination, take up the matter with an attorney or the state attorney general. Another option is to register a formal complaint with the Consumer Financial Protection Bureau.
For most of these avenues, you have up to a year to press charges or file a complaint against a real estate company that has mortgage broker insurance. However, the best method is to speak out as soon as you begin to experience mortgage discrimination.
Some business owners are reluctant to work with the federal government on issues of racial discrimination. If this describes you, talk to your attorney and investors about the best plan for ensuring that your access to funding is legal and fair.
About Axis Insurance
At Axis Insurance Services, we aim to help our customers identify their exposures and protect themselves. Founded in 1999, we offer insurance programs to a wide variety of professionals and industries including attorneys, real estate, healthcare, architects, and more, and also have a wholesale division. We pride ourselves on offering flexible insurance coverage tailored specifically to each customer’s needs. To learn more about our solutions, contact us at (877) 787-5258 to speak with one of our professionals.