--- title: What is Federal Fair Mortgage Lending? description: With mortgage broker insurance, there is protection against lending discrimination claims. Find out which laws govern mortgage services and discrimination. image: https://blog.axisins.com/hubfs/Mortgage%20lending.jpg --- [![AxisInsurance](https://blog.axisins.com/hubfs/files_2023/logo.png)](https://www.axisins.com/) Connect with us Call us Today [(201) 847-9175](tel:2018479175) [(877) 787-5258](tel:8777875258) - - About Axis - [Our Approach](https://www.axisins.com/about-us/) - [Our Team](https://www.axisins.com/our-team/) - [Testimonials](https://www.axisins.com/testimonials/) - [Case Studies](https://www.axisins.com/case-studies/) - [News & Events](https://blog.axisins.com/tag/news-and-events) - [Careers](https://www.axisins.com/job-opportunities/) - Product Lines - [Overview](https://www.axisins.com/products/) - [On-line Quoting](https://www.axisins.com/products/on-line-quoting/) - [Surety Bonds](https://www.axisins.com/products/surety-bonds/) - [Cyber Liability/Privacy & Network Security](https://www.axisins.com/products/cyber-liability-privacy-network-security/) - [Overview](https://www.axisins.com/products/cyber-liability-privacy-network-security/) - 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[Subscribe To Our Blog](https://share.hsforms.com/18qZLml0MTSqtYWBFqQFAGA35dv4?__hstc=172306556.605fbd816f522e1de3e9428cb969d5b4.1580877711545.1580973215492.1580978435349.10&__hssc=172306556.3.1580978435349&__hsfp=1035641285) # What is Federal Fair Mortgage Lending? June 24, 2021 ![](https://blog.axisins.com/hubfs/Mortgage%20lending.jpg) Axis There are many laws in place to protect individuals of all ages and backgrounds from experiencing discrimination in various transactions. The Equal Credit Opportunity Acts expressly forbids discrimination throughout any portion of credit transactions under the watchful eye of the Consumer Financial Protection Bureau. The Fair Housing Act makes discrimination during a residential real estate transaction unlawful, though this is overseen by the Department of Housing and Urban Development. These are all inclusions in the fair lending laws and regulations established by the federal government. ## Federal Support for Real Estate Purchases With the ECOA and FHA, the [federal government ensures that lending and housing opportunities are available](https://www.occ.treas.gov/topics/consumers-and-communities/consumer-protection/fair-lending/index-fair-lending.html) to all individuals. Lenders are not able to make application denials on account of marital status, color, race, sex, origin, or disability when a residential mortgage loan is requested. Lenders can make denials based on insufficient financial support for the transaction. However, claims of disparate treatment can occur when an applicant falls into a lending category where the lender must use more discretion to make a final judgment. ### Potential Areas for Discrimination Claims Lenders are allowed to have a standard of application and approval requirements, yet not all situations are as black and white as the standards set forth. There are cases where an applicant may not be completely well-qualified, yet they aren’t totally unqualified either. These situations require a lender to exert more discretion, but a claim could arise that the lender or representing broker erred by not fully assisting an applicant throughout the process. While lenders are not required to provide credit counseling or advice on solutions for improving the chance of future approval, providing advice for one applicant and not another can lead to claims of disparate treatment. In these situations, the lender could be subject to a discrimination lawsuit. Compliance with federal fair lending laws is just a part of the problem. The claimant can sue for damages or losses incurred because of the discriminatory treatment. [Mortgage broker insurance](https://www.axisins.com/products/management-liability-insurance-do/) can help manage these liabilities. ### Liability Protection for Lenders Discrimination could be either willful or accidental, but the resulting consequences do not change. Lawsuits can be brought against the lender and those who are responsible for constructing the institution's policies or for carrying them out. Legal fees, reputation management, and court-ordered settlements or awards can destroy a company's finances. Insurance will address these costs, with a special program tailored to the needs of the business being the best option for complete liability protection. ### Awareness and Training Needed To help reduce the exposure to a discrimination claim, whether through negligence or not, thorough training and continual oversight should be conducted with those granted the authority to approve loans. A simple mistake could end up costing the lender thousands and risk federal involvement for lack of regulatory compliance. #### 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. 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