Understanding Housing Discrimination Law in Grand Rapids

While most people in the housing industry will treat you fairly, discrimination still occurs.  You don’t hear about many cases in Grand Rapids, but you should always be aware of your rights.  The better armed you are with knowledge, the more you can protect yourself from these illegal and immoral practices.

So what does the law say, and how can you protect yourself?  While we are not attorneys, and this shouldn’t be considered legal advice, here are a few basics to get you started.

Equal Credit Opportunity Act

Two federal laws are written to protect you against discrimination in the housing market in Grand Rapids.  The first is the Equal Credit Opportunity Act (ECOA).  This law forbids credit discrimination on the basis of race, color, religion, national origin, sex, marital status, age, or whether you receive income from public assistance.

This is very important when applying for any kind of financing.  Potential lenders in Grand Rapids may ask you for most of this information in certain situations, but they can NEVER use it to determine whether or not you get credit, or your loan terms.

This rule applies to everyone who participates in the credit decision.  Realtors, brokers, mortgage officers, and more.  Everyone must comply with the rules.

Fair Housing Act (FHA)

The Fair Housing Act forbids discrimination based on race, color, religion, sex, national origin, handicaps, or familial status.  “Familial Status” covers things such as whether or not you are pregnant, married, or have children.

This law covers all aspects of residential real estate transactions.  It applies whether you’re looking for a loan to buy or improve your home, renting an apartment, or getting an appraisal, just to name a few.

So what isn’t allowed?

To clarify, let’s share some examples about what different professionals CANNOT do.  First, real estate pros are not allowed to discourage you from applying for a mortgage, or reject you for any of the reasons mentioned above.

They cannot charge you higher interest rates on loans, add extra fees, or request a larger down payment based on protected factors.

They can’t discourage you from buying a home in a particular neighborhood because of the area’s racial demographics, or ask about your plans for having children.  They are allowed to ask about family expenses, but only as it relates to your ability to repay the loan.

They also cannot require a co-signer if you meet the lender’s requirements.

What do you do if you suspect discrimination?

First, review your documentation clearly.  There may be a legitimate reason for being denied credit or housing, such as a low FICO score, a low (but accurate) home appraisal, or short length of employment.  If your application is denied, the lender must either give you specific reasons or tell you that you have the right to ask.

You are allowed to see a copy of your appraisal, and you can ask why you were offered less favorable terms than you applied for.  You can review a copy of your credit report, and ask about the situation.

If you review the relevant information, and think you’ve been discriminated against, take action.  You can start by complaining to the lender, and see if they will reconsider based on the facts.  You can consult an attorney or free legal aid, and consider suing the lender in federal district court.

You can also report any potential violations to the appropriate government agency.  For violations of the Equal Credit Opportunity Act, report your claim to the Consumer Financial Protection Bureau, either at www.consumerfinance.gov or (855) 411-2372.

For Fair Housing Act Violations, contact the US Department of Housing and Urban Development at www.hud.gov/complaints or 1 (800) 669-9777.

We sincerely hope you never experience housing discrimination in Grand Rapids, or anywhere.  However, by knowing your rights, you will be better prepared to take action when needed.