January 19, 2022

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FHA Rules and Transparency In Lending

From time to time, we publish information about the FHA and HUD efforts to combat discrimination in housing. We don’t have new cases to report at this time, but some borrowers often wonder how FHA loan rules are designed to help prevent discrimination in a procedural way.

It’s one thing to rely on existing or newly passed federal laws that forbid discriminatory practices in lending, housing, or home sales. It’s quite another to create rules and regulations that specifically work to prevent such illegal practices in the procedures of lending money.

In some cases these anti-discrimination rules are more or less labeled and described as such; in others there are layers of subtlety involved, but it’s easy to see how they could be interpreted as an anti-bias requirement.

A good example of the latter can be found in Chapter One, Section A of the rulebook for FHA lenders, HUD 4155.1. Under the heading, “Required Notifications for Rejected Borrowers”, you’ll find the following:

“When a loan is rejected, the lender must immediately complete

Joe Wallace - Staff Writer

By Joe Wallace

September 21, 2012

Joe Wallace has been specializing in military and personal finance topics since 1995. His work has appeared on Air Force Television News, The Pentagon Channel, ABC and a variety of print and online publications. He is a 13-year Air Force veteran and a member of the Air Force Public Affairs Alumni Association. He was Managing editor for www.valoans.com for (8) years and is currently the Associate Editor for FHANewsblog.com.

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About FHANewsBlog.com
FHANewsBlog.com was launched in 2010 by seasoned mortgage professionals wanting to educate homebuyers about the guidelines for FHA insured mortgage loans. Popular FHA topics include credit requirements, FHA loan limits, mortgage insurance premiums, closing costs and many more. The authors have written thousands of blogs specific to FHA mortgages and the site has substantially increased readership over the years and has become known for its “FHA News and Views”.

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