Discrimination in Lending & Credit

Learn about illegal discrimination in Lending & Credit and how you are protected under Massachusetts law.

The Law

In granting loans or engaging in residential real-estate related transactions, it is illegal to discriminate against any person in granting, or not granting, any mortgage loan due to their membership in a protected class. 

Loan, mortgage, or credit providers can use financial eligibility requirements to determine qualifications for borrowers. Denial of credit cannot be based on a person’s race, color, religious creed, national origin, ancestry, sex, age, handicap (disability), sexual orientation, whether the individual has a child, retaliation, public assistance, and gender identity. 

Borrowers should be aware of the practice of Predatory Lending.

Predatory lenders profit from unfair and unlawful loans which often promise low interest rates, lower payments, and cash payments to borrowers.

Signs of Predatory Lending:

  • If a lender contacts you first, unsolicited.
  • If a lender discourages you from seeking other options and rushes you through the process of obtaining the loan.
  • If a lender uses “bait and switch” tactics, where the broker begins by offering a low interest rate and then comes back with a higher rate.
  • Loans with balloon payments, which involve a large payment due at the end of the contract.
  • You are offered a sub-prime loan. This is a loan aimed at people with credit problems. Often, such loans carry high variable interest rates.
  • Last minute changes: Terms that are unexpectedly changed at the time of closing.
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