FLAGSTAR BANK FAIR LENDING COMMENTARY  Print   Close

Flagstar Bank is committed to serving all borrowers equally, without regard to an individual's race, color, national origin, religion, sex, familial status or handicap. As such, it is Flagstar's policy to issue all conditional commitments (to purchase a loan) without regard to a borrower's race, color, national origin, religion, sex, familial status or handicap.

With the goal of Fair Lending in mind, it is also our policy to promote Fair Lending practices to our entire wholesale customer base. Though Flagstar Bank does not dictate how a wholesale customer prices a loan or charges fees to a borrower, we must emphasize the critical nature of supporting sound Fair Lending practices.

Flagstar Bank urges all of our wholesale customers to develop fair lending procedures that provide controls to determine and guard against originating loans that are in any way biased based on a borrower's race, color, national origin, religion, sex, familial status or handicap.

Bias is not restricted to merely whether or not a borrower receives a loan. Bias may also be demonstrated by analyzing rates and fees charged to borrowers of a specific group. In an effort to ensure that our wholesale customer base is compliant with the Fair Housing Act, Flagstar performs regular post-closing reviews to determine if any borrower treatment or pricing disparity exists for borrowers in a specific group (as outlined by the Fair Housing Act).

By reviewing the rates/fees charged on closed loans purchased from our wholesale customer base, our goal is to verify whether any disparities exist. If Flagstar determines that disparities do exist for a specific wholesale customer, we may exercise our right to cease conducting business with a specific wholesale customer.

We would also like to emphasize that Fair lending laws do not focus on a lender's "intent." We believe that all wholesale customers "intend" to provide borrowers with loans. Rather than focus on intent, compliance with the Fair Housing Act requires our wholesale customer base to look at their loans and analyze whether all borrower groups are priced/charged and treated equitably.

Though Flagstar does analyze rates and fees charged by our wholesale customer base, we would like to emphasize that this practice will not protect you from being pulled into litigation for non compliance with the Fair Housing Act. The best way to protect your business is to adopt sound and comprehensive fair lending procedures. By doing so, we work together in our common goal of Fair Lending for all borrowers.

For your convenience, we have provided HUD's language on Fair Housing as it pertains to our industry:

EQUAL HOUSING OPPORTUNITY - FAIR HOUSING ACT

The Fair Housing Act prohibits discrimination in housing on the basis of: race, color, national origin, religion, sex, familial status or handicap (disability).

In Regard to Mortgage Lending:

No one may take any of the following actions based on race, color, national origin, religion, sex, familial status or handicap (disability):

  • Refuse to make a mortgage loan
  • Refuse to provide information regarding loans
  • Impose different terms or conditions on a loan, such as different interest rates, points, or fees
  • Discriminate in appraising property
  • Refuse to purchase a loan or Set different terms or conditions for purchasing a loan

Learn more about the Fair Housing Act at HUD's website: http://www.hud.gov/fhe/fheact.html

Predatory Lending Information from the Office of Thrift Supervision

We appreciate your attention to the practice of Fair Lending and we thank you for your continued support.

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