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Equal Credit Opportunity Act | Real Estate Exam Prep - YouTube
Channel: The Real Estate Classroom
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in this video we're going to discuss the
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equal credit opportunity
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act and i guarantee you you're going to
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have to know it for your real estate
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licensing exam so
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let's get started
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hey everybody my name is paul vachesky
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and welcome to the real estate classroom
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youtube channel hey real quick before we
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get started give this video a thumbs up
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hit that red subscribe button click on
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the notification bell
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and don't forget there is a comment
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section so if you have a question or
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you'd like to leave a comment please do
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so
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and i promise to respond alright in this
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video the equal credit opportunity
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act now this particular law is a federal
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regulation that's part of those
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real estate specific federal laws that
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you have to know not only for the real
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estate exam but it is something that
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really does impact us in the real real
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estate community
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and there's about four or five of those
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laws like the federal credit reporting
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act and
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and the real estate settlement
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procedures act and we're going to talk
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about those
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in different videos specifically but
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today it is the equal credit opportunity
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act so let's take a look at what this
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law specifically does
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now the first thing that it does it
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provides restrictions and prohibitions
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on lenders that are providing loans
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for residential property notice it's
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residential property and not
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car loans commercial loans or credit
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cards now
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it does impact those particular
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communities
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as well however for the purposes that we
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need this video for your
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licensing exam preparation we're all
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going to talk about the the part that
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that deals with the residential loans
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all right
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and so the law has certain prohibitions
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depending on someone who's in a
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protected class
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and most of you have probably had some
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type of fair housing training already
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from your pre-licensing classes or
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through your studies
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and all this law does is say there's
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certain prohibitive conduct
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based on someone who's a member of a
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these protected classes now
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the protected classes that fall under
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the equal credit opportunity
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act are sex marital status race color
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religion national origin
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and the receipt of public assistance
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that particular provision was included
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to protect those that receive income
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from social security
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social security disability welfare those
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type of things
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all right so these particular protected
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classes are specifically and narrowly
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for this law only some of the other
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federal laws have added
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additional protected classes so what you
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need to know for the
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licensing exam is the equal credit
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opportunity act
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here are the protected classes that are
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protected
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under this law now what's the
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prohibitive conduct
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that is someone who's a member of one of
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those protected classes under this law
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a lender providing a loan for
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residential property cannot
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fix an amount meaning they couldn't say
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african americans were only going to
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loan you a maximum of three hundred
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thousand dollars everybody else we're
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going to go to a million
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they couldn't have differing interest
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rates they couldn't have differing
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terms and conditions so they couldn't
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say
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latinos we're only going to give you a
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20-year mortgage and everybody else can
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get 30 years
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right so that's what we mean by uh
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protected classes and the prohibitive
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conduct now
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don't confuse that with someone who
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legitimately has
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a subpar financial trustworthiness all
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right so let me explain
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many lenders base their terms and
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conditions
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on someone's credit score or what we
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call the fico score
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and it's very common for example the
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lender can say listen we're going to
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give anyone who has a 720 fico score
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a three percent loan for example anybody
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that's 680 to 719
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fico score they're going to be 3.25
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anybody below 679 we're not going to
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give a loan to
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notice it's based on their the
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individual's fico score and it's across
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the board
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it's not it's not it's not focusing or
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targeting one particular
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particular class of people it's across
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the board so whether you're
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african-american latino whether you're a
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male
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female whether you're catholic uh
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whether you're you're receiving social
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security it doesn't matter we're making
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our determination whether we're gonna
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loan to you and what the terms of those
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uh terms and conditions for that loan is
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gonna be based on
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your financial trustworthiness and
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that's a key distinction
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all right so keep that in mind the cr
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the equal credit opportunity act
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prohibits
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these four uh these four prohibitions
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based on
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these protected classes and you just
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simply have to know it for your real
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estate licensing exam one final thing
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notice on the bottom of your screen it
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has a key date of 1974.
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one of the things that the real estate
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licensing exam loves to ask about is
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when particular laws were
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passed into existence and in this case
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you need to know that the equal credit
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opportunity act uh was was passed in
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1974 because there's a high probability
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that actual
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question is going to be on your exam all
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right that's all i got for this video
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thanks for hanging out i'll see you
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in the next video
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