A borrower with a 720 credit score, 38% DTI, and 20% down payment applies for a conventional loan. The MLO offers this borrower a 30-year fixed rate of 7.5%. A few days later, an identically qualified borrower from a different racial background receives a quote of 6.8% from the same MLO. What federal law is most directly implicated?

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The Fair Housing Act, which prohibits racial discrimination in residential mortgage lending The Fair Housing Act (FHA) explicitly prohibits discrimination in residential real estate transactions, including the terms and conditions of mortgage loans, based on race, color, national origin, religion, sex, familial status, or disability. Offering materially different rates to identically qualified applicants based on race is a textbook disparate treatment violation under the FHA and ECOA. "The Gramm-Leach-Bliley Act, because borrower financi..." (RESPA) governs settlement service fees and kickbacks — not loan pricing discrimination. "RESPA, because the rate difference represents an und..." (TILA) requires accurate APR disclosure but does not govern discriminatory pricing between borrowers. "TILA, because the APR was not accurately disclosed" (GLB Act) governs privacy of financial information — not lending discrimination.

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