Which act requires lenders to inform applicants about the outcome of their mortgage application?

The Equal Credit Opportunity Act (ECOA) is the act that mandates lenders to inform applicants about the outcome of their mortgage applications. Under ECOA, lenders must not only provide applicants with a notice of the action taken on their applications—whether approved, denied, or if further information is needed—but they also have obligations to ensure that loan decisions are made without discrimination based on race, color, national origin, sex, marital status, age, or reliance on public assistance.

This requirement helps promote transparency in the lending process and ensures that consumers are fully aware of the status of their applications, which is essential for maintaining fair lending practices. By informing applicants of the decisions made, lenders also allow individuals the opportunity to address and rectify any issues that may have led to a denial, fostering a more equitable lending environment.

The other acts mentioned focus on different aspects of housing and lending practices. The Fair Housing Act addresses discrimination in housing, the Truth in Lending Act (TILA) requires clear disclosure of credit terms, and the Home Mortgage Disclosure Act (HMDA) focuses on collecting and reporting data about mortgage lending to ensure compliance with fair lending laws. While all these acts contribute to a fair and transparent mortgage process, it is the ECOA that specifically requires lenders