ABSTRACT
This chapter addresses the potential concerns by recommending certain investigation or review protocols for law enforcement agencies and regulators who are committed to eliminating disparate treatment discrimination and practices that have a discriminatory effect in the mortgage lending industry. It examines two areas of mortgage lending practices by financial institutions to evaluate whether a pattern of discrimination exists. First, all information related to applicant flow should be reviewed; and second, the postapplication mortgage approval process should be investigated. In investigating or reviewing the mortgage lending practices of a financial institution, a similar process of file review, analysis, and data entry must occur. Adopting the approach would significantly increase the effective review of financial institutions’ mortgage lending practices. A significantly less expensive and less resource-intensive review of a financial institution’s mortgage lending practice, similar to that used in employment discrimination cases, is a reliable alternative to either the Department of Justice or the Federal Reserve models.
