Federal mortgage regulations protect consumers by setting up a framework of guidelines for loan officers. A loan officer is responsible for making sure buyers understand the terms of their loan as well as any their rights under any applicable federal mortgage regulations. Professional associations and trade publications can assist loan officers in their efforts to comply with federal mortgage regulations.

Types of Federal Mortgage Regulations

The Equal Credit Opportunity Act makes it illegal for creditors to discriminate against prospective lenders on the basis of race, color, sex, martial status, religion, national origin, age, or participation in public assistance programs. Loan officers must not make any oral or written statement based on these characteristics that would discourage a client from pursuing a loan application. Collecting information about these protected characteristics is permitted only when the information is used for a legitimate purpose. For example, loan officers may ask applicants about their marital status if they reside in California or another community property state.

The Home Mortgage Disclosure Act allows regulatory agencies the authority to review loan records to determine if a loan officer has been engaging in discriminatory lending practices. The Home Mortgage Disclosure Act covers home loans for residential dwellings, home improvement loans, and the refinancing of any loan previously covered under this regulation. Information obtained under the Home Mortgage Disclosure Act is made available to the public to help home buyers determine if they have been treated unfairly during the loan application process.

The purpose of the Truth in Lending Act is to promote the informed use of consumer credit. Under this act, loan officers are required to disclose information about the terms and costs of obtaining credit. The Truth in Lending Act also provides consumers with the right of rescission in certain types of real estate lending transactions.