West Virginia Mortgage Law Practice Test

Which federal law outlines requirements that John must follow when notifying the Barkers of action taken on their mortgage loan application?

1. Equal Credit Opportunity Act

2. Fair Credit Reporting Act

3. Gramm-Leach-Bliley Act

4. Truth in Lending Act

The correct answer is: Equal Credit Opportunity Act

The correct answer is the Equal Credit Opportunity Act. This federal law prohibits discrimination in any aspect of a credit transaction. When John notifies the Barkers of action taken on their mortgage loan application, he must comply with the requirements laid out in this act, which includes providing timely notifications regarding the status of their application and ensuring that the decision is made without discrimination based on race, color, religion, national origin, sex, marital status, age, or any other protected status. In contrast, the other options serve different purposes. The Fair Credit Reporting Act mainly regulates the use of consumer credit information and ensures that individuals have access to their credit reports, while the Gramm-Leach-Bliley Act focuses on the protection of consumers' personal financial information in the financial services sector. The Truth in Lending Act primarily aims to promote informed use of consumer credit by requiring disclosures about its terms and costs, but it does not specifically address discrimination or the notification processes related to mortgage applications in the same way the Equal Credit Opportunity Act does.