Profile picture for bernie2010

Can banks age-discriminate for mortgage loans?

I am 64, due to retire in 1 1/2 years. I have excellent credit (Fifo 850+). Let's assume my monthly payment would be within the 25% range of my income/projected pension. Can the bank discriminate because technically I may not have 30 years of life left?
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May 15 2010 - US
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Answers (23)

Agree with all comments - lender cannot discriminate on age.  Credit eligibility will be approved/denied based solely on your income, available assets and your credit history(assuming you have an eligible property). 

Reverse mortgages, however, are computed based on age and loan amount and eligibility is largely based on age. This is due to the fact that the eligible loan amount is computed based on your age and HUD's estimate of average life expectancy. 
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July 23
Age discrimination is illegal per ECOA.

http://files.consumerfinance.gov/f/201306_cfpb_laws-and-regulations_ecoa-combined-june-2013.pdf


"...the statute makes it unlawful for "any creditor to 
discriminate against any applicant with respect to any aspect of a credit transaction (1) on the 
basis of race, color, religion, national origin, sex or marital status, or age..."
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February 10
Absolutely not!
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February 10
No. If you were 94 and could still qualify income and credit wise, you could still get a 30 year loan
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February 10
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February 10
Lenders cannot discriminate against you.   All loans are determined by the borrowers ability to repay.  Meaning income and assets are always weighed.   Documentation will be based on the most current information within 30 days of closing for the most part, but each lender may vary based on their own requirements.   
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February 10
The protected categories in the Bill of Rights (age is one of them) are protected, so no they can not. I like to say everybody's green is equal.
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February 10
Profile picture for LDL007
I am 66 and I make over one and a half times a year as compared to my loan amount. My credit score is over 830. I have at least another 10 years of tenured, full time employment at the same or even higher pay. I also have assets over 20 times the loan amount. Yet, a very well known bank (where I have all these assets) danced around and gave me a tough time despite all the documentation. My son, who is half my age got a higher loan from the same bank instantly. I sincerely feel that I was age discriminated.
Banks and lending institutions are not going to admit as they might find themselves in violation of laws and policies. You might ask, why didn't I pay cash-I don't have any tax deductions and the same bank suggested that I take a mortgage instead of paying cash!
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February 10
Yes they would.  They would call his employer or your employer and ask if your employment was likely to continue.

How does the lender know that the pension is stable?  Because you said it was?  An awards letter stating the benefit will usually take care of the condition.

Not sure if you've heard but the housing industry has hit a bit of a rough patch.  Foreclosures are up and many of those foreclosures are the result of lax guidelines and alt/ no doc loans.

It might feel like they are beating you up for documentaion but the documentation guidelines have gotten much more stringent over the past 2-3 years.  It has nothing to do with your age.

The statement from September is too old to meet underwriting guidelines they need something dated ususally within 30 days of your application, that statement is 4 months old.  If you call whomever is managing the pension I am sure they can provide you with the documentation you will need. 
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January 09 2012
Profile picture for mommaroo
If my husband wasn't retired would they request proof that his income would remain at least the same for 3 years? Would they request proof that he wouldn't be laid off?
My husband's pension is a lot more secure than many jobs.--Statement comes out every Sept. and includes a COLA of at least 1%. So the last statement was 09/2011 and included a COLA of 2%.

So, yes, I think requesting assurances on a pension and not on wages IS discriminatory.

BTW, we have bought and sold several homes over the years....so this is not our first mortgage.....and we were not asked to furnish this "proof" on our last 2 homes, also purchased after retirement.
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January 09 2012
What's the date on the statement?

How is providing proof that your income is likely to continue discriminating?
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January 09 2012
Profile picture for mommaroo
We've just gotten an approval on a mortgage loan with "conditions". Conditions is they are asking for yet another monthly pension statement, though I've submitted the only one we get, which is the annual statement, and they want PROOF that the pension will continue for at least 3 more years. Our credit is excellent, pension a very secure state pension which has not suffered from the economic climate, and we're putting 20% down.

Seems a bit discriminatory  to me...
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January 09 2012
Profile picture for Pasadenan
And don't forget about all those USDA loans that were discriminating based on race, and the court award for the plaintiffs that congress still has not funded...

Loan Officers on Zillow have even stated for some USDA loans they had to provide photos of the person at their "farm" to prove it was actually for farm-land; when I still think they just wanted evidence of a person's race.

Discrimination happens; and regardless of legislation, you can't prevent it.
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May 17 2010
Profile picture for Pasadenan
"Unless you're 30 years old and would like a reverse mortgage" -

Sue HUD and the Federal Government; they violated their own law.

And if you are under, 18, they won't give you any  mortgage, even if your income is $500k annual and your FICO is 830.

Seriously, how are you going to prove you were denied based on age, when they tell the courts it is because you did not provide sufficient documentation of your income?
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May 17 2010
Only if they want to be the next bank on the "Implode-O-Meter"!
An interesting link to take a quick look at: http://ml-implode.com/
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May 17 2010
Absolutely not - it's against RESPA... Hope this helps!
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May 17 2010
Definitely not. Unless you're 30 years old and would like a reverse mortgage :) But seriously, no.
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May 17 2010
Profile picture for Pasadenan
Though of course the federal law says no, of course they can.  Anyone can discriminate on any bases they want; they just have to make sure they don't disclose that the real reason was illegal.

But a loan officer wants their commission, so of course they will try to push it through, and the Underwriter guidelines has nothing specific about age or health conditions...

But it does have something about expected income and documentable income.  Since you can document your pension and expected cash flow after retirement, you should have no issue.  But if someone that has $200k annual income this year and is 98 years old and has no evidence that they will be employed next year, and has no evidence of self-employment income, and has no pension put aside and only the down payment in the bank accounts, and doesn't qualify for Social Security since they took the pastor exemption, do you really think that someone will give the person a mortgage with only 3.5% down?  It wouldn't be called "age discrimination", it simply will be called insufficient evidence of income.
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May 16 2010
It is highly illegal and unethical for any lender to discriminate against anyone because of their age.

In fact the federal government says so in the Equal Credit Opportunity Act.

If you are denied a loan and you feel it may be because of your age you should call your state's Attorney General and issue a complaint.

Hope this helps!
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May 16 2010
I can assure you that your age will not be considered.  I have never seen anything remotely resembling age discrimation.  Proceed with full confidence.
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May 15 2010
Profile picture for wetdawgs
No.  Only your income is used for consideration.

None of us may have 30 years of life left!   Of course, the remaining mortgage balance is still owed should you succumb after 29 years or 2.

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May 15 2010
Absolutely not....... your pension income will only count though towards qualifying income after you start receiving it.  Discuss your scenario with a local loan officer and get guidance as to loan qualifications based on current financial details.
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May 15 2010
no
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May 15 2010
 
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