Impac is Committed to Fair Lending

Let’s Be Fair

Impac Mortgage Corp. takes the business of fair lending seriously, and is committed to providing all associates with ongoing fair lending training. In support of this effort, the Compliance Department reminds you of the importance of the Equal Credit Opportunity Act (ECOA) and the Fair Housing Act (FH Act) with respect to mortgage lending.

ECOA prohibits discrimination in any aspect of a credit transaction. The act was established to promote the availability of credit to all creditworthy applicants without regard to:

• Age (provided applicant has the capacity to enter into a contract)
• Color
• Marital status
• National origin
• Race
• Religion
• Sex
• All or part of the applicant’s income derives from a public assistance program
• Exercised their right under the Consumer Credit Protection Act (CPCA)

The Fair Housing Act prohibits discrimination in all aspects of residential real estate-related transactions, including but not limited to:

• Making loans to buy, build, repair or improve a dwelling
• Purchasing real estate loans
• Selling, brokering or appraising residential real estate
• Selling or renting a dwelling

Under the FH Act, it is unlawful for a lender to discriminate on a prohibited basis in a residential real estate-related transaction based on the ECOA factors listed above including:

• Family status (defined as children under the age of 18 living with a parent or legal guardian, pregnant women and people securing custody of children under the age of 18)
• Handicap

As a mortgage lender, Impac may not discriminate based on any of the prohibited factors defined by either ECOA or the FH Act. Discrimination is illegal and is not tolerated by Impac or state and federal regulators. At Impac, associates are responsible for complying with the above acts and all other fair lending laws.

What You Should Know About Discrimination!

Discrimination is lending on the basis of a prohibited factor, i.e., race, sex, marital status, national origin, religion, age, receipt of public assistance or exercising rights under the Consumer Credit Protection Act, and is not tolerated by state and federal regulators. We cannot stress this point enough!

However, did you know there are three (3) types of discrimination? Discrimination can exist in the following forms (1) Over Discrimination; (2) Disparate Treatment; or (3) Disparate Impact.

So what does this really mean?

Overt Discrimination can be a blatant discriminatory practice or policy, or exist if a loan officer/lender expresses a discriminatory preference, but does not act upon it.

Example: If a loan officer/lender tells a customer, “It is our preference not to make loans to Hispanics, but the loan says we cannot discriminate, and we must adhere to the law.”

Disparate Treatment can occur in any part of the credit process and is usually subtle. Disparate treatment happens when a loan officer/lender treats an applicant differently based on one of the aforementioned prohibited factors.

Example: A minority couple inquires about a mortgage loan with a loan officer/lender. The loan officer/lender only provides information about fixed rate lending programs, and does not offer to assist the couple in completing their loan application. The minority couple completed the application, and was turned down by the lender. Conversely, a non-minority couple applies for a mortgage loan with the same loan officer/lender. They were given information on fixed and adjustable rate programs. The loan officer offered to assist the applicant in completing their application and their loan was approved by the lender.

Lastly, Disparate Impact is when a lender applies a practice or policy to all credit applicants equally, but the practice or policy disproportionally and adversely impacts applicant’s ability to obtain credit.

Example: A lender had a policy to offer 2nd TD loans where licensed to do so. Upon evaluation, the lender discovered it was no longer profitable to offer these loans in a particular area that had a high minority population, due to increasing defaults and high foreclosure rates. The lender decided to revise its lending policy, and no longer offered this type of program in the area. The lender could be disproportionately excluding minority applicants that may not default or be foreclosed upon from applying.

Fair Lending Policy Statement

Impac Mortgage is committed to treating all customers fairly and equally. We strive to ensure we do not discriminate in any part of our lending transactions based on the Prohibited Basis: race, color, religion, national origin, sex, marital status, familial status, military status, sexual orientation, age (provided the applicant has the capacity to contract and providing the applicant is of an age meeting the underwriting requirement for the product), disability, receipt of public assistance income, whether a person has exercised any right under the Consumer Protection Act (this includes the Truth in Lending Act), or any other basis prohibited by law. We continually work towards this goal, through training of all employees, and review of policies and procedures, systems, and business strategies.

FAIR LENDING POLICY STATEMENT

The following is the official Policy Statement and is available to all employees:

• Impac Mortgage Corp. is fully committed to the principle that all credit decisions should be made without regard to race, color, religion, national origin, sex, marital and familial status, military status, disability, age (provided the applicant has the capacity to contract and providing the applicant is an age meeting the underwriting requirements for the product) or any other basis prohibited by law.  Impac Mortgage Corp. will fulfill this commitment while maintaining prudent credit discipline and sound business practice.
• Impac Mortgage Corp. recognizes affirmative steps must be taken to ensure that this principle is applied consistently and continuously throughout all aspects of our credit operation, including product design, sales and marketing, underwriting, training, performance evaluation, and servicing practices.

• Corporate responsibility for coordinating policy implementation for fair lending is assigned to the Chief Compliance Officer. In this capacity, this position works closely with the appropriate divisions to maintain the necessary programs and take necessary actions to ensure compliance with all applicable regulations. Everyone at the Company involved in the credit process must strictly comply with fair lending requirements.

• Impac Mortgage Corp. monitors its operation and achievements on a regular basis to ensure – procedures are followed and our objectives are met.  Impac Mortgage Corp. will continue to make changes in our operation as we identify ways to more effectively meet our commitment to fair lending.

• Impac Mortgage Corp. requires loan terms, rates and fees to be consistent with applicant qualification, the applicant has the ability to repay the obligation and the applicant receives a tangible benefit from the loan transaction.