Learning to Spot the Signs of Bias; Borrowers Can Fight Banks' Hidden Prejudices if They Know What to Look For Series: SEPARATE AND UNEQUAL Series Number: 3/3
Discrimination can creep into the lending process when it's least expected, but borrowers can guard against it by knowing what to look for.</br></br>Even before filling out that first application, potential loan applicants can become victims of discriminatory practices through a technique known as "pre-screening." Anything a bank says that stops a borrower from filling out an application could be an attempt to pre- screen, or weed out people it doesn't want to lend to.</br></br>For example, the bank could say it doesn't make loans on the type of house you want to buy, or it doesn't have a loan product that fits your needs, or simply suggest you would have better luck applying somewhere else.</br></br>Borrowers should ask for complete explanations of business practices they believe are suspicious before moving on to the next lender.</br></br>Techniques that serve to weed out unwanted borrowers don't end with pre-screening. Dozens of borrowers and real estate agents tell of lenders who offered white applicants assistance with the complicated paperwork and left black couples to figure out questions for themselves. Without guidance, it's more difficult to know how to answer employment or credit questions in ways that will satisfy lenders.