(1) Except on the basis of written policies or criteria uniformly applied to all neighborhoods within a particular standard metropolitan statistical area or within the county in areas outside a standard metropolitan statistical area, a credit granting institution shall not deny a loan application or vary the interest rate, the term to maturity, the percentage required for a down payment, the application and appraisal procedures, or other terms or conditions of a loan contract for either of the following:
  (a) Due to racial or ethnic characteristics or trends in the neighborhood in which the real estate is located.

Terms Used In Michigan Laws 445.1602

  • Appraisal: A determination of property value.
  • Commissioner: means the commissioner of the office of financial and insurance regulation of the department of licensing and regulatory affairs. See Michigan Laws 445.1601
  • Contract: A legal written agreement that becomes binding when signed.
  • Credit granting institution: means a state or nationally chartered bank, a state or federally chartered savings and loan association, a state or federally chartered credit union, the Michigan state housing development authority, or a business entity making or purchasing mortgage loans, that has a main office, branch office, or service center in the state of Michigan at which it conducts that business. See Michigan Laws 445.1601
  • Credit report: A detailed report of an individual's credit history prepared by a credit bureau and used by a lender in determining a loan applicant's creditworthiness. Source: OCC
  • Equal Credit Opportunity Act: Prohibits creditors from discriminating against credit applicants on the basis of race, color, religion, national origin, sex, marital status, age, or because an applicant receives income from a public assistance program. Source: OCC
  • Home improvement loan: means a secured or unsecured loan used for the purpose of repairing, rehabilitating, or remodeling an existing residential dwelling designed for occupancy by 4 or fewer families, as stated by the borrower in the loan application and as recorded on the books of the credit granting institution. See Michigan Laws 445.1601
  • Interest rate: The amount paid by a borrower to a lender in exchange for the use of the lender's money for a certain period of time. Interest is paid on loans or on debt instruments, such as notes or bonds, either at regular intervals or as part of a lump sum payment when the issue matures. Source: OCC
  • Loan application: means a written application for a mortgage loan or home improvement loan. See Michigan Laws 445.1601
  • Mortgage: The written agreement pledging property to a creditor as collateral for a loan.
  • Mortgage loan: means a loan secured by a mortgage on real property designed for occupancy by 4 or fewer families, including an individual unit of a condominium or cooperative, a refinancing of an existing mortgage loan on real property designed for occupancy by 4 or fewer families involving an increase in the outstanding balance of the principal due, or a loan secured by a junior lien on real property designed for occupancy by 4 or fewer families undertaken for any purpose. See Michigan Laws 445.1601
  • Mortgage loan: A loan made by a lender to a borrower for the financing of real property. Source: OCC
  • Neighborhood: means either of the following:
  (i) A census tract as defined by the United States bureau of the census in census of population, if located within a standard metropolitan statistical area as defined by the United States office of management and budget. See Michigan Laws 445.1601
  • person: may extend and be applied to bodies politic and corporate, as well as to individuals. See Michigan Laws 8.3l
  • Public law: A public bill or joint resolution that has passed both chambers and been enacted into law. Public laws have general applicability nationwide.
  • state: when applied to the different parts of the United States, shall be construed to extend to and include the District of Columbia and the several territories belonging to the United States; and the words "United States" shall be construed to include the district and territories. See Michigan Laws 8.3o
    •   (b) Due to the age of the structure on the real estate proposed as security or the age of other structures in the neighborhood in which the real estate is located. This subdivision does not preclude a credit granting institution from considering the physical condition and probable remaining useful life of the structure and all structures within a radius of 750 feet.
      (2) A policy or criteria used by a credit granting institution is considered to be uniformly applied, even if a credit granting institution grants exceptions to the policy or criteria in favor of a loan applicant in not more than 5% of the loan applications submitted to the credit granting institution.
      (3) Each loan application shall be individually considered on the basis of a factually supportable analysis of the lending risks associated with the proposed loan.
      (4) A credit granting institution shall not impose a minimum mortgage amount greater than $10,000.00, and a credit granting institution shall not impose a minimum loan amount of greater than $1,000.00 for a home improvement loan.
      (5) A credit granting institution shall not deny an individual an opportunity to submit a loan application. This act shall not be construed to require a credit union to allow loan inquiry or application by a person who is not a member or eligible to be a member of the credit union.
      (6) A person who makes a loan application for a mortgage loan or home improvement loan that is denied or the terms of which are varied and not accepted by the applicant shall receive from the credit granting institution a written statement of the reasons for the rejection or variation of terms. A credit granting institution that complies with the requirements of the equal credit opportunity act, title VII of Public Law 90-321, 15 U.S.C. § 1691 to 1691f, and the regulations promulgated under that act, is considered to have complied with the requirements of this subsection.
      (7) A credit granting institution, unless otherwise prohibited by law, may charge an application fee uniform as to type of loan. If a credit granting institution includes appraisal in its written statement of reasons for rejection or variance or collects an application appraisal fee, then upon the request of a person making a loan application that is denied or the terms of which are varied and not accepted by the applicant, a credit granting institution shall provide the person, without additional charge, with a copy of the appraisal made in connection with the loan application. If an application appraisal fee is not collected, the copy may be made usable only for purposes related to this act. Copies of other completed forms, reports, and correspondence, except a credit report or correspondence pertaining to a credit report, used by the credit granting institution in reaching its decision shall be provided, on request and without charge, to a person making a loan application that is denied or the terms of which are varied and not accepted by the applicant.
      (8) Except for an error or omission that is a violation of this act, a credit granting institution is not liable to an applicant or any other person for an error or omission in an appraisal or other supporting documents made available to an applicant.
      (9) If a person makes a loan inquiry relating to the prospects of obtaining a loan, the credit granting institution shall respond to the inquiry and shall send or cause to be delivered to the person making the inquiry a copy of the pamphlet or other documents prepared pursuant to subsection (10).
      (10) Each credit granting institution shall make available for public distribution at the institution’s principal office and each branch office or service center a pamphlet or document explaining in general terms the credit granting institution’s criteria for the approval or denial of a loan application. The pamphlet or other document shall prominently state that a person has the right to make a loan inquiry and to file a written application for a mortgage loan or home improvement loan and to receive a written response to the application. A credit granting institution may use a separate pamphlet or document for mortgage loans and home improvement loans, and the pamphlet or document may contain additional material as well as the material required by this subsection. A copy of the pamphlet or other document shall be filed with the commissioner.
      Previous section
    Next section  
     Act 135 of 1977 Contents