The Equal Credit Opportunity Act (ECOA) prohibits discrimination in any aspect of a credit transaction — including mortgage origination, servicing, and foreclosure. Learn your ECOA rights, how to identify credit discrimination, and how ECOA violations create foreclosure defenses and counterclaims.
Get Free Case ReviewThe Equal Credit Opportunity Act (15 U.S.C. § 1691 et seq.) is a federal civil rights law that prohibits creditors from discriminating against credit applicants on the basis of race, color, religion, national origin, sex, marital status, age, or receipt of public assistance. Regulation B (12 CFR Part 1002) is the CFPB's implementing regulation.
ECOA applies to EVERY stage of a credit transaction — not just origination. It covers loan servicing, modifications, collections, and foreclosure. A servicer's discriminatory treatment during loss mitigation or foreclosure is an ECOA violation.
| Type | Definition | Example |
|---|---|---|
| Overt Discrimination | Explicit, open discrimination on a prohibited basis | "We don't offer modifications in minority neighborhoods" |
| Disparate Treatment | Treating a protected borrower differently than similarly situated borrowers | Denying modification to minority borrower while approving similar white borrower |
| Disparate Impact | Facially neutral policy that disproportionately harms a protected class | Policy denying modifications for loans under $100K — disproportionately affects minority borrowers |
ECOA violations can serve as both a defense to foreclosure and the basis for counterclaims. If the lender discriminated against you in origination (ECOA violation), the current holder takes the loan subject to that defense under the FTC Holder Rule. If the servicer discriminated during loss mitigation — treating your modification application differently because of your race, sex, age, or other protected status — that is a new, independent ECOA violation supporting counterclaims and an injunction against foreclosure.
ECOA violations can be powerful counterclaims in foreclosure. We'll help identify discriminatory treatment and prepare the claims to protect your rights.