Final answer:
The best advice for a housing counselor to provide to a client who may have experienced a violation of the Equal Credit Opportunity Act when denied a mortgage loan is to report the incident to the Consumer Financial Protection Bureau or the Federal Trade Commission and possibly consult with a lawyer.
Step-by-step explanation:
If a client has been denied a mortgage loan with the reasoning to come back after their divorce has been final for three years, it appears that they may have experienced a violation of the Equal Credit Opportunity Act (ECOA). As a housing counselor, it would be prudent to advise the client on the steps to report such a violation.
ECOA prohibits discrimination based on marital status among other things.
The client should first file a complaint with the Consumer Financial Protection Bureau (CFPB) or the Federal Trade Commission (FTC). These agencies are responsible for enforcing the ECOA.
Additionally, the client should keep all records of correspondence and documentation regarding the loan application and denial. It may also be beneficial for the client to consult with a lawyer for guidance on the potential for a discrimination lawsuit.
Under the ECOA, creditors are required to provide applicants with a notice that specifies the reasons for denial or a notice of their right to learn the reasons if denied credit.
If these requirements are not met, this is also grounds for additional complaints against the lender.