Our secondary market mortgage department wants to offer a $500 lender credit to all educators and first responders, which would apply to home purchase loans only. To my knowledge, these are the only restrictions that will be placed on the credit offer. Loan officers would be trained to offer the credit to all borrowers who fit these criteria- we would like to avoid having to use a "coupon" if at all possible. The promotion will be marketed via email & social media, and also through ads in newspapers located within our assessment areas.

Are there any fair lending pitfalls we need to be aware of?

Wreck, has management defined educators and first responders? Would an educator be a full time teacher, or anyone in the school system, including custodial staff, etc. for the local school system, community colleges, etc. First responders the same! Certified, or include independent ambulance companies, 911 Operators, mechanics, etc.

I don't see it as an issue, except when there might be a lot of exclusions, or if the list is not well defined, leading to judgement calls

They state it would be school teachers - kindergarten through high school. I see what you're saying about well defined parameters. I'll definitely be looking into that before giving them the okay! Thanks so much, Rocky!

And this should go without saying, but look at your community demographics too. Do the folks that do these jobs in your community represent the make-up of your community? If not, could this become evident in your numbers?

Also, I think we often assume such folks are some of the lowest paid in our communities, but that is not always the case. How will this come out in your numbers.

I am not sure if you are a HMDA reporter or not, or a full or a partial, of whatever these days, but we all need to be aware that full HMDA reporters will be serving up a huge amount of data to examiners going forward that will show the slightest trends and variations so much more clearly than before. Just be very aware of the reasons and justifications for your pricing and credit decisions before you make them, rather than crafting a story for them after they come out in the wash during a review.

Wreck, the reason for the question was what JJ proposed. If the "teachers" do not follow your demographics, that might be an issue. If minorities represent 50% of the community, but 30% of the teachers, is there enough documentation of the reasons why this group was selected, especially (hypothetically) if 70% of the teacher's aides are minorities, and they are excluded from the offer.

The offer would have a lot of exclusions from the people involved with children's education. Documenting and defining "why" that particular group was proposed (to the exclusion of others) would need to be well thought out and documented. Even then, an examiner could questin it.