Which of the following is an example of redlining?
Why A lender refusing to make loans in a neighborhood based on its racial composition Is Correct
Answer A: A lender refusing to make loans in a neighborhood based on its racial composition
Exam Tip: Fair Housing
Fair Housing questions test both federal (Fair Housing Act of 1968) and state-level protected classes. The federal protected classes are race, color, religion, national origin, sex, familial status, and disability. Many states add additional protections.
Key Fair Housing Terms in This Question
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- Which term describes the practice of insurance companies refusing to issue homeowner's insurance in certain neighborhoods based on their racial composition?Fair Housing
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- Redlining is the illegal practice of:Fair Housing
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Key Terms to Know
An illegal practice where lenders or insurers deny services or charge higher rates in certain neighborhoods based on the racial or ethnic composition of those areas.
SteeringAn illegal practice where a real estate agent directs buyers toward or away from certain neighborhoods based on the buyer's race, religion, national origin, or other protected characteristics.
BlockbustingAn illegal practice of inducing homeowners to sell by claiming that the entry of minority groups will lower property values.
Short SaleA sale of real property where the sale proceeds are less than the outstanding mortgage balance, requiring lender approval.
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