A mortgage lender in Alaska charges a higher interest rate to an applicant because of the neighborhood where the property is located, which has a predominantly minority population. This practice is known as:
Why Reverse redlining (predatory lending) Is Correct
Answer C: Reverse redlining (predatory lending)
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
Federal law prohibiting discrimination in the sale, rental, or financing of housing based on race, color, national origin, religion, sex, disability, and familial status.
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.
RedliningAn 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.
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Related Alaska Questions
- Under the Fair Housing Act, when a lender offers different loan terms to borrowers in different neighborhoods based on the racial composition of the neighborhoods, this is called:Fair Housing
- An Alaska bank that targets minority borrowers for predatory high-cost loans when they could qualify for standard loans is engaging in:Fair Housing
- In Alaska, which type of mortgage clause allows the lender to demand full repayment of the loan upon the property's sale?Finance
- Which type of title insurance policy protects the lender's interest in an Alaska mortgage transaction?Escrow & Title
- Under the Fair Housing Act, a real estate agent who steers a minority buyer away from neighborhoods with a majority of the buyer's own ethnic group and toward heavily minority areas is engaging in:Fair Housing
- An Alaska lender requires title insurance as a condition of making a mortgage loan. The cost is typically paid by:Finance
- Which type of mortgage loan is characterized by a fixed interest rate and equal monthly payments that fully repay the loan over its term?Finance
- A 'reverse mortgage' in Alaska is a loan product primarily designed for:Finance
Key Terms to Know
An 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.
RedliningAn 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.
Fair Housing ActFederal law prohibiting discrimination in the sale, rental, or financing of housing based on race, color, national origin, religion, sex, disability, and familial status.
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