Finance
Under California's Holden Act, lenders are prohibited from:
ACharging interest rates above 10% on residential loans
BRedlining — refusing to make loans in certain geographic areas based on the racial or ethnic composition of the neighborhood✓ Correct
CRequiring borrowers to escrow property taxes and insurance
DOriginating loans through mortgage brokers
Explanation
California's Housing Financial Discrimination Act of 1977 (Holden Act) prohibits lenders from discriminating in loan decisions based on race, color, religion, sex, marital status, national origin, ancestry, or geographic location (redlining). It mirrors federal fair lending laws with state enforcement.
Related California Finance Questions
- In California, what is the minimum time from recording the Notice of Default (NOD) to a non-judicial trustee's sale?
- What is 'amortization' in mortgage lending?
- What is the difference between a mortgage and a deed of trust?
- In a deed of trust, non-judicial foreclosure, who conducts the trustee's sale?
- What is 'negative amortization' in a mortgage loan?
- A loan that requires only interest payments during the loan term with the entire principal due at maturity is called a:
- What is a 'hard money loan'?
- A reverse mortgage allows a homeowner to:
Practice More California Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free California Quiz →