Fair HousingIntermediateDelaware Exam

Redlining is the illegal practice of:

AMarking foreclosure properties with a red line on a map

BRefusing to make loans or offering less favorable terms in certain geographic areas based on the racial or ethnic composition of those areasCorrect

CDrawing red lines around school district boundaries to segregate students

DCharging higher rents in predominantly minority neighborhoods

Why Refusing to make loans or offering less favorable terms in certain geographic areas based on the racial or ethnic composition of those areas Is Correct

Answer B: Refusing to make loans or offering less favorable terms in certain geographic areas based on the racial or ethnic composition of those areas

Redlining is an illegal practice in which lenders refuse to make loans or offer unfavorable loan terms in certain areas based on the demographic characteristics of the neighborhood, particularly racial or ethnic 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

Redlining

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.

People Also Study

Key Terms to Know

Redlining

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.

Steering

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.

Blockbusting

An illegal practice of inducing homeowners to sell by claiming that the entry of minority groups will lower property values.

Private Mortgage Insurance (PMI)

Insurance required by lenders on conventional loans with less than 20% down payment, protecting the lender — not the borrower — against default.