Fair Housing

What is 'predatory lending' and how does it relate to fair housing in Delaware?

AA lender offering mortgage loans at below-market rates to attract vulnerable buyers

BAbusive lending practices that target vulnerable populations (often minorities) with high-cost, exploitative loan terms, violating both HOEPA and potentially fair housing laws✓ Correct

CAny lending practice with a high interest rate

DLending practices restricted to commercial real estate transactions

Explanation

Predatory lending involves abusive mortgage practices (excessive fees, prepayment penalties, balloon payments, loan flipping) often targeted at vulnerable populations. When these practices disproportionately target protected classes, they may also violate fair housing laws.

People Also Study

Key Terms to Know

Discount Points

Prepaid interest paid to a lender at closing to reduce the mortgage interest rate, with each point equal to 1% of the loan amount.

Fair Housing Act

Federal law prohibiting discrimination in the sale, rental, or financing of housing based on race, color, national origin, religion, sex, disability, and familial status.

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.

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.