Fair Housing

A mortgage lender charges a higher interest rate to a borrower because of their national origin. This is an example of:

ALegal risk-based pricing
BIllegal predatory lending and fair lending violation✓ Correct
CPermissible rate setting based on credit score
DA routine adjustment for property location

Explanation

Charging higher rates or fees based on a protected class characteristic (such as national origin) is illegal under the Fair Housing Act and ECOA. Such practices are a form of predatory lending.

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