Fair Housing
A Montana lender who refuses to make mortgage loans in a specific geographic area of the city, regardless of individual applicant qualifications, is engaging in the illegal practice known as:
ASteering
BBlockbusting
CRedlining✓ Correct
DChurning
Explanation
Redlining is the illegal practice of refusing to make mortgage loans or providing less favorable terms to qualified applicants based on the geographic location (neighborhood) of the property, often correlated with the racial or ethnic composition of that neighborhood. It violates both the Fair Housing Act and ECOA.
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Key Terms to Know
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.
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.
BlockbustingAn illegal practice of inducing homeowners to sell by claiming that the entry of minority groups will lower property values.
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