Redlining in mortgage lending involves:
Why Refusing to make loans in certain geographic areas based on the racial composition Is Correct
Answer B: Refusing to make loans in certain geographic areas based on the racial 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
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Related North Carolina Questions
- A lender in NC refuses to make mortgage loans in predominantly minority neighborhoods regardless of individual applicants' creditworthiness. This practice is called:Fair Housing
- A NC real estate agent who tells a Black buyer that a neighborhood is 'changing' or 'transitioning' (implying racial composition changes) is engaging in which illegal practice?Fair Housing
- Private Mortgage Insurance (PMI) is typically required on conventional loans when the down payment is less than:Finance
- Private Mortgage Insurance (PMI) is typically required on conventional loans when the LTV exceeds:Finance
- A NC lender who uses 'redlining' in mortgage lending decisions is guilty of:Finance
- Which federal law prohibits discrimination in mortgage lending based on race, color, religion, national origin, sex, disability, or familial status?Finance
- Blockbusting is an illegal practice where:Fair Housing
- 'Blockbusting' is an illegal practice in which brokers:Fair Housing
Key Terms to Know
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.
SteeringAn 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.
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.
BlockbustingAn illegal practice of inducing homeowners to sell by claiming that the entry of minority groups will lower property values.
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