Fair Housing

A North Dakota mortgage lender requires a property to be in a 'desirable neighborhood' as determined by its internal criteria. If these criteria result in fewer loans in minority neighborhoods, this is a potential:

ALegitimate underwriting decision
BRedlining violation under the Fair Housing Act and Community Reinvestment Act✓ Correct
CRESPA violation only
DPermissible use of neighborhood analysis

Explanation

Lender policies that effectively deny credit in neighborhoods based on their racial or ethnic composition—regardless of individual borrower qualifications—constitute redlining in violation of the Fair Housing Act and the Equal Credit Opportunity Act.

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