Fair Housing

Which of the following actions by a Pennsylvania lender would constitute illegal redlining?

ACharging higher rates to borrowers with lower credit scores
BRefusing to make loans on properties in a specific ZIP code because of the racial composition of the neighborhood✓ Correct
CRequiring a minimum loan amount for portfolio loans
DOffering different rates for fixed versus adjustable-rate mortgages

Explanation

Redlining is the illegal practice of refusing to make loans (or imposing unfavorable terms) on properties in specific geographic areas based on the racial or ethnic composition of those areas. It violates the Fair Housing Act, Equal Credit Opportunity Act, and Community Reinvestment Act.

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