Fair Housing
A bank refuses to make mortgage loans in a specific Providence neighborhood based on the racial composition of the area. This practice is called:
ASteering
BRedlining✓ Correct
CBlockbusting
DPredatory lending
Explanation
Redlining is the illegal practice of denying loans or insurance (or charging more for them) based on the racial or ethnic composition of a neighborhood. It violates the Fair Housing Act and the Equal Credit Opportunity Act.
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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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