Fair Housing
A South Dakota real estate agent who uses different qualifying standards for mortgage applications based on the applicant's race is guilty of:
APuffing
BSteering
CDiscriminatory financing (disparate treatment)✓ Correct
DBlockbusting
Explanation
Applying different qualifying standards based on race is disparate treatment, a form of illegal discrimination in lending prohibited by the Equal Credit Opportunity Act (ECOA) and the Fair Housing Act.
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Key Terms to Know
Fair Housing Act
Federal law prohibiting discrimination in the sale, rental, or financing of housing based on race, color, national origin, religion, sex, disability, and familial status.
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.
BlockbustingAn illegal practice of inducing homeowners to sell by claiming that the entry of minority groups will lower property values.
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.
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