Fair Housing
A West Virginia lender who offers FHA loans only to borrowers in certain zip codes (excluding minority-majority neighborhoods) is practicing:
AEffective loan product targeting
BRedlining — geographic credit discrimination based on neighborhood racial composition✓ Correct
CLegitimate risk management by avoiding flood-prone areas
DCompliance with FHA loan limits for certain areas
Explanation
Offering loan products only in selected geographic areas while excluding areas based on racial composition is redlining — an illegal form of credit discrimination prohibited by the Fair Housing Act, ECOA, and the Community Reinvestment Act.
Related West Virginia Fair Housing Questions
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