A mortgage broker maintains separate rate sheets - one for 'standard' applicants and another with higher rates for loans in certain ZIP codes that the broker privately refers to as 'problem areas.' These areas have predominantly minority populations. This practice:
Correct Answer
B) Violates fair housing laws as discriminatory redlining
This practice constitutes classic redlining under the Fair Housing Act. Using different rate sheets based on geographic areas that correlate with race creates a discriminatory effect on protected classes. The fact that these are privately referred to as 'problem areas' suggests discriminatory intent as well.
Why This Is the Correct Answer
This practice constitutes classic redlining under the Fair Housing Act. Using different rate sheets based on geographic areas that correlate with race creates a discriminatory effect on protected classes. The fact that these are privately referred to as 'problem areas' suggests discriminatory intent as well.
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