During a fair housing training session for licensees in Maine, the instructor explains that a lender's practice of refusing to offer mortgage loans in certain geographic areas based on the racial composition of those neighborhoods is a violation of the federal Fair Housing Act. What is the term for this prohibited practice?
Correct Answer
B) Redlining
Redlining is the illegal practice of refusing to provide mortgage loans or insurance in certain geographic areas based on the racial or ethnic composition of those neighborhoods. It is prohibited under the federal Fair Housing Act (42 U.S.C. § 3605) and the Equal Credit Opportunity Act. The term originates from the practice of drawing red lines on maps around minority neighborhoods to mark them as ineligible for lending. Maine licensees must recognize redlining as a federally prohibited form of race and national origin discrimination.
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Related Topics & Key Terms
Key Terms:
Related Concepts
Advertising regulations govern how real estate licensees may market properties and services, requiring truthful, non-deceptive advertising that includes proper identification of the brokerage.
Antitrust violations in real estate occur when competing brokerages or agents engage in practices that restrain trade, reduce competition, or harm consumers through collusion. These violations are governed by the Sherman Antitrust Act and can result in severe penalties.
Broker supervision is the legal obligation of a designated or managing broker to oversee and be accountable for the real estate activities of all salespersons and associate brokers operating under their license.
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