A lender in Oregon denies a mortgage application from an African American family in a specific ZIP code, while approving applications with similar credit profiles from white families in adjacent ZIP codes. The lender claims the denial is based on the neighborhood's declining property values. This practice is best described as which of the following?
Correct Answer
C) Redlining, because the lender is denying financial services based on the racial composition of a geographic area
Redlining is the practice of denying or limiting financial services — such as mortgage loans, insurance, or other credit — to residents of certain geographic areas based on the racial or ethnic composition of those areas. The lender's denial of loans in a specific ZIP code while approving comparable applications in adjacent areas, correlated with racial demographics, is a classic example of redlining. This violates both the federal Fair Housing Act and the Equal Credit Opportunity Act (ECOA).
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Related Topics & Key Terms
Key Terms:
Related Concepts
Florida brokers are required to maintain transaction records and escrow records for a minimum of five years.
A tie-in arrangement is an illegal antitrust practice in which a seller conditions the purchase of one product or service on the buyer's agreement to purchase a separate product or service.
A trust account, also called an escrow account, is a separate bank account maintained by a broker to hold funds belonging to others, such as earnest money deposits, security deposits, or other client funds.
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In Wyoming real estate practice, an associate broker or salesperson is not associated with a responsible broker at renewal. What should the licensee remember?
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