A lender in Seattle refuses to provide mortgage financing to a qualified applicant because the property is located in a predominantly minority neighborhood, regardless of the applicant's creditworthiness. This practice is known as what, and which federal law does it primarily violate?
Correct Answer
B) Redlining; violated under the federal Fair Housing Act
Redlining is the illegal practice of refusing to provide financial services (such as mortgage loans) to residents or buyers of properties in certain geographic areas based on the racial or ethnic composition of those areas. It violates the federal Fair Housing Act (which prohibits discrimination in the terms, conditions, or availability of residential real estate financing based on race, color, national origin, and other protected classes) as well as the Equal Credit Opportunity Act (ECOA) and the Community Reinvestment Act (CRA).
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Related Topics & Key Terms
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Related Concepts
Price fixing is an illegal antitrust practice in which competing real estate brokerages agree to charge the same commission rates, fees, or other pricing for their services. It is a per se violation of the Sherman Antitrust Act.
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.
More Practice Of Real Estate Questions
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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