Redlining
National Real Estate Exam glossary · Practice Of Real Estate
Definition
The illegal practice by lenders or insurers of refusing to extend credit or coverage, or offering inferior terms, in particular neighborhoods on the basis of their racial or ethnic composition rather than the merits of the individual application. It is prohibited under the Fair Housing Act and ECOA.
Redlining in plain English
Redlining is an illegal, discriminatory practice where a bank or insurance company refuses to lend money or offer coverage — or gives worse deals — to people in a neighborhood because of the race or ethnicity of who lives there, instead of judging each person's actual finances. The name comes from an old habit of literally drawing red lines on maps around minority neighborhoods to mark them "off-limits." It's like a coach benching players based on their skin color rather than how well they actually play — deeply unfair and, in this case, against the law under the Fair Housing Act and ECOA.
Practice Redlining
A lender is found to be routinely denying mortgage loans in… This illegal practice is known as:
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