Redlining in real estate is often used to describediscrimination in mortgage lending based on demographics. It is a practice where mortgage companies deny or offer less favorable mortgages to people in particular neighborhoods.
People also ask
What is ‘Redlining’. Redlining is an unethical practice that puts services (financial and otherwise) out of reach for residents of certain areas based on race or ethnicity.
What is redlining in mortgage?
Redlining is a term used to refer to a now-illegal practice in the mortgage lending industry. Lenders used to draw red lines around portions of a map to indicate areas of a city in which they didn want to make loans. Even if a credit-worthy applicant applied to buy a home in those neighborhoods, they could be denied.
Is it illegal to redline on a house?
This practice was made illegal in the Fair Housing, or Equal Credit Opportunity Act. While redlining on a racial basis has been prohibited by law, lenders can still redline if a home lies on a fault line or a flood plain. How does redlining hurt home buyers?
What is redlining and how can you avoid it?
Redlining describes a practice that occurs when lenders refuse to make loans to people with lower incomes or of a certain demographic. The practice is banned by both the Fair Housing Act of 1968 and the Fair Housing Amendments Act of 1988. Being denied a loan due strictly to income or credit factors is not considered redlining.