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 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.
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.
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?
Why do real estate agents use red lines when showing homes?
It can also apply when real estate agents follow the same sort of practice when they’re showing homes. The act is referred to as redlining for the resumed practice of mortgage lenders of drawing red lines around portions of a map to indicate areas or neighborhoods in which they do not want to make loans.?/div>Redlining: What Is It? – The Balance