Redlining is best described as which practice?

• A. Harassment of applicants
• B. Lender refusal to approve a mortgage loan based on location or area characteristics
• C. Guiding buyers to a preferred neighborhood
• D. Falsifying income on loan applications

Answer: (B)

Redlining is the lender’s refusal to approve or limit mortgage financing in a neighborhood based on the location or its characteristics. This discriminatory practice targets certain areas, often with minority populations, by denying loans or offering worse terms solely because of where the property is located. That makes it the best description of the choice presented. It isn’t about harassing applicants, steering buyers to a preferred neighborhood, or falsifying income on loan applications. Redlining violates fair lending laws, including the Equal Credit Opportunity Act and the Fair Housing Act, which require decisions to be based on the borrower’s qualifications and the property’s value, not the neighborhood.