A discriminatory practice by which banks,insurance companies, etc., refuse or limit loans, mortgages, insurance, etc., within specific geographic areas, especially inner-city neighborhoods.
Definition: Redlining is against the law, but that doesn't always stop violators. It is a discriminatory practice in real estate, typically involving lenders that refuse to lend money or extend credit to borrowers in certain areas of town or when realtors won't show properties to certain types of people in certain neighborhoods. Those red-lined areas are typically occupied by people in poverty or people of color, or both. It is against the law to discriminate against borrowers based on race or color, among other factors.
Redlining became known as such because lenders would literally draw a red line around a neighborhood on a map, often targeting areas with a high concentration of people of color, and then refusing to lend in those areas because they considered the so-called "risk" too high. Even though redlining is now against the law, major lenders today still end up in court over this despicable practice. You might rightfully wonder how is redlining still a thing? But then you would probably be a white person.
The Fair Housing Act is contained in the Civil Rights Act of 1968 and modified by the Fair Housing Amendments Act of 1988. The act sets forth seven protected classes of people who cannot be discriminated against on the basis of:
Race
Color
Religion
National Origin
Sex
Handicap
Familial Status
For real estate agents, it means it is against the law to steer clients to particular neighborhoods, whether deliberately by the agent or at the buyer's personal request. It means if a buyer says, "I want to buy a home in a Hmong neighborhood," an agent can't direct a buyer to a neighborhood made up of a high-density population of Hmong.
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