Texas Real Estate State Practice Exam

What is the term for the refusal to lend in a particular geographic area?

1. Usury

2. Predatory lending

3. Redlining

4. Equal Credit Opportunity

The correct answer is: Redlining

Redlining is the term used to describe the practice of refusing to lend in a particular geographic area, typically based on the racial or economic demographics of that area. This discriminatory practice has historically contributed to segregation and inequality in housing and access to credit. Usury refers to the illegal action of charging excessive interest rates on loans, predatory lending involves taking advantage of borrowers with unfair or deceptive loan terms, and the Equal Credit Opportunity Act prohibits discrimination in lending practices based on factors such as race, religion, national origin, sex, marital status, age, or receipt of public assistance.