Question

A Latina applies to a mortgage company for a home loan. She is refused based on the reputation of the neighborhood for a high number of foreclosures. This is an example of what illegal practice?

Answer 1

The refusal to provide a loan to a Latina based on her neighborhood's high foreclosure reputation is an example of redlining, a historically discriminatory practice where lenders would deny services to minority neighborhoods, leading to economic disparities.

Step-by-step explanation:

The situation described in the student's question is an example of redlining, a discriminatory practice where lenders deny services, such as mortgages, to individuals based on the racial or ethnic composition of their neighborhood rather than individual merit or creditworthiness. During the era of redlining, maps were created where minority neighborhoods were marked in red, indicating to lenders these were high-risk areas. This led to a systemic denial of financial services to people in these neighborhoods, mostly affecting people of color, and contributing to long-term economic disparities. The refusal to grant a mortgage to the Latina based on her neighborhood's reputation is an illegal practice that aligns with historical patterns of redlining.