What is the term for the illegal practice of refusing to issue mortgages in specific areas?

The term for the illegal practice of refusing to issue mortgages in specific areas is known as redlining. This practice typically targets areas predominantly inhabited by racial or ethnic minorities and is a form of systemic discrimination in lending practices. Redlining has significant historical roots in the United States, where it has contributed to long-lasting socioeconomic disparities and has been outlawed since the Fair Housing Act of 1968.

Redlining is particularly concerning because it prevents residents of these areas from accessing essential financial services, effectively reinforcing cycles of poverty and disinvestment. This not only impacts individual homeownership opportunities but also hampers community development and wealth-building over generations. Understanding redlining is crucial for real estate professionals as it emphasizes the importance of fair housing practices and the need to avoid discrimination in lending.