A mortgage lender refuses to make mortgage loans in inner-city neighborhoods. This practice is BEST described as:

• A. Redlining
• B. Steering
• C. Blockbusting
• D. Reverse redlining

Answer: (A)

Denying mortgage loans in inner-city neighborhoods is redlining. This discriminatory practice involves lenders refusing to provide or insure loans in a geographic area based on the neighborhood’s characteristics rather than the individual borrower’s qualifications, cutting off access to credit and investment in that community. Historically, redlining used mapped demarcations to seal off entire areas from lending, which is illegal under fair housing laws because it targets protected groups based on location.

Steering would involve directing borrowers toward or away from certain neighborhoods, blockbusting involves exploiting fear of demographic change to prompt sales, and reverse redlining refers to charging higher costs or offering worse terms to a community. The situation described matches redlining because the decision hinges on the neighborhood, not the borrower's creditworthiness.