Which practice involves refusing loans or insurance in specific neighborhoods?

Which practice involves refusing loans or insurance in specific neighborhoods?

• A. Redlining
• B. Steering
• C. Deferred Maintenance
• D. Capital Expenditures

Answer: (A)

Refusing loans or insurance in specific neighborhoods is redlining. This practice involves denying or limiting financial services based on a property's location rather than its creditworthiness or financial health. It was historically done by lenders and insurers who marked certain areas as too risky, often correlating with the neighborhood’s demographics, and it undermines fair housing and lending standards. The other terms don’t fit: steering means directing buyers to or away from certain areas, not outright denying services; deferred maintenance is neglecting property upkeep; and capital expenditures are investments in property improvements.

Refusing loans or insurance in specific neighborhoods is redlining. This practice involves denying or limiting financial services based on a property's location rather than its creditworthiness or financial health. It was historically done by lenders and insurers who marked certain areas as too risky, often correlating with the neighborhood’s demographics, and it undermines fair housing and lending standards. The other terms don’t fit: steering means directing buyers to or away from certain areas, not outright denying services; deferred maintenance is neglecting property upkeep; and capital expenditures are investments in property improvements.