Redlining, as demonstrated by the broker's policy, is best described as which action?

• A. The broker is following fair lending practices
• B. The broker is engaging in discrimination based on neighborhood
• C. The broker is potentially engaging in redlining
• D. The broker is violating advertising guidelines

Answer: (C)

Redlining means denying or limiting access to loans or other financial services in particular neighborhoods based on location or the area’s demographic makeup, not on an individual’s qualifications. When a broker adopts a policy that treats certain neighborhoods differently, it signals that redlining could be happening. The best description is that the broker may be engaging in redlining, since the policy shows a neighborhood-based restriction that aligns with this discriminatory practice and carries legal risk under fair housing laws. It’s not simply a matter of fair lending practices, which would require equal access regardless of neighborhood, and it isn’t primarily about advertising guidelines.