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Redlining
Redlining was similarly prohibited by the Fair Housing Act, specifically 42 U.S.C. § 3605, which states, in relevant part, that:
It shall be unlawful for any person or other entity whose business includes engaging in residential real estate-related transactions to discriminate against any person in making available such a transaction, or in the terms or conditions of such a transaction, because of race, color, religion, sex, handicap, familial status, or national origin.
Redlining is, in essence, changing the terms or conditions of a real estate transaction, usually related to loan rates, repayment terms, etc., due to race, color, religion, sex, handicap, familial statue, or national origin. Or, in other words:
Initially, the court finds that a fair and liberal reading of plaintiffs’ complaint in this action reveals two separate theories of recovery under the Fair Housing Act. First, plaintiffs allege that defendants discriminated individually against the Thomases’ by denying their loan application on the basis of their race. Second, plaintiffs’ complaint alleges that defendants denied the Thomases’ loan application because of First Federal’s practice of “red-lining” the Thomases’ neighborhood. Red-lining is defined as “mortgage credit discrimination based on the characteristics of the neighborhood surrounding the would-be borrower’s dwelling.[1]
[1] Thomas v. First Fed. Sav. Bank of Indiana, 653 F. Supp. 1330, 1336-37 (N.D. Ind. 1987).
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