What is "redlining" in the context of mortgage lending?

Redlining refers to the discriminatory practice where mortgage lenders refuse to offer loans or insurance to individuals based on the geographic location of the property, often correlating to racial or ethnic demographics of that area. This terminology originates from the practice of drawing red lines on maps to delineate areas deemed too risky for mortgage lending. As a result, entire neighborhoods, primarily those inhabited by minority groups, became systematically denied access to financing opportunities, which contributed to long-term socioeconomic disparities. Recognizing this practice is crucial in understanding fair housing laws and the importance of equitable lending practices in the real estate industry.