When lenders refuse to provide mortgages, what term describes this practice?

The term that describes the practice of lenders refusing to provide mortgages based on certain demographics or geographic areas is known as redlining. This term originated from the practice of using red ink to delineate areas on maps that were deemed high-risk by lenders, often correlating with minority neighborhoods. As a result, these communities were systematically denied access to mortgage loans and other financial services, which contributed to economic disparities and segregation.

Redlining is a form of discrimination that has historically impacted access to homeownership for minorities, leading to long-term effects on wealth accumulation and community development. Recognizing this practice is essential for understanding systemic barriers in the housing market and the steps necessary to promote fair lending practices.

The other terms listed do not accurately describe the practice of denying mortgages based on demographic factors. Sub-prime lending refers to loans offered to borrowers with poor credit history and higher risk of default. Predatory lending involves unfair, deceptive, or fraudulent practices during the loan origination process, often targeting vulnerable borrowers with unfavorable terms. Market manipulation refers to illegal activities that influence the pricing of securities or commodities, not directly related to the provision of mortgages.