What is the term for the practice of denying mortgage loans based on geographical locations?

Redlining refers to the practice of denying mortgage loans or insurance to individuals based on the geographical area in which they reside. This term originated from the practice of banks and insurance companies identifying high-risk neighborhoods, often predominantly populated by minority communities, by drawing red lines on maps.

The implications of redlining are severe, as it systematically restricts access to affordable housing and perpetuates inequality in neighborhoods, limiting opportunities for homeownership and financial stability for affected individuals. This discriminatory practice is considered a form of systematic racism and has been challenged by various laws and regulations aimed at promoting fair lending practices.

In contrast, steering refers to the practice where real estate agents guide potential buyers toward or away from certain neighborhoods based on their race or ethnicity, while market segmentation involves dividing a market into distinct groups of buyers. Discrimination is a broader term that encompasses various forms of unjust treatment, including those based on race, gender, and more, but does not specifically address the geographical aspect of mortgage denial like redlining does.