Illinois Real Estate Practice Exam

What is redlining in real estate practices?

1. Making corrections on a red pen to property documents

2. Designating underground utility lines on city maps

3. Using red borders on property listings

4. Insurance company or mortgage charge different rates on protected class

The correct answer is: Insurance company or mortgage charge different rates on protected class

Redlining refers to the discriminatory practice of insurance companies or mortgage lenders charging different rates or outright denying services based on a person's membership in a protected class, such as race, ethnicity, or socioeconomic status. This practice has historically resulted in a lack of access to mortgage loans or insurance for communities of color and other marginalized groups, contributing to systemic inequality and segregation in housing. The other options do not accurately represent the concept of redlining. Making corrections with a red pen pertains to editing documents and has no relation to discrimination. Designating underground utility lines involves urban planning and infrastructure management, while using red borders on property listings describes a visual marketing technique unrelated to fair housing practices. Therefore, identifying the discriminatory financial practices associated with redlining highlights the significant impact this term has had on real estate and community development.