![]() If You’ve Been Wrongfully Rejected for a Mortgageĭiscriminatory home lending practices still exist today, which is why some of the bank regulators and the Department of Justice joined forces in late 2021 to launch a helpline and website for individuals to report redlining activity. ![]() The study concluded that there are still negative effects on the housing markets where redlining occurred decades ago. ![]() Looking at home sales data from 2000 to 2018, they found that residential properties “just inside the boundary of redlined zones” sold at a much lower price when compared to houses “in higher-graded zones” on the other side of the border. Recent research published by academics at the University of Michigan, who examined the housing market in “marginalized” and “nonmarginalized” neighborhoods that share a border, underlines this fact. Redlining in Real Estate TodayĮven with the passage of anti-redlining laws and several updates to the CRA, the financial system and housing market still struggles with its redlining past. (FDIC) or the Office of the Comptroller of the Currency (OCC). The law seeks to incentivize banks by telling regulators to factor in CRA performance and ratings when evaluating an institution’s application to expand operations or offer new services, including merging with or acquiring another lender.ĭepending on the size and type of financial institution, CRA examinations are conducted by the Federal Reserve, Federal Deposit Insurance Corp. It requires federal financial regulators to periodically grade financial institutions based on their efforts to meet the borrowing needs of all the communities where they do business (largely based on branch locations), especially in low- and moderate-income (LMI) neighborhoods. In response, Congress passed the Community Reinvestment Act of 1977. Many banks also refused to open branches or offer their services in low- and middle-income communities.
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