Residential Mortgage Lending: Charting a Course Through the Regulatory Maze

One specific issue addressed by this symposium is the practice of redlining. If what is meant by redlining is discrimination in residential mortgage lending, I am certainly opposed to such a practice. If, however, what is meant by redlining is the consideration and analysis of the effect of the surrounding neighborhood on the property which secures a particular residential mortgage loan, then there are other problems which must be addressed and focused upon. It has been stated that a lender redlines a specific geographic area located within the larger geographic area normally serviced by that lender when the lender refuses to accept any applications for loans, refuses to make any loans, or refuses to make any loans unless those loans are guaranteed by some form of public or private mortgage insurance, if the loans are to be secured by real estate in the designated areas. \u27Allegations have been made that the practice of redlining contributes to urban decay and must be eliminated. At least one court,in denying a motion for summary judgment, has ruled that redlining violates sections 3604, 3605, and 3617 of the Fair Housing Act of 19681 and section 2000d of the Civil Rights Act of 1964. Additionally, various regulatory agencies are in the process of implementing, or have already implemented, regulations that seek, either explicitly or implicitly, to eliminate the practice of redlining