Question 6

A lender denies a borrower because of the crime rate in their area.

Under the Federal Fair Housing law, while it is generally prohibited to discriminate based on protected characteristics, considerations such as crime rates can be a legitimate factor in lending decisions, provided they are applied uniformly and not based on discriminatory practices.

A) A broker informs a potential seller that now is a good time to sell due to immigrants in the neighborhood.

This option is problematic as it implies a suggestion based on the presence of immigrants, which could be interpreted as steering based on national origin. Such actions could violate the Fair Housing Act by promoting discriminatory practices.

B) A broker meets a Hispanic buyer and suggests condos in a Hispanic neighborhood.

This action may also be considered discriminatory as it suggests that the buyer should live in a neighborhood based solely on their ethnicity. This violates the principle of fair housing, which prohibits steering individuals to specific areas based on their race or ethnicity.

C) A broker in a Kentucky neighborhood suggests a buyer might be happier elsewhere.

This option lacks clarity, but it could be inferred that the suggestion is based on the broker’s assumptions rather than the buyer’s needs. Such a suggestion could be seen as discriminatory if it implies that certain neighborhoods are preferable for specific demographics.

D) A lender denies a borrower because of the crime rate in their area.

This option aligns with permissible practices under the Fair Housing law, as it allows lenders to consider factors like crime rates when assessing loan applications. However, it is crucial that such decisions are made objectively and do not discriminate against individuals based on protected characteristics.

E) A landlord receives a rental application from a group of activists and denies it after asking about their plans.

This option raises concerns regarding discrimination as the landlord’s decision could be viewed as a reaction to the applicants' political beliefs or affiliations. Denying rental applications based on such factors can violate fair housing protections.

Conclusion

Option D is the only choice that reflects an action permissible under the Federal Fair Housing law, as it involves a legitimate consideration of crime rates in lending decisions. All other options either suggest discriminatory practices or violate the principles of fair housing by steering individuals based on protected characteristics. Thus, D stands out as the correct answer, grounded in lawful lending practices.