Deck 9: Federal Housing Policies: Part 2

Question 1

If a broker makes a statement that certain minority groups are moving into a neighborhood,and that property owners should sell quickly at a reduced price to avoid further depreciation,they are using an illegal practice known as:

A) blacklisting
B) redlining
C) blockbusting
D) FHAing

Answer 1

blockbusting

Question 2

The practice of designating an area in which a lender will not make a conventional mortgage loan is known as:

A) redlining
B) blockbusting
C) FHAing
D) zoning

Answer 2

FHAing

Question 3

In a perfectly competitive market,a discriminatory firm would:

A) have higher costs
B) be less efficient
C) have a lower stock value
D) all of the above
E) none of the above

Answer 3

all of the above

Question 4

What is meant by the term "taste" for discrimination?

A) firms or individuals may derive psychological,but not monetary,satisfaction from discrimination
B) firms or individuals may have been allowed to practice discriminatory procedures for so long that they have developed an almost automatic tendency toward discrimination
C) firms or individuals may require a minority group member to pass more stringent requirements before granting the loan than those that would be required for a white
D) firms or individuals may have learned that they are more likely to suffer monetary losses by lending to minority groups; therefore they benefit from being discriminatory

Question 5

The term "economics of information" refers to a theory that proposes that:

A) minority group members are usually not informed of all of their fights as a borrower,and are therefore not allowed to take advantage of economic opportunities available to others
B) often the expense of acquiring information is greater than the benefits. In such a case,discrimination may occur
C) firms with the best information about their borrowers are almost always more successful. But,it may be illegal to ask borrowers to supply that information or to base the loan decision upon that information
D) discriminatory firms generally have to spend more to ensure that their records comply with the strict letter of the regulations

Question 6

Which of the following statements is incorrect in relation to the ECOA?

A) non-discriminatory firms will attain a competitive advantage
B) lenders are engaged in little discrimination
C) the ECOA has had a significant impact on making credit available
D) the ECOA is a valuable statement about principles of fair lending practices

Question 7

The term "redlining" refers to a practice of:

A) lenders setting higher income standards for minority group members.In other
Words,setting a "red line" of income level which a minority must meet
B) automatically denying loans to minority group members
C) drawing a red line around an area on a map defining which areas are predominantly minority occupied
D) drawing a red line around an area on a map defining neighborhoods within which a lender would not make mortgage loans

Question 8

One method of defining or identifying discriminating lending behavior is that discrimination is said to exist if a lender purposely intends to treat a minority group member less favorably.This is known as the:

A) effects method
B) intent method
C) practices method
D) screening method

Question 9

One method of defining or identifying discriminating lending behavior is that discrimination is said to exist if a lender fails to adhere to a set of guidelines governing the do's and don'ts of a lending procedure.This is known as the:

A) effects method
B) intent method
C) practices method
D) screening method

Question 10

One method of defining or identifying discriminating lending behavior is that discrimination is said to exist if minority group members represent a smaller proportion of those receiving credit than they do in the general population.This is known as the:

A) effects method
B) intent method
C) practices method
D) screening method

Question 11

Which of the following methods has the federal government focused on to regulate discrimination and enforce the ECOA Act?

A) effects method
B) intent method
C) practices method
D) screening method

Question 12

Which of the following are exempt from the provisions (except for racial discrimination)of the Fair Housing Act of 1968?

A) an owner-occupant who does not employ a broker
B) religious organizations
C) private clubs that do not operate commercially for a profit
D) all of the above
E) none of the above