Few things terrify lenders more than the arrival of a manila envelope from the Department of Housing and Urban Development (HUD) containing a redlining allegation.
In recent months, HUD investigators have made redlining cases a departmental priority, according to interviews with attorneys who have reviewed the complaints, and lenders who declined to comment on the practices for fear of being associated with redlining.
Typically, a redlining allegation begins with a comparative analysis of a lender’s performance in relation to its peers in low to moderate income census tracts and majority-minority neighborhoods. But HUD has adjusted its approach — it is details ⇒
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