Real Estate Law & Regulations Flashcards

Blockbusting is an illegal practice in which real estate agents:

Answer: Induce homeowners to sell by suggesting minority groups are moving in, causing property values to decline

Blockbusting (panic peddling) involves inducing white homeowners to sell cheaply by implying that minority residents moving in will lower property values — a Fair Housing Act violation.

Steering in real estate refers to an agent's illegal practice of:

Answer: Directing buyers toward or away from neighborhoods based on protected class characteristics

Steering is the illegal act of channeling prospective buyers or renters toward or away from certain neighborhoods based on their race, religion, national origin, or other protected characteristics.

Redlining is an illegal discriminatory practice in which lenders:

Answer: Deny or limit loans in minority neighborhoods based on race or national origin

Redlining is the discriminatory practice of refusing to extend credit or insurance to residents in specific geographic areas based on racial or ethnic composition.

The primary role of a title company in a real estate transaction is to:

Answer: Search title records, issue title insurance, and facilitate closing

A title company searches public records to verify clear title, identifies any defects or encumbrances, and issues title insurance to protect buyers and lenders.

Owner's title insurance protects the:

Answer: Buyer's equity against title claims arising from pre-existing defects

Owner's title insurance protects the buyer's equity and ownership interest against title defects, liens, or encumbrances that existed prior to the purchase.

Which federal law prohibits discrimination in residential real estate transactions based on race, color, national origin, religion, sex, familial status, and disability?

Answer: Fair Housing Act of 1968

The Fair Housing Act of 1968, as amended in 1988, is the primary federal statute prohibiting discrimination in the sale, rental, or financing of housing.