The Home Mortgage Disclosure Act of 1976 is associated with which discriminatory practice?

• A. Redlining
• B. Steering
• C. Blockbusting
• D. Occupancy restrictions

Answer: (A)

This item tests how HMDA is used to monitor mortgage lending for discrimination. The Home Mortgage Disclosure Act requires lenders to report information on applications, approvals, and loan terms so regulators and the public can detect patterns of bias in lending. Redlining is the practice of denying or restricting mortgages in certain neighborhoods, often based on race or ethnicity, which HMDA data is designed to reveal. By analyzing loan denial rates, denial gaps, and loan terms across different areas, HMDA helps identify redlining.

Other discriminatory practices exist, but they aren’t the primary association with HMDA. Steering involves directing borrowers toward or away from certain lenders or neighborhoods; blockbusting involves pressuring homeowners to sell due to racial turnover; occupancy restrictions concern who may live in a dwelling. The key link for HMDA is uncovering redlining through disclosed lending data.