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If you are basing your decision on what interest rate should be charged for someone who lives in a neighborhood based on the ethnic make-up of that neighborhood and not traditional lending criteria like the individual's credit rating, you are engaging in redlining.
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I get that. But what if you're not using ethnic criteria? What if you're using default rates among properties nearby? Zillow already runs a search that can give you all nearby foreclosures. Imagine what commercially used algorithms can provide.
I'm not missing your point. I agree that if you base lending on ethnicity, that's racism. But what if you're just fucking over people in high default areas?
My simple point is, lending against property is not all about credit score and down payment. It's about ability to get rid of the bricks and mortar if there's a f/c. I think this can hurt a lot of minority borrowers.
