What practice is defined as racial steering?

Racial steering refers to the practice where real estate agents or loan officers guide prospective homeowners or borrowers towards specific neighborhoods or properties based on their race or ethnicity. This action is intended to influence the demographics of a community, often resulting in segregation and a lack of equal opportunity for individuals seeking housing or loans.

Encouraging applicants toward specific loan products based on race aligns with this definition, as it reflects an attempt to control the financial opportunities available to individuals based on their racial identity. This practice is not only unethical but also illegal under fair housing laws, which aim to ensure that all individuals have equal access to housing and financial services regardless of race.

The other options do not accurately describe racial steering. Rejecting applications based on financial status does not pertain to race. Offering loan products solely to minorities is also discriminatory but does not fit the concept of steering, which involves directing individuals rather than providing options based on race. Lastly, advertising loan products in racially diverse neighborhoods does not imply steering, as it does not involve directing individuals based on their race but rather attempts to reach a broader audience.