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We have an application for purchase of rental property in west end of Louisville. At one point, we had 98 properties in that area and sustained substantial losses on several due to property value declines. There are several that are also still performing and remain on our books. We are not really interested in lending more in that area due to the losses, but are concerned this could be a redlining issue. Current applicant qualifies per our policy and pending appraisal and title, loan will most likely close. We would like to avoid an influx of application referrals from the same realtor that referred this one, but are afraid any action we take could be deemed redlining based on the geographical population of the area. Basically, I am wanting to verify that we are correct in saying it would be discriminatory and redlining for us to say that a few city blocks are out of our lending area when we lend throughout the rest of the county or that we will only do owner occupied in that area and not rental/flip loans in that area.

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