I understand that lenders were required by law, particularly the Community Reinvestment Act, to make these loans, whether they’re private lenders or not.
not really. The original CRA said that banks could not deny people based solely on race and where they lived (and this meant that even middle class families with good credit could not get loans or mortgages solely because of the neighborhood they were in). Redlining did happen in the pre-CRA days, and it is one of the reason America’s cities turned into cesspools between the 1950s and 1970s.
Look at New York City. In the 1940s and 1950s the Bronx was largely a stable middle class area. By the mid 1970s property owners were literally burning their own buildings left and right because the redlining had devalued their property so much they could make more by insurance fraud.