Warning! Sensative Mortgage Topic

This is a warning as it is a sensative mortgage topic. But, you can always count on me to "open up a can of worms" and stress my opinion. I received a disturbing email on Friday, informing me that a few MAJOR BANKS are rolling out new home loan guidelines to protect their ASSets...Or are they?

I saw the new guidelines in Black and White.

Like many other areas in the United States, California has been experiencing a higher level of forclosures and notices of default. As a result, these MAJOR BANKS are now rolling out new home loan guidelines, which give "RISK ASSESSMENTS" to specific counties that are showing signs of DISTRESS. Yes, counties that have higher notice of default levels,foreclosures and lowering property values.

Based on the category the county falls into, decides the max loan to value that the Banks are willing to write loans on.

To that, I throw this spin on the topic...

Is this not Redlining?

I believe it is. Back in the hayday, banks wouldn't lend money in areas that were populated by minorities. And now, it is coming back around in full scale!

Why? Most of the counties in California that were on the list had weaker job economies, which indirectly points to less educated individuals with lower income levels. It's not picking the color of a person's skin, but it is certainly picking out a demographic group!

What's your opinion on the topic?

Scott Gormley
Broker/Owner
Oak Valley Mortgage
2006 Chico Assoc. of Realtors Affiliate Chairman
Direct: 530.592.8362
Fax: 530.267.5555
Website: http://www.CALoan.com

Blog: http://www.CARealEstateBlog.com

"You find the perfect home, we'll find the perfect loan!"