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Lender Redlining
Old 02-11-2008, 11:47 PM   #1
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Lender Redlining

Whole ZIP codes defined as 'high risk' -- themorningcall.com

Critics call it the new redlining: Many of the country's largest mortgage lenders are imposing loan restrictions in entire counties or ZIP codes that they rank as risky or ''declining.''


Enter your zip code here:

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My area is "low risk," but I hear WaMu just downgraded most of the Seattle area to "soft."
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Old 02-12-2008, 08:23 AM   #2
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they aren't refusing to lend, they are just requiring higher downpayments
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Old 02-12-2008, 08:51 AM   #3
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Hmm my neighbourhood in San Diego scores a D which only surprises me because I thought it would be lower.
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Old 02-12-2008, 09:43 AM   #4
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Can anyone show some zip codes that aren't Ds?

We've tried several and they've all come back as grade D
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Old 02-12-2008, 09:57 AM   #5
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Can anyone show some zip codes that aren't Ds?
67215
87115
78209
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Old 02-12-2008, 10:02 AM   #6
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Thanks.

Oh, and 90210 is a D
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Old 02-12-2008, 10:11 AM   #7
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Mine was a C.
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Old 02-12-2008, 10:28 AM   #8
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I didn't get a letter grade I got:

Grade for the property in ZIP Code xxxxx is Low Risk

(I guess they don't know about the chiggers, cockroaches, rattlesnakes, hurricanes, ...)
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Old 02-12-2008, 10:34 AM   #9
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Oh, goodie.

My zip code (which is one of the more affluent and stable in the New Orleans metro area) ranks a "C", elevated risk.

Maybe it's a good thing that I owe nothing to anyone and never intend to borrow again! But I suppose it will still affect my insurance costs.
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Old 02-12-2008, 10:39 AM   #10
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Mine was a C in northern MA
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Old 02-12-2008, 10:53 AM   #11
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mine is a C, but here in NYC to buy a coop you need at least 10% to 20% down anyway so it's not that big a deal
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Old 02-12-2008, 10:56 AM   #12
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Low risk here in the great void between Miami and Northern Virginia/DC.
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KC Zips
Old 02-12-2008, 10:57 AM   #13
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KC Zips

Every zip code in KC is a C even if it is great or has a two by four across the door.
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Old 02-12-2008, 11:10 AM   #14
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Looks like the lenders are between the proverbial rock and a hard place. By requiring higher down payments in some areas, they are referred to as "punishing" or "penalizing" home owners and prospective buyers. But if they continue to give loans with very low down payments they're considered capricious and not good fiduciaries of depositors' money.

I find it hard to consider the requirement for a 20% downpayment in an area considered ripe for huge drops in value to be "punishment." Sounds more like reasonable business sense.

BTW, I entered a few suburban Chicago zips and all came up C.
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Old 02-12-2008, 11:14 AM   #15
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The Grade for the property in ZIP Code XXXXX is Low Risk
as of February 12, 2008 11:12:00 AM CST
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Old 02-12-2008, 11:19 AM   #16
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FWIW, a lot of this is being driven by Fannie, Freddie and the mortgage insurers. Most big lenders don't keep the loans they make, so they have to be able to sell them to someone. They used to do this via securitization, but until this market reopens Fannie and Freddie are pretty much the only game in town. So when Fannie & Freddie start pulling back on low downpayment loans, everyone else follows suit. And since the availability of high CLTV piggyback loans is pretty much gone, the only way to do a low downpayment loan is with mortgage insurance. The mortgage insurers are now in control much more than they were, so they are raising prices and becoming ore discriminating in their underwriting, because they can.
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Old 02-12-2008, 11:20 AM   #17
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Low risk in my neighborhood too.
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Old 02-12-2008, 11:26 AM   #18
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Low risk also.
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Old 02-12-2008, 11:38 AM   #19
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Low risk also.
I put in the zip south of mine. It varies from expensive lakeside homes to beater bad dope dens closer to town.

Rated "low risk" anyway.

I believe these ratings must be backward looking. If prices start coming off, more of these areas likely will be higher risk.

Ha
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Old 02-12-2008, 01:01 PM   #20
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Quote:
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Can anyone show some zip codes that aren't Ds?

We've tried several and they've all come back as grade D
45150 (C)
14450 (low risk)
45140 (C)
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