Posted by Kary L. Krismer at 2/8/08 4:32 p.m.

Everyone should click the link "weaker markets" above.

Tacoma is the only city in Washington mentioned (I guess Fife is okay??). But the list starts off with the entire states of Arizona, California, Florida and Nevada.

Posted by Rhonda Porter at 2/8/08 5:38 p.m.

One of the second mortgage lenders that we work with has a couple of counties listed as "declining values":
Pierce, Clark, Thurston and Asotin counties.

Posted by unregistered user at 2/8/08 9:42 p.m.

I'm still not clear on the intelligence of mortgage companies and mortgage insurance companies making it harder and harder to buy a home while the housing market continues to slide. Kinda reminds me of 3rd grade when a group of students messes up so the mean teacher keeps all the kids inside during recess. I support the insurers and lenders tightening standards for risky loans, but it seems there is a full-blown retraction of services to even good borrowers. yeah right.. that's one way to end the crisis and save the homeowners and employees and contractors caught up in this mess.

Posted by biliruben at 2/9/08 8:23 a.m.

Mortgage companies and insurers aren't in the business of ending crises or saving anybody other than themselves. These folks are often desperately trying to avert their own 3bankruptcy.

Posted by Kary L. Krismer at 2/9/08 8:49 a.m.

BTW, Vancouver is a second city in Washington on the list--it's included under Oregon.

Posted by unregistered user at 2/9/08 9:03 a.m.

Check this article by the Seattle Times. This really is Redlining, and I'm sure we'll be hearing more about it. Seems difficult to believe it a) makes economic sense, and b) would be legal.

Posted by unregistered user at 2/9/08 9:04 a.m.

http://seattletimes.nwsource.com/html/realestate/2004159163_harney03.html

Posted by Kary L. Krismer at 2/9/08 9:32 a.m.

Well it makes more sense than having an appraiser indicate whether or not they think the market in an area will go down. Different appraiser, different result.

Posted by maxxer at 2/9/08 9:38 a.m.

If the housing market is "sliding" then by definition it is easier to buy into it. What makes a home easier to buy is a low purchase price and stable interest rates, not a gimmicky mortgage. Decades ago banks used to require home buyers put up half the purchase price of a home as a down payment. That was probably not a bad idea. Only get-rich-quick speculators who want to turn residential real estate into a more volatile market have any chance of really benefiting from easy loan terms. Drawing speculators into residential real estate, even in small numbers, turns every home owner into a speculator, whether they want it or not. I see no social or long-term economic benefit in encouraging liquidity at the expense of stability.

Posted by Mack McCoy at 2/9/08 10:19 a.m.

Redlining is using the ethnic or racial composition of an area or a neighborhood as the primary determining area of whether to provide financial services.

Posted by Jillayne Schlicke at 2/9/08 10:25 a.m.

Hi unregistered user,

I'm not so sure we can make an automatic "redlining" conclusion.

If banks are forced to make loans without due diligence work in regards to declining values, then all bank loans will become harder to obtain: higher downpayment requirements for everyone, higher interest rates, higher fees....for all of us.

Perhaps that is on the way for all of us no matter what.

Posted by unregistered user at 2/9/08 12:10 p.m.

If the Seattle Times did, so can we.

Posted by unregistered user at 2/9/08 12:25 p.m.

Jillayne, banks should do their due diligence, but to degrade an entire zip code or County is redlining, and it is wrong. Due diligence per transaction is the correct and only appropriate way.

Kary, when an appraiser evaluates one property, that's appropriate action. He could be wrong, that's why there is a challenge system in place. One property at a time, not one entire zip code or County.
---------------------------------------------------
Here are several defininitions of REDLINING.

FROM WIKIPEDIA: Redlining is the practice of denying or increasing the cost of services, such as banking, insurance, access to jobs,[2] access to health care,[3] or even supermarkets[4] to residents in certain, often racially determined,[5] areas. The most devastating form of redlining, and the most common use of the term, refers to mortgage discrimination. The term "redlining" was coined in the late 1960s by community activists in Chicago. It describes the practice of marking a red line on a map to delineate the area where banks would not invest. During the heyday of redlining these areas were most frequently black inner city neighborhoods.

Redlining maps (or zip codes or counties today):
The maps were based on assumptions about the community, not accurate assessments of an individual's or household's ability to satisfy standard lending criteria.

------------------------------------
And, from todays' Seattle Times article:
------------------------------------
Critics call it the new redlining. Many of the country's largest mortgage lenders are imposing loan restrictions in entire counties or ZIP codes they rank as risky or "declining."

Sound underwriting
David Berenbaum, executive vice president of the National Community Reinvestment Coalition, a consumer group active in litigation against subprime-mortgage companies, said that "sound underwriting has nothing to do with geography. It is based on the income and qualifications of the applicant, and the valuation of the property by a professional appraiser."

Anything else, said Berenbaum, "runs afoul" of federal fair lending and civil-rights statutes. "It is redlining."

Paul Skeens, head broker for Carteret Mortgage in Waldorf, Md., said he had observed that lenders' county and ZIP code designations "have their heaviest impacts on areas with high proportions of minority groups and people with moderate incomes who bought houses" with low- and no-down-payment programs during the first half of the decade.

Labeling these areas as "declining" then imposing higher down payment requirements "becomes a self-fulfilling prophecy," said Skeens.

"People can't buy there because they need more cash upfront, the houses don't sell, and prices go down."
-----------------------------------------------------

Maybe it's time to get Speilburg or someone to revamp the old movie CATCH-22, call it "CATCH 2008,The Housing Market".

Posted by Mack McCoy at 2/9/08 1:28 p.m.

- Jillayne, banks should do their due diligence, but to degrade an entire zip code or County is redlining, and it is wrong. Due diligence per transaction is the correct and only appropriate way.

Tell your auto insurance company, while you're at it.

Posted by unregistered user at 2/9/08 1:42 p.m.

I do believe if standards were set in place for qualifying for a loan [of any kind], and a person meets those standerds then that would be sound business to make that loan happen.If a home appraises for a fair amount and meets standards of the economic times, then that loan should go thru. In fact a lender would be crazy not to bet on a sure deal.

Posted by unregistered user at 2/9/08 10:36 p.m.

I agree that a sure deal is great.

And, Mack, you're right on the auto insurance as well, except HUD doesn't care about auto insurance.

Posted by Mack McCoy at 2/10/08 1:28 a.m.

Civil rights leaders did, which is why we're discussing red-lining. It's not about geography, or the economic characteristics of an zip code, it's about the ethnic and racial composition of an area and refusing to insure or lend to residents of that area based solely on those criteria.

I'm not arguing in favor of PMI by zip code, but it's a stretch to refer to it by the same term used for ethnic and racial discrimination, in my view.

Posted by unregistered user at 2/10/08 7:07 a.m.

Home buyers have another choice, buy from from Redfin or 500Realty, at least they get 66% or 75% extra money at closing.

Posted by unregistered user at 2/10/08 8:47 a.m.

Redfin's venture capital is going to run out, and unless they figure out a way to become profitable, they either won't survive, or will have to give up on the idea that they can afford to rebate, and still stay in business. From what I've read on these posts, 500Realty appears to be run by a couple of fairly illiterate guys, doubt it will survive either.

Ina tougher market, history shows us the traditional real estate model survives better. I suspect that the newer agents who go to the low-salary offices just aren't experienced enough to guide their clients.

We'll see in a year what really happens.

Posted by Kary L. Krismer at 2/10/08 11:27 a.m.

I've only seen the postings of one 500Realty guy, and he didn't seem that illiterate. He's probably more likely to survive because he's probably not setup to burn through money like Redfin is.

Posted by unregistered user at 2/10/08 12:08 p.m.

Say what you will those 500 Realty seem to be marching through Tacoma and making a killing. I read about them in all the News Tribune articles. Their overhead is nothing and they announced the opening of an office in Lynnwood and Kent. Check em out! They just closed my brothers sale and purchase.

Posted by Mack McCoy at 2/10/08 1:34 p.m.

More like making a wounding, but, hey - whatever works for you.

Posted by Kary L. Krismer at 2/10/08 4:43 p.m.

I looked up their stats a while ago after a piece where a lot of people were commenting on them. As I recall, the numbers were pretty low.

Posted by Kary L. Krismer at 2/10/08 5:06 p.m.

Mack, I rechecked the numbers. More like a small abrasion. No bandage is necessary.

Posted by Amarjit Sandhu at 2/10/08 5:37 p.m.

Agents at 500Realty are highly educated, You can check their profiles on "About Us" page. Ray has a bachelor degree from University of Washinton, Eric has a degree in Business Administration and an MBA in Marketing, Al Manning has a Bachelors degree in Mechanical Engineering from University of California and so on. I have a Masters degree in Mechanical Engieering from University of Washington.

I don't know how some one can call all these people illiterate.

Check us out at Seattle Home Show from February 16-24

Amarjit Sandhu
www.500Realty.net

Posted by unregistered user at 2/10/08 8:21 p.m.

Let me try to find some of the posts I considered illiterate. Could just be ranting and raving made me think that way:-)

Posted by Amarjit Sandhu at 2/10/08 10:14 p.m.

500Realty strongly believes that home owners have worked hard in their life, made all the house payments year after year, month after month, so they deserve to keep all the money they earn from selling the house.

Second for the home buyers they are worthy of keeping most of the commission, as these days they find their own home through internet searches, driving through, open houses or looking at new developments.

It is hard to understand on my part why would a consumer would get angry at this kind of deal.

Amarjit Sandhu
www.500realty.net

Posted by unregistered user at 2/11/08 3:42 p.m.

Seems to me that you said you were not in this to help buyers or sellers, but for the advertising money on your website.

Posted by maxxer at 2/22/08 5:54 a.m.

I heard an interesting perspective from a banker explaining why PMI redlining of the entire states of California, Arizona, etc was a socio-political move as well as economic. All of those states have very high poor minority ownership, and not coincidentally, all of those ownership areas are the ones that are seeing over 50% declines in property values due to the credit debacle. Even a number of cities associated with those depressed areas are facing bankruptcy. If the PMI companies simply redline just those communities, (as they do in other states), they would likely face a lot of legal and PR grief from people claiming minority district redlining. Cities facing bankruptcy might also throw in legal challenges as well.

Moreover, because the divide in wealth in those states is so great, the communities that serve the wealthy really are not affected much by the presence of PMI or not since the wealthy really don't need it, as they can usually easily save up a down payment fast enough and don't need any financing gimmicks to afford a mortgage. This reality is pretty much confirmed by the fact urban areas such as San Francisco, for example, have extremely high median home prices (compared to national medians) that have not seen much decline as a result of the credit crunch. The wealthy don't need PMI, but everyone else does, so redlining the entire state bypasses the political issues yet still perfectly satisfies all economic aspects of it.