Fannie Mae plans to change how it buys mortgages beginning June 1st. The new policy, known as the declining markets rule, requires higher down payments in communities where homes have lost value. This is redlining.
It matters because lenders will be less inclined to make loans in communities where Fannie won't buy their loans. This will mean a spike in loan declinations, a drop in sales, and an increase in the unsold inventory -- but only in the neighborhoods selected for disinvestment by America's erstwhile supporter of the American Dream. Does this sound wrong? It should to you!
This will hurt some North Carolina communities more than others. It really whacks the urban Midwest (Michigan, Ohio, and Indiana), as well as California and Florida.
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