Let the Suing Begin

As you all know the foreclosure thing has really gotten out of hand. Foreclosures have even *gasp* hit the suburbs. Being good Americans and having a government that holds a loose grasp on business, when things get out of hand, we sue.

So the city of Baltimore has begun to sue Wells Fargo over "reverse redlining" -- a fancy way to say Wells Fargo is alleged to have given loans with the harshest terms to those in the poorest (read: blackest) neighborhoods. The city of Baltimore (as well as cities across the nation) must now deal with the fallout of having lots and lots of vacant homes to deal with. The city must inspect, maintain, and protect these homes. Sometimes they are set on fire, and there's no one to cut the lawn.

The cost to the other homeowners on the block is terrible. Lowered home prices on your block mean lower home prices for your own house -- as well as dealing with vacant houses that are never maintained and are a break in and fire risk.

Additionally, Fannie Mae and Freddie Mac (quasi-governmental agencies that buy mortgages from Wells Fargo, Countrywide, US Bank, etc.) has announced new guidelines for lending. They are saying that if you are in a declining value area you may not be able to get a 100% loan as you have in the past. The funny thing is that no one can figure out what these declining areas are. Will the correspond with the poorest neighborhoods in town? Will they also correspond with the most ethnic neighborhoods in town? Will this lead to a Baltimore-style lawsuit?
Realtors are pretty up in arms over this. We are taught to be unendingly fair in our treatment of neighborhoods, and this announcement rubbed us all the wrong way. It will be interesting to see where it leads.