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Have You Been "Red Lined"?

It is illegal.

It still happens – sort of.

Oh, I don’t have any actual proof but I do know that there are lenders who ask for the impossible documentation and qualifications on applications for loans in certain zip codes.

In Atlanta it is 30310.

"Red-lining" means the practice by which a financial
      institution may designate certain areas as unsuitable for the making
      of mortgage loans and reject applications for mortgage loans or vary
      the terms of a mortgage loan upon property within that area because
      of the prevailing income, racial or ethnic characteristics of the
      area, or because of the age of the structures in the area.

Sounds like I have uncovered some red-lines.

But is that fair to the lender to make the practice illegal? Here is what I see from the lender's view:

Lending is a risk based business. Lending is not a social service – although there are people who feel it should be a social service. Maybe those people should lend their own money?

So what is the problem in 30310? Mostly foreclosures and flip-fraud. Many areas in 30310 are like war zones with newly rehabbed homes peppered throughout. In fact you may find one street of all new homes and the next street half burned down and the other half needs to be. Even on that street that is in such bad shape you’ll find homes worth $75,000 that have been sold and foreclosed upon for $350,000

Should lenders be forced not to have a different set of requirements?

DISCRIMINATORY -- REAL ESTATE MORTGAGES.
         It is a discriminatory practice for any financial institution
      accepting mortgage loan applications to engage in the practice of
      red-lining as defined in section 535A.1.

What ZIP is it in your area? Have you been hit?