Mint Hill, NC Real Estate Agent and Home Stager: Are the Big Banks Guilty of Reverse Redlining?

Are the Big Banks Guilty of Reverse Redlining?

Are the Big Banks Guilty of Reverse Redlining?  Until reading an article in the New York Times by Michael Powell called The New Poor, I had never heard the term reverse redlining before but I knew exactly what he meant.

We have all read articles and heard the media blame our current economic and housing crisis on irresponsible people buying homes they couldn't afford and that they were pushed by greedy real estate agents.  It was not the bank's fault it's the consumer, maybe the real estate agent, right?  They should have known better, they should have read the loan papers yada-yada. Are our current economic struggles the consumer's fault or did the bank lure them into it?  You decide.  Below is a typical scenario of someone struggling financially in many US cities today that did not have a huge real estate bubble that burst:

A homeowner bought their house 10-15 years ago the traditional way, modest down payment, fixed interest loan.  They lived within their means and made payments on time.  As time went on and credit loosed up they took on consumer credit.  It was easy to do because everyday when you opened your mailbox there was an onslaught of pre-approved credit card and loan offers (usually from big banks).  When all this debt seemed overwhelming, a god send came.  The big bank then sent you a pre-approved offer to refinance your house, roll everything into one easy payment, simplify life and consolidate your finances.

Many homeowners consolidated because that is what the media, financial guru's, the bank and everyone else said was "the smart thing to do".  The only problem with this scenario is many of the homeowners that consolidated debt with a refinance went into sub-prime loan products that were riskier and more expensive than they had to be in spite of the fact that many of these borrowers had good credit and qualified for lower rates.  Why, because the bank targeted these people; many banks actually had cold call lists and concentrated on zipcodes to push these consumer loans, then refi's to "less sophisticated consumers" because of the money it generated for the bank.  Now these homes that have been owned and lived in for over a decade by hardworking responsible people are going into foreclosure.

I have been seeing this trend for a while when I go on listing appointments.  A distressed homeowner that needs a short sale or is fearful their house will be lost to foreclosure has actually lived in it since the 1990's and owes more than they paid for it.  Why, because they consolidated their debt, not because the market is bad. Yes, I have been seeing this for a while but not heard or read about reverse redlining until now and when I did, I knew exactly what it meant.  So you tell me, are the big banks guilty of reverse redlining?  Many state and local regulators think they are and have been obtaining the ammunition they need to file lawsuits against them from many disgruntled ex-bank employees willing to blow the whistle on their former employers.  As they say, no good deed goes unpunished.






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This article was written by:  Jennifer Manchester.   If you want to learn more about Staging your Charlotte, NC home to sell contact Jennifer Manchester at  and make an appointment to give your home a competitive edge and use the ultimate  home seller's  marketing tool to beat out your competition and get your home sold faster.

If you would like to search homes for sale in Charlotte, NC or search homes for sale in  Matthews, NC or search homes for sale in Mint Hill, NC and surrounding areas, you can see for yourself what is available.  If you would like to meet with Jennifer Manchester to discuss buying  or selling your home in the greater Charlotte, Matthews, Mint Hill area visit her at to schedule an appointment today!

Comment balloon 8 commentsJennifer Manchester • June 30 2011 10:26PM


I had not heard about this, Jennifer. It will be interesting to see how the investigations turn out.

Posted by Liz Lockhart, GRI, Cape Girardeau Real Estate (Riverbend Realty, Cape Girardeau, MO) about 6 years ago

Hi Liz:

It will definitely be interesting to see how this all plays out.  Thanks for commenting.

Posted by Jennifer Manchester, GRI, ePRO, ASP - Broker/Home Stager (Suburban Properties of Charlotte, LLC ) about 6 years ago

Hi Jennifer,

This is an interesting blog.I wonder what the investigation turned out.Thank you for sharing to us an important article.I hope the homeowners or buyers would be able to learn something about it.Good job in being the best Charlotte Short Sale Agent. 


Posted by Kim & Kristine Halverson, Realtors (, Santa Monica Real Estate :) ) over 5 years ago

Hi Jennifer,Glad I got a chance to read this.Such an intersting blog,hope you could update us what happened.Thanks for always informing as and Keep being top notch Charlotte Short Sale Agent. 

Posted by Nestor & Katerina Gasset, Realtors, Wellington Florida Homes For Sale (International Properties and Investments LLC) over 5 years ago

This is very helpful to anyone and very informative. You are truly one of Charlotte short sale agents finest! Thanks for these reports.

Posted by Bas Panch (SCV Home Buyer) almost 5 years ago

Hi Jennifer. Thanks for always taking time in sharing to us your knowledge. You really show a great dedication to you work. Keep it up being a great Charlotte Short Sale Agent.

Posted by Debbie Harr, Realtor Homes That Click, Worthington Ohio Homes (Homes that Click Realtors) almost 5 years ago

This is definitely a great post Jennifer! Great share of a comprehensive article. Continue doing great as the best Charlotte Short Sale Agent.

Posted by Debra Parker, Realtor - Stuart Florida Homes for Sale (Debra Parker Real Estate, Inc.) almost 5 years ago

Well, they are. They actually invented redlining.

The practice got its name from the lenders’ use of maps which were colored in red to designate such areas.

Posted by Inna Ivchenko, Realtor® • Green • GRI • HAFA • PSC Los Angeles CA (Barcode Properties) almost 2 years ago