Capital One Credit Discrimination by Zip Code

There have been ongoing rumors since credit became tough to get that some creditors (American Express in particular) have been rejecting new applications or reducing existing customer credit limits based on where the borrower lives. It was said American Express was doing so on the grounds that home prices and foreclosures were worse depending on your zip code. That’s a reason there are new AmericanExpressSucks and other protest websites appeaing on the internet.

Now we have first-hand evidence that credit discrimination based on where you live is in fact hapenning.

Here is a letter from CaptalOne (the big credit card firm) I now have in my hand dated April 5 2009 which say’s “Thanks for your recent request for auto financing. After reviewing your application we cannot grant your request for credit because of worsening economic conditions in your area, in addition to the year of your mortgage.”

So basically it means because the applicants geographic area has lots of foreclosures and his/her home may possibly have upside down home equity thay are not able to buy a new car!

It’s interesting to note the Capital One credit turn-down letter does not mention the normal credit rejection reasons such as past due accounts and negative credit issues. I think that’s a real shame and huge consumer letdown issue which can only make the economy worse (not better) due to reduced credit availability, combined with less retail sales as a direct result.

If this discriminatory credit “redlining” was done by home lenders or Realtors® involving real estate sales it’s believed doing so would be illegal and subject to presecution and fines so why is it legal to discriminate by credit card firms and auto lenders?

That kind of blatant credit discrimination and redlining needs to be complained about to the Federal Trade Commission in our opinion. You may file a consumer complaint at this FTC web site http://www.ftccomplaintassistant.gov

How to Apply now for Loan Modification Program

President Obama’s government loan modification and loan refinance program part of the gov bailout package was announced on March 4 2009. At first glance it appears to be somewhat complex with a number of rules and requirements for qualification.

Rather than analyze it here in much detail we suggest the best option for you to pursue if you need help with your mortgage payments is to visit to the new government website FinancialStability.gov and apply for the refinance or modification programs immediately.

Apparently there are two different programs from what we understand. One involves modifications providing you are no more than 5% underwater and 60 days or more past due on your home loan payments. The other apparently relates to homeowners who are current with payments but possibly are more than 5% upside-down. Please do not quote us on that and investigate the Affordable Home Modification plan yourself because the program facts, rules and requirements are not real clear at this time.