Lenders say they won’t give mortgages unless buyers offer proof of safe water
The Wall Street Journal | February 3, 2016 Flint, Mich., residents have a new concern on top of lead in their drinking water: Some mortgage lenders say home buyers must prove there is no contamination at a property or they won’t make a loan for its purchase.
Local real-estate agents and lenders worry the new restriction could be another punch in the gut to the city’s housing market, which has long suffered from economic distress after the departure of major auto industry employers.
“The tragedy is an already depressed community is now likely to see housing values plummet not only because of the hazardous water, but because folks cannot obtain financing,” said Daniel Jacobs, an executive with Michigan Mutual, which recently issued a notice to its employees requiring that homes pass a water test before it will make a loan.
Similar notices have been sent out by other lenders, while some major banks, including Wells Fargo & Co. and Bank of America Corp., said obtaining a loan could be difficult if a home doesn’t have potable water. Read more here.