Lenders hiking required down payments in L.A.

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One last pre-Super Bowl Sunday post: Countrywide and other large lenders began requiring larger down payments last week in counties where prices are falling. That includes pretty much all of Southern California.

From Ken Harney’s weekly column in the L.A. Times:

‘Countrywide Bank sent mortgage brokers a list on Jan. 25 that categorized hundreds of counties as soft markets with rankings from 1 to 5, in ascending order of perceived risk. In areas rated in Categories 4 and 5 -- roughly 100 counties in metropolitan areas nationwide -- Countrywide said it would now require larger down payments from most applicants.

‘If a loan program previously allowed a minimum 5% down payment, applicants will now be required to come up with double that amount -- 10% -- to qualify.

‘Riverside and San Bernardino counties are both ranked as Category 5, and Los Angeles, Orange, San Diego, Ventura and Santa Barbara counties are in Category 4.’

Is it fair to borrowers if lenders label an entire county as risky when the risk is concentrated in certain parts of the county? Probably not. Ted Grose, president of Los Angeles-based 1st Mortgage Advisors Inc., said labeling entire counties as declining is ‘’ridiculous -- it totally fails to distinguish between areas where prices are rising or relatively stable and other neighborhoods or communities where they are not.’’

But on the other hand, if you are Countrywide, now would be a good time to start being more cautious.

Your thoughts? Comments? Insights? E-mail story tips to peter.viles@latimes.com.