Not all states are created equal. According to today’s Wall Street Journal:
Some of the lenders are reducing the maximum combined loan-to-value ratio, a measure of how much of a home’s value a borrower can finance using a mortgage and a home-equity loan. In August, J.P. Morgan Chase’s home-equity division cut the maximum amount borrowers in Nevada can finance to 85% of the home’s value. The unit won’t let borrowers finance more than 90% of their home’s value in seven other states — Arizona, California, Colorado, Florida, Michigan, New Jersey and New York. That compares to a maximum combined loan-to-value of 100% of a home’s value in Texas and Washington and 95% in other states. Chase made the move to reduce the chance that the loans it makes will wind up under water, a company spokesman says.
Citigroup this month cut the maximum amount certain borrowers in "depreciating" markets can finance through a mortgage and home-equity loan. The change applies to borrowers in seven states — including Arizona, California and Florida — who are buying a home or pulling cash out when they refinance. In most of these markets, Citi is reducing maximum financing to 85% of the home’s value. Citi is also reducing by five percentage points the maximum loan-to-value ratio in more than 80 counties in 14 states and the District of Columbia.
