Will Fannie Mae "Declining Market" Restrictions Be Seen as Redlining?

Fannie Mae has advised lenders of a number of restrictions on loans made in "declining markets". (For example, several news sources like the one HERE are saying that Denver has been determined to be a Fannie Mae "declining market").

Fannie Mae's Declining Markets web site is HERE. From it one learns that:

1. There is NO published list of Fannie Mae declining markets that I can find. Lenders can only find out if their loan is in a declining market area through interaction with Fannie Mae's automated Desktop Underwriter software.
   
2. Fannie Mae FAQ's about declining markets clearly signals that the geography of a declining market MAY extend to the zip code or census track levels, saying:
   

"How does Fannie Mae define a declining market? There is no standard definition of a declining market. In general terms, Fannie Mae defines a declining market as one in which home prices are currently declining, as determined by the tracking of home prices in a certain geographic location (state, Metropolitan Statistical Area, ZIP code, census tract, etc.). Organizations or services that track declining markets may each use different approaches and databases to make their determination."

With this non transparent/secret Fannie Mae designation of declining markets, and the door opened by Fannie Mae to declining market designation at the zip code or census track level, it seems highly likely that consumer and civil rights advocates will soon raise the issue of Fannie Mae redlining by geography. This will be especially likely if it turns out that declining market areas have significant minority populations.