Any more suckers in line?

Discussion in 'Economics' started by lilboy716, Aug 10, 2005.

  1. one last desperate move to hold up the housing market.

    some poor & honest people are going to be bag holders in the near future.

    LA Times article:;_ylu=X3oDMTBiMW04NW9mBHNlYwMlJVRPUCUl

    Despite Illegal Status, Buyers Get Home Loans

    By Anna Gorman Times Staff Writer Tue Aug 9, 7:55 AM ET


    Across the country, particularly in Texas and parts of the Midwest, hundreds of illegal immigrants have bought homes using special lending programs that bypass the need for a Social Security number. Now, with backing from some of the country's largest financial institutions, this newest effort to tap customers for the real estate market is moving to the nation's largest concentration of illegal immigrants — California.


    But for years, because qualifying for a mortgage required a Social Security number, the only way for an illegal immigrant to do so was by using a false number. In addition, such immigrants often were rejected or overlooked by legitimate lenders, leaving them vulnerable to fraud.

    Lenders have a powerful incentive to find ways to get around those barriers: tens of thousands of potential customers. The National Assn. of Hispanic Real Estate Professionals estimates that more than 216,000 undocumented immigrants, including many who have been in the country for decades, could buy homes if they had better access to the market.


    Many illegal immigrants cannot make the down payments or prove they earn enough to pay a mortgage in the state's pricey markets. Those who have been able to find affordable homes have bought in places such as Bakersfield.


    Some banks are reluctant to take the risks involved in the illegal-immigrant market. "If someone were to get deported, what happens?" said Cynthia Mendoza, an account executive with Bank of America. "It's a loss to the bank."

    In addition, large underwriters such as Fannie Mae and Freddie Mac aren't buying the loans, so the banks must keep them. A spokesman for Fannie Mae said the company recently reviewed its policies at the request of several lenders but decided not to make any changes, citing "complex and evolving" U.S. immigration laws.

    But other financial institutions say the risk is worth taking.

    They are being urged on by one of the nation's chief banking regulators, the Federal Deposit Insurance Corp. Eager to guard against predatory lending practices, the FDIC is encouraging banks to reach out to the Latino population — both documented and undocumented. The loans based on tax identification numbers are one way to do that.

    FDIC officials predict that despite the slow start, the loans will take off in California, with its huge illegal-immigrant population.

    "It happened in Chicago," said FDIC spokeswoman Linda Ortega. "And it will happen in Los Angeles."

  2. WOW

  3. all of a sudden they're being nice guys?
  4. i remember watching that CNBC real estate show sometimes during the spring. those guys in the real estate business talked about how new immigrants would be buyers in this market. if the current trend is going after undocumented immigrants, i guess the documented immigrant populations either have loaded up with properities or are priced out.
  5. Perhaps I am misunderstanding this, but if an immigrant is illegal (undocumented), by receiving a loan wouldn't they then be documented? They are still living here illegally; it seems like an inevitable loss to the banking industry because if the INS does its job and deports these illegal homeowners, then the banks will have to eat a loss on each one.

    The article states that most of these immigrants have been "stuffing money under mattresses for decades." I wonder how they determined this? From my experience, a good portion of an illegal immigrants incomes are sent back home. They are a tremendous lending risk, regardless of one's opinion on the immigration situation. In most cases I've seen personally, they are involved in unskilled, under-the-table labor. They have no insurance. Also, they usually make absolutely minimal pay. So if that illegal carpenter falls off the roof, they can't pay the mortgage. Also, how can the bank verify assets and incomes with no suitable documents? This seems like the definition of high risk lending.

    In the end, either the idea of legal/illegal immigrants will be abandoned (if illegal immigration is not enforced, it will send a message that it had become informally legal), or the banking system (and the California housing market) is in for a hell of a shock.
  6. These are good points and the only intelligent solution is amnesty and a new immigration system. Otherwise these people will be unaccountable. There are many other reasons why it is the best solution, but this requires out-of-the box thinking and not prejudices that many Americans have against immigration (illegal or not). In part, the illegal nature of immigration is due to the moronic immigration system this country has. Canada, for instance, has a much better and clearer immigration system that favors skilled workers. The American immigration system seems to favor illegal immigration in the form of unskilled workers and so no wonder that this has become such a big problem. The only solution: amnesty and creating a new immigration system similar to Canadian.
  7. Farside


    I've got some bad news for you all.

    A recent edition of Fortune went into detail about illegal immigrants, and the business of serving them.

    The Mexican consulate in this country issues an ID card that substitutes for a social security #.

    With this document, an illegal can get a Drivers license, credit cards, mortgage loan, etc. They can even legally work here, and pay taxes. That's why the govt. wants to push for an amnesty. There is no such thing as an illegal alien anymore, at least for the Mexicans.
  8. Webster's......3 entries found for illegal.
    il·le·gal ( P ) Pronunciation Key (-lgl)
    Prohibited by law.
    Prohibited by official rules: an illegal pass in football.
    Unacceptable to or not performable by a computer: an illegal operation.

    An illegal immigrant.

    How can an "illegal immigrant" get a mortgage? By definition, it is ILLEGAL for him to be here.