Effort to Bar Tax ID for Loans Draws Latino Fire
Posted on Saturday, February 24 @ 16:52:47 EST
Topic: Boycott Bank of America
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 From the Baltimore Sun
Effort to Bar Tax ID for Loans Draws Latino Fire
February 23, 2007
New legislation on Capitol Hill seeks to curb an increasingly popular
mortgage concept: providing home loans to applicants using their
individual taxpayer identification number (ITIN), in lieu of a Social
Security number.
ITINs are issued by the Internal Revenue Service to assist immigrant
workers who do not qualify for a Social Security number - but do have
taxable income - to report their income and pay federal taxes.
Dozens of banks around the country have begun offering home mortgages
to undocumented immigrants using ITINs, but their programs generally
have been low-key and small in volume.
Bank of America stirred controversy this month when it announced a
pilot program in Los Angeles to provide credit cards to resident-alien
customers who lack Social Security numbers but have ITINs.
Some critics charged that the bank was seeking to profit by helping
illegal immigrants who should be deported or prosecuted, not extended
consumer credit. Bank of America said its program is legal and may be
rolled out nationwide if the pilot is successful.
Topics: BoA, BofA, illegal aliens, credit cards, boycott, Bank of
America, Americans, illegal immigration, invasion, border security,
Federal Felony, stop the banks, congress,
ITIN, Internal Revenue Service, illegal immigrant
workers, Social Security number, mortgages, MGIC Investment
Corp.,
Now a bill has been introduced in Congress that would prohibit
financial institutions from providing home mortgages to anyone who
lacks a Social Security number. The bill (H.R. 480), introduced by Rep.
John T. Doolittle, would amend the Truth in Lending Act to make ITIN
mortgage lending illegal.
The California Republican's office released a statement that said in
part: "The government should not be in the business of creating
incentives to encourage illegal behavior. Nor should companies be
permitted to reward those individuals in clear violation of our laws."
Proponents of ITIN-based lending to homebuyers say Doolittle has it all
wrong. Tim Sandos, president and chief executive of the National
Association of Hispanic Real Estate Professionals, said Doolittle's
bill would be "extremely disruptive," and affect far more people than
the illegal immigrants the measure purports to target.
Sandos estimates that there are as many as 7 million to 8 million
resident aliens in the United States who do not have Social Security
cards, but are in some phase of the immigration process leading to
citizenship.
That process can take years - often more than eight years - and
"meanwhile these individuals are working here, earning incomes, paying
taxes, contributing to the economy."
They "are not illegal," said Sandos. "They are undocumented. The
government knows exactly who they are and where they are." Doolittle's
bill, he added, "is the equivalent of trying to drive a tack with a
sledgehammer."
Sandos' group, which is made up of Latino and non-Latino
representatives of banks, real estate firms, developers, homebuilders
and real estate service providers, conducted a study that concluded
that if mortgage companies made greater use of ITINs to extend home
loans to qualified buyers, $44 billion in new mortgages - primarily to
first-time buyers - could be originated.
Geoffrey F. Cooper, director of emerging markets for MGIC Investment
Corp., a major private mortgage insurance firm, said lenders in about
40 states are making mortgages to customers using ITINs. MGIC's role is
to provide insurance against losses to lenders in the event borrowers
default or go to foreclosure.
Cooper said his company's program was initiated at the request of
community banks and other local lending institutions that found that
many of their customers who lacked Social Security numbers - but had
ITINs for tax purposes - earned solid incomes, had stable employment
histories and excellent payment histories on debt obligations.
Under MGIC's program, underwriting standards are strict, with mandatory
documentation of income, assets, residency and other criteria -
stricter standards, in fact, than many lenders impose on applicants who
have Social Security cards.
Homebuyers with ITIN mortgages "perform like 'A' credit borrowers,"
said Cooper, and they qualify for MGIC's favorable "A-premium"
insurance rates because they are so dependable.
Janis Bowdler, senior housing policy analyst for the National Council
of La Raza, an Hispanic advocacy group, said the homebuyers who use
ITIN mortgages should be seen as "hardworking, taxpaying families who
want to participate in the American dream," even if they do not yet
have Social Security numbers because of their immigration status.
Sandos noted that making Social Security numbers mandatory to obtain a
mortgage also could affect the ability of Asian, European, South
American and other foreign investors who simply want to buy a house or
condo in the United States for periodic visits, but not full-time
residency.
That, in turn, could prompt foreign governments to impose restrictions
on the ability of American citizens to buy real estate abroad.
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