Illegal aliens' role in housing crisis is understated

By Eric Ingemunson | 07/06/09 | 11:29 PM EDT |

It's said that when your neighbor loses his job it's a recession and when you lose yours it's a depression. A great deal of truth can be found in this in the sense that the closer a phenomenon hits to home, the more common the phenomenon is.

The illegal alien crisis hit very close to my home. More specifically, it hit right next door to the house in which I grew up in central Simi Valley. A few years ago, our longtime neighbor cashed out, sold the house for $600,000 and moved to New Mexico. The new owners kept to themselves and were friendly enough in our limited interactions with them (they didn't speak very much English and we don't speak much Spanish), but we noticed a lot of cars parked in front and a lot of people coming and going. From our backyard, we could see what looked like adobe huts springing up in the backyard, and realized that a population of illegal aliens were living in them.

My wife and I were house-hunting and inquiring about properties in the neighborhood, and we found out that the house is now in foreclosure. A quick check of public records revealed that the owners purchased the house for $500,000 about a year-and-a-half ago, and we later learned that they put about $30,000 down (which they lost). The house is probably now worth about $300,000, so the bank got screwed out of about $170,000. Our longtime neighbors on the other side were in the process of selling their house about the same time the other neighbor was going into foreclosure. They were going to sell for about $480,000 but the nearby foreclosure drove the final price down to about $460,000, so they lost about $20,000.

The illegal aliens were evicted, and the house stood vacant for months and months, becoming a bit of an eyesore. Finally, just a couple of weeks ago, a cleaning company showed up to get the house ready to be put on the market. The company employee told us that we wouldn't believe some of the things he's seen in terms of multiple families in one house. I bet we would.

How much have illegal aliens contributed to the foreclosure crisis? This is vastly under-reported, but Michelle Malkin gives us an idea in a 2008 column in the New York Post:

The Washington Post noted in 2005: "Hispanics, the nation's fastest-growing major ethnic or racial group, have been courted aggressively by real-estate agents, mortgage brokers and programs for first-time buyers that offer help with closing costs. Ads proclaim: "Sin verificacion de ingresos! Sin verificacion de documento!" - which loosely translates as, 'Income tax forms are not required, nor are immigration papers.' "
Fraudsters also have engaged in house-flipping rings using illegal aliens as straw buyers. Among many examples the FBI cites: a conspiracy in Las Vegas involving a former Nevada First Residential Mortgage Company branch manager who directed loan officers and processors in the origination of 233 fraudulent Federal Housing Authority loans valued at over $25 million. The defrauders made and submitted false employment and income documentation for borrowers; most were illegal immigrants from Mexico. To date, the FBI reported, "Fifty-eight loans with a total value of $6.2 million have gone into default, with a loss to the Housing and Urban Development Department of over $1.9 million."

And what happened after the illegal aliens next door got evicted?

They moved one house down.

http://www.redcounty.com/illegal-aliens ... nderstated