Thread: Foreclosed houses used to hide illegal immigrants in Phoenix

Foreclosed houses used to hide illegal immigrants in Phoenix, Ariz.

September 21, 2008
BY SEAN HOLSTEGE | ARIZONA REPUBLIC/SHNS

PHOENIX - That empty foreclosed home down the street today could be a haven for immigrant smugglers tomorrow.

A comparison of data on foreclosures and properties known as drophouses in the Phoenix metropolitan area shows that wherever homeowners are in financial distress, ‘‘coyotes’’ are probably lurking. The smugglers use rental homes known as drophouses to stash illegal immigrants long enough for payments to arrive, then release them to go on their way.

The largest concentrations of Phoenix-area drophouses are in the same neighborhoods that have the largest share of foreclosures, the data shows.

In addition, of the 41 Phoenix-area drophouses investigated for violence in the past year, 12, or nearly 30 percent, were in foreclosure when they were raided.

The weakening housing market and tighter border security make perfect conditions for drophouses to flourish in Arizona, with more than 600 raided in the Phoenix area since 2005.

Landlords have repeated the same story to federal agents and Phoenix detectives: They rushed to rent their homes to be able to make mortgage payments and stave off foreclosure.

Last October, 34-year-old Karla Solano was one of those feeling desperate. She owned three investment properties and had lost her job as a mortgage-loan officer. Home values were falling and her bank was preparing to foreclose on a south Phoenix house she owned. It had been vacant for a month.

Solano put a for-rent sign in front of the four-bedroom home. Days later, three men who looked like construction workers and seemed honest said they were interested. She asked for cash to avoid being burned by a bad renter. They paid $1,300.

Four days later, police got an anonymous tip and raided the house. They found 20 illegal immigrants. One said he had been punched and kicked and told at gunpoint that he would be dumped in the desert if he didn’t pay a $2,500 extortion fee. The coyote eventually was convicted.

Solano said it was an ugly experience. Police grilled her for information and asked for paperwork. She was not a suspect in the case. She feared the smugglers might come back.

‘‘Maybe they thought we called the police and could come looking for us,’’ she said.

Two months after the raid, the bank took the house.

Another problem for landlords is that typically, drophouses are trashed by the time authorities raid them, investigators say. ‘‘Most (smugglers) are opportunists. They see a for-rent sign or an advertisement,’’ said Special Agent Armando Garcia of U.S. Immigration and Customs Enforcement. ‘‘Ninety percent of the time, the owners don’t want to rent to coyotes. Most usually are unaware of what’s going on until we go in and kick in the door.’’ Investigators say they have seen an increasing connection between drophouses and foreclosures in the past year.

A year ago, they noticed a small flurry of drophouses in newer subdivisions on the outskirts of the Phoenix area. They were the same areas where overextended buyers were beginning to lose their homes. More recently, foreclosures and drophouses have been showing up in higher concentrations in traditional urban immigrant neighborhoods.

The housing crisis also is creating a rise in the number of rental homes, offering smugglers more choices. The number of rental properties registered with the county assessor’s office in Maricopa County, where Phoenix is located, rose 27 percent, to 20,836, in the 12 months ending in August 2008. Tens of thousands of other rental properties go unregistered.

‘‘There will be more rental availabilities, and it will lead to more drophouses because those people renting out their properties are going to be almost as desperate as the people crossing the border,’’ said Assistant Special Agent in Charge Patricia Schmidt of Immigration and Customs Enforcement.
http://www.suntimes.com/news/nation/117 ... 08.article

Does anyone in these banks even know the condition of the homes they foreclose on? And I don't understand why banks don't hire rental agencies to put these properties on the rental market themselves, with the demand they only rent to American citizens. As a former rental agent for furnished vacation rental properties, we had to go in to inventory for the required amount of teaspoons and towels left every six months. Of course, none of this property was under threat of foreclosure.
The biggest kick I got was after my FL mortgage was sold for the sixth time to a bank in Rochester NY. They demanded I up the insurance on the dwelling about 45%. The were using their rule of thumb that the home is worth 85% more than the land it sits on. Well, the land under my dwelling was worth more (canalside one and a half blocks from the beach) than the little cheaply built house that sat on it. Sent them my tax assessment printout with an eloquently written letter and never heard from them again.
Even in the 1980s in FL real estate school, one of the large banks in NY had loaned a FL developer millions to develop a hotel. The developer included lots of photos of work with every request for a draw for construction. It took them a while to realize that the proof of building they were getting was of the building across the street.

I remember years ago, like maybe 15 or 20, there were stories of illegals just moving into vacant houses, living there, sometimes starting fires, etc.

We saw a house in a city once that had the stickers on it the city puts up when a house is considered unfit for human occupancy. There were clearly people living there, cars in the driveway, toys in the yard.

They were getting their electricity directly from the pole. It was a huge wire, like you use to wire for mobile homes. It ran down the pole, and across the yard about 3 feet above ground, and into a hole drilled in the side of the house.

Now this was in a town. There were neighbors, postmen had to come by, police at some point in time, meter readers, garbage men. It seems no one said anything. If they did, nothing was done. We talked with the neighbor and he said they had been there months.