Thread: Story About '5 Million Illegals' Holding Bad Mortgages...

Story About '5 Million Illegals' Holding Bad Mortgages Debunked by HUD

October 9, 2008

HUD cries foul over illegal immigrant mortgage data

Phoenix Business Journal
by Mike Sunnucks

The U.S. Department of Housing & Urban Development says there is no basis to news reports that more than 5 million bad mortgages are held by illegal immigrants.

A HUD spokesman said Thursday his agency has no data showing the number of illegal immigrants holding foreclosed or bad mortgages.

But news reports, including one aired on KFYI-AM 550 in Phoenix, cite HUD as a source for the illegal immigrant mortgage number. The widely read “Drudge Reportâ€

Hi Jean,

Originally Posted by jean

The U.S. Department of Housing & Urban Development says there is no basis to news reports that more than 5 million bad mortgages are held by illegal immigrants.

Woah, Jean, time out.
According to a radio broadcast and Rush today, HUD made the discovery that 5 million illegals were the mortgage holders.
So HUD discovered it, and HUD's denying it? What the hell?

Originally Posted by Dave Hughes

Now I don’t know about the numbers because if you take even a modest home on $100,000 and multiply that by 5 Million, you end up with 500 Billion. Now lets say that these illegal aliens were only buying small houses in poor urban areas worth only about $50,000 each. THAT’S STILL 250 BILLION DOLLARS!!! That’s about a third of this bailout bill!

Remember people. The democrats were the ones that were pressuring Fanny May and Freddie Mac to give these loans to people who couldn’t afford them.

http://www.godlikeproductions.com/forum ... 631757/pg1

Jean, here's a heart-warming story about just one illegal homeowner!

Illegal-Alien Career-Criminal hits the Jackpot -
with a USD $44,000 Job, a House, and a Crime Spree!

"Let's all go meet our new neighbors!"
Entire story: http://www.antioffshore.org/index.php?o ... 8&Itemid=2

A HUD spokesman said Thursday his agency has no data showing the number of illegal immigrants holding foreclosed or bad mortgages.

Illegals should not be holding mortgages in this country to begin with.

Further, you expect me to believe that HUD has no date on the number of loans they gave out to people with no social security number, or were given out based only on a tax identification number!

I have a feeling that HUD knows EXACTLY how many illegals are holding home loans in this country. If they don't, then they truly are incompetent and a great many of these people need to lose their jobs!

This is just HUD alone how many in all of the US????

American Financial Group Prospers by Serving the Hispanic Community
Mortgage Broker American Financial Group Helps Latino Community Capture the American Dream

CERRITOS, Calif.--(BUSINESS WIRE)--American Financial Group has achieved great success in today’s challenging mortgage environment by working with the Hispanic Community.

According to the National Association of Realtors the number of Latino home owners in the U.S. vaulted a staggering 81 percent between 1995 and 2005.

Ironically, American Financial Group’s Co-Founder, Vince Tran, is a Vietnamese immigrant. Tran arrived in Orange County as a young man who did not speak English and was virtually penniless. Because of that background the Company has its roots in the minority community, and has always been very sensitive in serving the unique needs of local immigrant communities including the Hispanic community.

Approximately half of American Financial Group’s loan officers speak Spanish. Many of American Financial Group’s Latino Loan officers worked their way up in the organization and have become very successful. A large proportion is women. One 25-year-old Hispanic loan officer retired her mother last year and pays her a salary to take care of her young daughter.

The Company operates on a “customer for lifeâ€

HotPads compiled a list of the top ten congressional districts with the highest foreclosure rates in the country showing that seven of those districts are in California with five of those in Southern California.

While District 18 represented by Dennis Cardoza in Northern California takes the top spot on the list,

Mary Bono Mack's 45th District stretching from Riverside County to beyond Joshua Tree takes second.

Nearby, the mostly San Bernardino County 43rd District earned itself fourth place on the list with Joe Baca at the helm.

Rounding off the list of SoCal districts at spots six through eight are Jerry Lewis' large San Bernardino to the Nevada state border 41st District,

Howard "Buck" McKeon's Santa Clarita/Antelope Valley 25th District

and Ken Calvert's Riverside/Orange County 44th District.

All representatives are Republicans who voted yes on both bailout votes, save for Baca who is a Democrat that originally voted no on the bailout, but later switched his vote last Friday.

http://laist.com/2008/10/07/50_of_top_1 ... ure_di.php

The Subprime Mortgage Crisis: California at the Epicenter of National Foreclosures

The first in a series of three articles

Testimony of Paul Leonard
California Office Director
Center for Responsible Lending

Before the U.S. House of Representatives House Financial Services Committee
Subcommittee on Housing and Community Opportunity
November 30, 2007

[Editor's note: This is an issue of great importance to the economic well being of California. As we reported last week, Democrats in Sacramento are proposing a package of legislation and the Governor, mayors around the state, and other elected officials are calling for action. Last Friday, U.S. House of Representative Maxine Waters of Los Angeles held hearings on what can be done to keep families in their homes and took expert testimony, including that of Mr. Leonard. Here is the first part of Mr. Leonard's testimony. There will be two other installments published tomorrow and Thursday.]

First, I wish to thank Chairwoman Waters, Ranking Member Capito and Members of the Housing and Community Opportunity Committee for convening today’s hearing, and for inviting the Center for Responsible Lending to testify. The timing for this hearing, focusing on current borrowers, could not be better.

I am Paul Leonard, California Office Director of the Center for Responsible Lending (CRL). CRL is a not-for-profit, non-partisan research and policy organization dedicated to protecting homeownership and family wealth by working to eliminate abusive financial practices. CRL began as a coalition of groups in North Carolina that shared a concern about the rise of predatory lending in the late 1990s. Today CRL works closely with a broad range of civil rights, labor and consumer organizations at both the federal and the state level to provide for safe, sustainable and affordable homeownership. And I can honestly tell you that we look forward to working with you, Madam Chair, to make sure that every homebuyer has access to credit with fair prices and fees and adequate consumer safeguards.

CRL is an affiliate of Self-Help, which consists of a credit union and a non-profit loan fund. For the past 26 years, Self-Help has focused on creating ownership opportunities for low-wealth families, primarily through financing home loans.

Self-Help has provided over $5 billion of financing to over 55,000 low-wealth families, small businesses and nonprofit organizations in North Carolina and across the country, with an annual loan loss rate of under one percent. We are also a responsible subprime lender. In addition to making direct loans, Self-Help encourages sustainable loans to borrowers with blemished credit through a secondary market operation. We buy these loans from banks, hold on to the credit risk, and resell them to Fannie Mae. We have used the secondary market to provide $4.5 billion of financing to 50,000 families across the country, loans that have performed well and significantly increased these families’ wealth, giving many families their chance to rise into the middle class.

I want to make three main points today:

• First, California is the epicenter of the national foreclosure crisis.

• Second, while loan modifications hold the greatest promise for avoiding foreclosures and keeping people in their homes, the results to date have been disappointing.

• Third, broader changes are needed from industry and policymakers in order to assist the largest number of borrowers in avoiding foreclosure.

I. California is the Epicenter of the Subprime Foreclosure Crisis

Because of reckless lending practices in the subprime market and voracious investor demand for the resulting loans, 2.2 million families nationwide—and nearly 500,000 in California—have lost or will lose their homes to foreclosure, according to CRL estimates from last December. These foreclosures already are occurring in record numbers, and the worst is still ahead.

The cost of the subprime problem extends far beyond the families who lose their homes. Millions of other families—who diligently paid their mortgages—will be hurt by declines in property values spurred by nearby foreclosures and a weaker housing market. CRL’s recent report, Subprime Spillover found that nationwide foreclosures cost neighbors $223 billion, with average individual property value loss of $5,000. In California, that total number is $67 billion, with an average individual property value loss of more than $8,000. Three million Los Angeles County homeowners will lose $30 billion in property value as a result of neighboring foreclosures.

Foreclosure Data Are Ominous

Since the beginning of the year, hardly a week has gone by where new and increasingly ominous reports and press accounts of the mounting foreclosure crisis are not prominently featured on front pages across the state and the country.

• A panel at the Milken Institute’s prestigious State of the State conference debated the impact of the crisis on California’s economy. One economist predicted the housing crisis would lead California’s economy into recession. Panel members, including chief executives of KB Homes and Countrywide all agreed that housing prices in California would decline by at least 10 percent in the next 18 months. Rick Orlov, “Foreclosures, Housing Slump, Hurting California Economy.â€

Street of broken dreams

Sunday, August 12, 2007

Foreclosures and forced sales mar West Camile Street.
By JOHN GITTELSOHN and RONALD CAMPBELL



THE ORANGE COUNTY REGISTER
Comments 6| Recommend 15

The frenzy of subprime lending that pumped billions to lenders and Wall Street investors has devastated West Camile Street, where working-class families signed up for risky home loans they thought would bring them the American dream. (VIDEO: Go inside some of the homes on the street.)

An Orange County Register investigation found that lenders targeting Hispanic buyers wrote $19 million in loans on this modest Santa Ana block of 1920s bungalows, where roses and jasmine bloom behind white picket fences. Those loans helped nearly triple sales prices from $182,000 to $600,000 over five years. Some owners got cash out. Others sold for big profits.

Then the credit stopped. And home values crashed.

Lenders seized the homes at 920 and 946 after owners failed to keep up with payments. 946 sold at a loss, and 920 is in escrow at a loss. Lenders also filed default notices against the owners of 926 in April and 937 in June. "For Sale" signs hang outside five of the remaining 48 homes. Desperate to escape escalating payments, the owners of 937 and 1033 have slashed prices.

A year ago, Angelita Medina Albarran, 47, a garment worker at St. John Knits, took out two loans from Fremont Investment & Loan to cover the entire $600,000 purchase price for 919 W. Camile St., a 1,450-square-foot bungalow. Her five grown children help pay the mortgage – $4,000 a month and scheduled to rise in May.

"La droga," Medina Albarran said. That's Spanish for "drug" – Mexican slang for a crippling debt. The people of West Camile Street, she said, are "endrogados" – hooked on debt.

A Register analysis of federal housing data pinpointed West Camile Street as a center of the subprime borrowing binge. In 2005, 75 percent of the home loans in the surrounding census tract were subprime.

That's the highest concentration of subprime loans in Orange County and one of the densest in California. More than 200 neighborhoods in California, particularly in south Los Angeles and the Inland Empire, were similarly dependent on subprime lending. So were at least three dozen counties in other states.

For these places the story of Camile Street is a warning of things to come.

On Camile Street every variety of la droga is on display: adjustable-rate loans with low teaser payments that quickly escalate; prepayment penalties so large that homeowners cannot refinance; "piggyback loans" so low-income buyers can own a house with no money down. All are described in long, complex documents that many Spanish-speaking buyers cannot read.

The Register found that the brokers and lenders gave little consideration to the long-term performance of a loan or to borrowers' future. Subprime loans became the dominant source of funding for black and Hispanic buyers. Now the hidden costs of these loans are coming due, blighting neighborhoods as surely as any drug plague.

Residents, many of them former renters, saw the loans as a path to middle-class stability. Some did not understand the loan documents they signed. Others saw the risk but counted on being able to refinance before payments got too heavy.

From April through June a record 17,408 California homes were lost to foreclosure, according to DataQuick Information Systems, a La Jolla real estate tracking company. The Center for Responsible Lending, which opposes predatory lending, estimates that 23 percent of subprime mortgages made in Orange County last year will end in foreclosure. That would be about 2,500 of the 11,000 homes bought with subprime mortgages, or 7 percent of the 36,000 homes bought last year in Orange County.

For West Camile Street residents like Medina Albarran, the outlook is dire.

During the boom years, finding another loan with another low-interest teaser rate was easy.

But now interest rates are rising, driving up the cost of borrowed money. With property values falling, lenders are reluctant to offer 100 percent loans like the ones she and many of her neighbors got. At the insistence of federal regulators, lenders now demand proof of income, bigger savings accounts and higher credit scores.

With neighbors asking $150,000 less than Medina Albarran borrowed a year ago, the situation has become almost hopeless.

Even if Medina Albarran can somehow refinance, she said, she faces a prepayment penalty on her loan. She wouldn't say how much the penalty is, but prepayment penalties typically exceed 3 percent of the loan principal. For her that would be more than $18,000.


'House of cards'

Subprime lenders have long argued that their mortgages have helped millions of Americans who might not otherwise have been able to buy a home do so – people with poor credit, spotty work histories or unreliable incomes.

That's true.

But now there are hundreds of thousands of borrowers who can't repay their loans.

Why would lenders make loans customers can't afford?

The answer is that none of the loan professionals had a long-term stake in the borrowers' ability to repay the mortgages.

The brokers made their money closing loans.

The lenders made their money reselling loans to Wall Street investors.

The investors got high yields with little risk, as long as most homeowners could refinance or sell at a profit.

Subprime loans ignited a frenzy of deal-making on West Camile Street. From 2000 through 2006, 14 of the 48 homes changed hands, some repeatedly. The owners of those 14 homes and three others piled up 79 mortgages from 48 lenders.

"This was a house of cards. The loans were betting on continued housing price appreciation, with the likelihood that the loans would have to be refinanced," said Paul Leonard, California director of the Center for Responsible Lending.

"The biggest price is being paid by the borrowers, who were put into loans they never should've been under the guise they could be long-term homeowners," he said. "And now they're faced with losing their equity and having their credit destroyed and, in fact, with losing their homes."

As prices soared, everyone wanted in. Then prices started to slide, and everyone wanted out.

Mortgage defaults soared. Wall Street cut off credit to lenders who had sold them bad loans. Dozens of lenders shut their doors, laying off 5,000 in Orange County alone. Foreclosure rates exploded.

A 2006 Fannie Mae report estimated that a single foreclosure reduces neighborhood home values by almost 1 percent. In the 92703 ZIP code, which includes Camile Street, 110 properties are listed in foreclosure by RealtyTrac, an Irvine company that tracks distressed properties.

Many on Camile Street are caught in the downturn.

In January 2006, Maria and Gregory Vertiz paid $591,000 for 937 W. Camile St. using 100 percent subprime financing. The lender filed a default notice in June after the couple missed $14,000 in payments. The house is on the market with an asking price of $420,000 – a 29 percent drop.

The bank foreclosed last year on 920 W. Camile St. Property records show the last owner paid $565,000 in November 2005, using 100 percent financing from America's Wholesale Lender, a subprime subsidiary of Countrywide Home Loans. The house is in escrow for $449,000 – a 20 percent drop.

Another bank repo is the 1922 Craftsman-style bungalow advertised as a two-bedroom, one-bath at 946 W. Camile St. It still has the original hardwood floors, built-in cabinets and a faux fireplace surrounded by green tiles. But the last owner added four bedrooms and two toilets without permits in an effort to pack in more tenants to help pay the mortgage.

The home is vacant, its exterior tagged with gang graffiti.

It sold July 31 for $425,000, a 17 percent loss.

Keeping it difficult

Fremont Investment & Loan offered 100 percent financing for the house at 946, among at least six mortgages the Brea-based company sold on the block. In March, the Federal Deposit Insurance Corp. ordered Fremont to close its subprime arm, because it issued predatory loans that borrowers couldn't repay.

Eight mortgages on the block were sold by Ameriquest Mortgage Co. and other subsidiaries of Orange-based ACC Capital Holdings. That company paid $325 million in 2006 to settle predatory-lending investigations in 49 states.

Other subprime lenders on the block included now bankrupt New Century Financial and People's Choice Home Loan, both of Irvine. ConquistAmerica of Santa Ana, Option One of Irvine and Quick Loan Funding of Costa Mesa are other troubled Orange County subprime lenders that issued mortgages on Camile.

Located in one of Orange County's most Hispanic census tracts, Camile Street was an attractive market for subprime lenders: In 2005, 56 percent of Hispanic and 57 percent of black California homebuyers used subprime loans.

In December 2004, Ada Duque, a native of Mexico City and single mother of two who works in a printing plant, bought 927 W. Camile St. with two loans totaling $425,000 – 100 percent financing. She refinanced in January 2006 with a $460,000 subprime loan from American Mortgage Express Financial. She said she pays about $2,500 a month.

Her loan is an example of the increasingly complex mortgages conceived by lenders involving low, interest-only initial payments that push the true cost of borrowing into the future. Fourteen homes on the block have mortgages with adjustable interest rates that can go as high as 11.75 percent.

Six homes received 100 percent financing – a 30-year first loan covering 80 percent of the value and a "piggyback" 15-year mortgage covering the other 20 percent. Seven home loans feature interest-only payments for up to five years, followed by balloon payments. Others let borrowers pick their monthly payment, while the principal, or total loan size, increases through a setup called negative amortization.

Property records show Duque's negative-amortization loan allows the principal to grow to up to $529,000 with an interest rate cap of 9.95 percent. That would raise her monthly mortgage to $4,800, nearly double her current payments.

Like many Camile homeowners, Duque said she shopped long and hard to find a house to buy but spent little time looking for financing. She said she never read the mortgage contracts because they were in English, which she doesn't speak fluently.

"There were so many papers, I just signed them," she said in Spanish.

Habit sinks in

Some property owners became serial refinancers, using their home as a piggy bank and digging themselves deep in debt.

In 2002, Hugo Guzman Roque and Patricia Noyola took out a $241,000 mortgage to buy the house at 1033, property records show. In 2003, they refinanced with Novastar Financial, in 2004 with Orange-based Argent Mortgage Co., in 2005 with Fremont Savings & Loan and finally in 2006 with People's Choice for $594,000.

Roque and Noyola are now desperate to sell, asking $600,000, down from $660,000 in March.

"That street is crazy," said their real estate agent, Jaime Ceballos of Santa Ana. "Everybody wants to move out."

Even seasoned real estate investors got caught. In August 2005, Greg Ovanesian paid $601,000 for a duplex at 1003 W. Camile St., one of seven investment properties he bought in Orange County. Ovanesian put down 10 percent and borrowed $541,000 from Countrywide. He planned to flip the property after a year. It took nearly two years before he sold it in late July for $709,000.

"I got out of a messy situation without losing money," said Ovanesian of Fountain Valley.

The only ones who seem content are longtime residents like Rafael Zambrano, who moved to 930 W. Camile St. in 1988. The chef and father of four said he has nearly paid off his $177,000 mortgage. He has a low opinion of the people who loaned money to his neighbors and the neighbors who borrowed beyond their means.

"I never sell. I never refinance," Zambrano said. "I don't take money out of my house to buy a car or take a vacation. I'm not stupid."

Register staff writers Doris Benavides, Mathew Padilla and Robert Whitfield contributed to this report.
Contact the writer: 714-796-7969 or jgittelsohn@ocregister.com

http://www.ocregister.com/money/loans-c ... prime-loan

Foreclosure specialist John Thompson checks on properties in Manassas's Georgetown South community, where more than 35 homes are in foreclosure. (By Tracy A. Woodward -- The Washington Post)


REAL ESTATE

N.Va. Foreclosures Form 'Ring of Fire'

Chain of Housing Crisis Hot Spots Indicates Disparity in Market Downturn

But drive with Thompson through the hardest-hit areas of Prince William County -- the epicenter of the region's foreclosure trouble -- and the loss of value has been precipitous.

"That one's listed at $125,000," Thompson said one recent afternoon, sizing up a dowdy green rambler in Manassas Park that had been foreclosed on. It wasn't the fanciest house on the block, but it wasn't a shack. Two years ago, homes in the neighborhood were selling for $300,000 to $400,000, Thompson said.

On a tour of Manassas and Manassas Park, Thompson pointed to telltale signs of foreclosure: utility notices posted on windows, newspapers yellowing in the driveway, realty signs staked in the lawn. On some blocks, every third or fourth house sat empty.

The losses in value have been extreme. A townhouse in Manassas was being offered at $94,900 even though it was assessed at $253,900. Dozens of bank-owned properties were listed for less than $150,000, far below their assessed worth.

"Banks are slashing prices, and that's causing value of properties to go down with every sale," Thompson said, noting that every time a bank unloads a house at a steep discount, it further devalues other houses in the area that it might also own, fueling the downward spiral.

Still, only a small portion of Prince William homes are in foreclosure, he and others said. There were 3,344 foreclosures in Prince William last year, according to county data, up from 282 in 2006 and 52 in 2005.

A report by economist Stephen Fuller of the George Mason University Center for Regional Analysis found that 5.5 percent of Prince William housing units were in some state of foreclosure by mid-February, a rate twice that of Loudoun County's, Northern Virginia's second-highest. No major metropolitan area in the country had a foreclosure rate that high in the last quarter of 2007 -- not even Detroit -- according to Fuller's data.

By and large, those properties are concentrated in lower-priced areas and Zip codes where many immigrants bought homes in recent years, often with subprime mortgages and other risky arrangements that required little down payment or documentation. In Northern Virginia and especially Prince William, many buyers were Hispanic immigrants.

"With the Hispanic community, we had a huge boom in the last few years," said Jose L. Galdos, who recently shut down his settlement company in Woodbridge and laid off his staff, having lost 85 percent of his business in the past year.

"A lot of them had adjustable rates," he said. "A lot of them are walking away from those mortgages now."

Thompson, Galdos and several other real estate specialists in Northern Virginia estimate that 70 to 80 percent of foreclosure cases they see involve Hispanic families. The number of Hispanic surnames in the trustee notices in the classifieds sections of area newspapers appears to confirm the observation.

"What they tried to do was smart. You can't make it in America unless you get into home ownership," Thompson said. "But their timing was bad. They bought at the end of the boom. They were pursuing the American dream, and now it's crashing down around them like an American nightmare."

With the interest rates on adjustable-rate mortgages escalating and job opportunities for immigrants squeezed by a construction slowdown, many families are simply walking away, sacrificing their credit to save their finances.

"Most of the people I deal with are responsible people who are trying to find a way out," Manassas real estate agent Maribel Alvarez said. "Some of the banks are willing and do not want to foreclose on a home, but they're very limited because the homes are so far off what the person owes."

Real estate agents say the foreclosure crisis in Prince William has been exacerbated by local authorities' efforts to crack down on illegal immigrants. They warn that the campaign might have other, more far-reaching economic consequences if homeowners continue to default.

Whether out of fear or the perception that they are no longer welcome, Latino families who were already struggling financially have little incentive to fight to remain in their homes. Anecdotes abound of Hispanic immigrants leaving the county for Maryland or the Carolinas.

"What can I do? I've got no choice," said Jose Ruiz, 27, a landscaper and illegal immigrant from El Salvador who bought a Manassas condo two years ago for $200,000. He has been making $2,000 monthly payments for his mortgage and condo fees since then, spending most of his monthly income and all his savings. He and his wife worry that they'll be deported or separated from their daughters, ages 3 and 1. But they can't sell their condo, which Ruiz estimates is worth $130,000 in the current market. So they're planning to walk away rather than risk a forcible removal.

Finding enough buyers to absorb the foreclosed properties remains a challenge, and some real estate companies are using gimmicks to lure investors, including "home buyer bus tours" of Prince William neighborhoods. "Don't miss the bus!" touts a flier for a tour that offers a rolling foreclosure seminar.

But market watchers say the foreclosure wave in Northern Virginia will have to run its course before prices can normalize. "The correction will continue, but foreclosure properties will be out of the listing pool," said Jill Landsman, a spokeswoman for the Northern Virginia Association of Realtors.

For most Northern Virginia homeowners, Landman urged patience, emphasizing that many parts of the region were holding their value. "Every neighborhood has its own DNA," she said. "Some neighborhoods are really solvent because of land value, while some are more susceptible to foreclosure activity."

As a whole, she noted, the Washington region was doing much better than other parts of the country, mostly thanks to low unemployment. "All the local fundamentals remain strong," she said.

http://www.washingtonpost.com/wp-dyn/co ... 8032300183

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