Thread: Immigrants a growing home sales target

http://www.nashuatelegraph.com/apps/pbc ... 5103250036


Holden Lewis, Real Estate Watch

Published: Friday, Mar. 25, 2005

Immigrants are increasingly getting the message: “Welcome to America. Now buy a house.�

An immigrant with a scant credit history? Solvable. A family who wants to pool money to make a down payment? That’s just fine. A borrower who is in the United States illegally? Not an insurmountable problem.

The federal government’s policy is to raise the homeownership rate, and the most efficient way to do that is to concentrate on minorities and immigrants. The white homeownership rate is almost 75 percent. A little less than half of black and Hispanic households own their homes, and the Asian rate is a bit higher than 50 percent.

For years, mortgage lenders have had programs for minorities, especially blacks, that involve relaxed credit standards and neighborhood outreach. Now those efforts are being tweaked and expanded for immigrants. There’s a good reason for that: immigrants head more than one in three new households, according to the Harvard Joint Center for Housing Studies. More than 1.2 million immigrants have arrived every year since 2000. Immigrants are where the housing growth is.

The nation’s biggest mortgage lender, Countrywide, markets aggressively to immigrants.

“The major challenge when we’re dealing with multicultural markets is the educational aspects,� says Rodolfo Saenz, Countrywide’s executive vice president of multicultural markets.

Many immigrants don’t know much about this country’s banking system.

“They don’t really know what questions to ask, how to select the best product, what papers and questions will be part of the application,� Saenz says.

Last year, Countrywide introduced its Optimum Loan program, under which borrower education is just one facet. Optimum combines disparate features of many loan products into one:

- Allowing low or no down payment;

- Supplementing the credit record with “nontraditional� credit;

- Recognizing cash income and rent from housemates;

- Permitting the pooling of money for down payment and closing costs.

Mortgages with low or no down payments are relatively common nowadays. Optimum’s three other features are relatively unusual. Take the nontraditional credit records. A lot of immigrants don’t have extensive credit histories in the United States, both because they don’t have many car loans and credit cards, and because they just haven’t been in the country long enough to establish a track record.

Countrywide and other companies, such as credit-scoring titan Fair Isaac, are creating ways to augment meager credit histories with records of utility payments, rent and even money sent to families abroad. They are finding ways to confirm cash income from services, such as child care and landscaping.

Rent paid by long-term boarders is counted as income. Down-payment money from multiple sources is allowed. This last item is important for immigrant extended families.

Most mortgages are for people who can document that they are in this country legally. A few lenders are experimenting with providing home loans to people who have no such documentation. They are called ITIN loans because borrowers use individual taxpayer identification numbers (ITINs). These numbers are provided by the Internal Revenue Service to people who aren’t eligible for Social Security numbers, but who pay federal income taxes.

Colonial is still developing the loan program, which allows the use of nontraditional credit and recognizes cash income. The mortgages are risky because the borrowers are subject to deportation and the loans can’t be sold in the secondary market. So they have higher interest rates - anywhere from half a percentage point to 4 percentage points higher than for a standard, fully documented fixed-rate mortgage. The loans require substantial down payments.

The program requires borrowers to undergo training in homeownership and budgeting, and they have to have bank accounts, says Gloria Barreto, a Colonial loan officer in Dallas. She says some borrowers have misconceptions about the American banking system.

“Sometimes they think they have to stay in the house for 30 years, until they pay the mortgage off,� she says. “I say, ‘No, you can refinance or sell it.’ �

Undocumented Hispanic immigrants would take out an estimated $44 billion in mortgages if barriers to borrowing were lifted, according to the National Association of Hispanic Real Estate Professionals.

Distributed by Scripps Howard News Service.E-mail Holden Lewis at hlewis@bankrate.com.

AAAArrrrrrgggghhhhhhh!@!@!@!@!@!

I know this to be true as I have some properties on the market. I mentioned this to the agent and he said that illegals are able to get loans .. he doesn't really agree with it either but then he can't discriminate or he's in trouble too. The house, my grandparent's built in 1920 will probably take the way of the neighborhood ... now largely Hispanic. Even though the house is on the corner with a school next to it. I was approached by one Mexican "entreprenuer" family who is buying up property in that area. They pay cash! I can verify that because I know some people who have sold to them. The woman, however, does all the dealings ... the husband doesn't speak English .. and man was she bossy .. so bossy and overbearing she finally got me mad. And they backed out at the last minute. Grrrrr!!!!

When they came to look at the property the whole posse came along, mom, dad, her son, his kids and wife ... I was outnumbered 10-1.

My first direct experience with illegals was in 1980. I lived at the far edge of suberbia back then. A family of Mexican decent purchased a home on the next block. We thought nothing of it. Then they had the entire back yard (1/2 acre) paved and striped into a parking lot!

When INS (remember, this is 1980) raided it, they found in the basement of this 3 bedroom house, 90 cots divided by bedsheets hanging down. They were renting out those cots in 3 shifts . . . INS deported close to 250 illegals from that 1 house.

Originally Posted by Mr_Magoo

My first direct experience with illegals was in 1980. I lived at the far edge of suberbia back then. A family of Mexican decent purchased a home on the next block. We thought nothing of it. Then they had the entire back yard (1/2 acre) paved and striped into a parking lot!

When INS (remember, this is 1980) raided it, they found in the basement of this 3 bedroom house, 90 cots divided by bedsheets hanging down. They were renting out those cots in 3 shifts . . . INS deported close to 250 illegals from that 1 house.

And still people can't understand why we don't want them here! Well, for one thing .. it's a CULTURE CLASH!! and the two cultures will NEVER mesh!

But when these shaky loans default...guess who picks up the tab? The US taxpayer who doesn't seem to have a voice in anything...just pay up and shut up. Really tired of that routine.
RR

Road Runner says...

But when these shaky loans default...guess who picks up the tab? The US taxpayer who doesn't seem to have a voice in anything...just pay up and shut up. Really tired of that routine

.

And the question has to be... do the Banks know something we don't know? And I have to think they do. And I think we will see one very serious slider come out of blue for the third strike on you and me. And I mean it.. I believe that.