Thread: Immigration bill worries real estate professionals

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This story ran on nwitimes.com on Monday, April 24, 2006 12:33 AM CDT

Immigration bill worries real estate professionals

BY MAKIKO KITAMURA
Medill News Service
Hispanic real estate professionals from the Chicago area met with legislators in Washington last week in an effort to counter a provision of the proposed immigration legislation that would hinder undocumented immigrants from purchasing homes.

Realtors say such purchases are occurring more frequently in the Chicago area, and they're encouraging it.

During the 2006 legislative conference of the National Association of Hispanic Real Estate Professionals, Realtors voiced concerns to members of the Congressional Hispanic Caucus about the potential impact of a particular section of the House version of the immigration bill.

That section, which is not in the Senate version, would make it a crime to assist undocumented immigrants in the purchase of a home or engage in financial education of immigrants or consultation with them regarding homeownership, according to Timothy Sandos, legislative chair of NAHREP. This, he said, would discourage the real estate and mortgage industries from doing business with undocumented persons.

"We would prefer that this language be eliminated altogether," Sandos said in an interview.

"I think immigrants should have a right to buy a home just like anybody else," said Basel Tarabein, a real estate broker and owner of RE/MAX At Home in Rolling Meadows, part of RE/MAX International Inc. "We are all immigrants, we just came a little later than everybody else."

Tarabein immigrated from Syria in 1990 and became an agency owner just a year after entering the real estate business in 2000.

Currently, undocumented and legal immigrants can apply at certain banks for mortgages to purchase homes if they have filed tax returns for two years using Individual Tax Identification Numbers (ITINs) issued by the Internal Revenue Service, along with a second form of valid identification such as a passport or matricula consular card, which is a photo ID issued by the Consulate General of Mexico.

An important part of the mortgage approval process is a credit check, using an individual's credit history and credit score. Since many immigrants are unable to build a credit history, the Federal Deposit Insurance Corporation and the Mexican Consulate of Chicago spearheaded a pilot initiative in 2003 to encourage banks to consider alternative credit information, such as references from landlords, utility bills and pay stubs.

The pilot included 40 participating banks in Illinois, Indiana, Wisconsin and Kentucky.

The program has been so successful that it has been expanded to eight other cities: Atlanta, Austin, Boston, Des Moines, Kansas City, Mo., Los Angeles, New York and Charlotte/Raleigh.

According to the FDIC, in the Midwest 86 banks accept alternative forms of identification, 44 of which are in Chicago. Twenty-three of the 40 banks in the program offer these "alternative" mortgages, and 800 mortgage loans totaling $100 million have been made by those 23 banks since the start of the program.

Recently, more banks have been encouraged to issue ITIN mortgages by the Illinois Housing Development Authority, which started a program last December spanning about 3,000 participating bank branches. IHDA's Opportunity I-Loan encourages mortgage lenders to accept alternative forms of credit and identification. Under the program, IHDA buys these loans from the mortgage lenders.

This program was developed to discourage borrowers who don't have a credit history from falling prey to predatory lending practices. As such, the product targets African-Americans who have Social Security numbers as well as ITIN holders.

"This is as much an African-American issue as it is an immigrant issue," said Bryan Zises, a spokesman for IHDA.

ITINs are nine-digit numbers, just like Social Security numbers.

"When the Opportunity I-Loans come to us, we don't differentiate those with Social Security numbers from those with ITINs," Zises said

In the Chicago area, mortgage lenders such as San Juan, Puerto Rico-based Banco Popular Inc., Roselle-based Charter Mortgage Services Inc. and Second Federal Savings and Loan Association of Chicago issue ITIN loans. Second Federal has been doing so since 1998, and has issued 158 ITIN loans since then.

However, some banks have begun to take a wait-and-see approach, given the growing tensions over the pending legislation. Hammond-based Bank Calumet, which started extending ITIN loans last August, was recently halted from continuing the program by the bank's new owner, Itasca-based First Midwest Bancorp.

Other banks are standing behind their ITIN products.

"We follow every federal, state and local law," said Juan Carlos Cruz, a spokesman for Banco Popular. "Until a bill is passed that prohibits us from issuing ITIN loans, we will continue to offer it."

Cruz said that ITIN loans are currently offered in Banco Popular branches in Texas and Illinois.

Before IHDA's loan-purchase program was initiated, Second Federal used its own in-house funds to support ITIN loans, according to Joan Batcha, chief lending officer of Second Federal.

"Right now, our portfolio is full, so we're not including ITINs in there, but as long as IHDA continues to buy ITIN loans, we will continue to offer this product," Batcha said. "We do believe in this product."

"Will I continue to offer it? Yes," said Rita Dominguez, loan officer at Charter Mortgage Services.

"We would stop only if the banks that fund this (ITIN) program stopped funding it," she said. Dominguez declined to name the funder banks due to the difficulty in securing them. "We don't want other lenders to steal them from us."

Tarabein, of RE/MAX, said that not many of his clients know about ITIN loans.

"Most find out through word of mouth," he said. Over the past year, he has sold homes to about 20 or 25 families who purchased using an ITIN mortgage, and refers clients to Charter Mortgage Services.

Both Tarabein and Zises of IHDA said default rates on ITIN loans are extremely low and pose no risk to lenders.

"I never see people fall behind on payments," Tarabein said. "These loans allow hard-working immigrants to make the switch from renters to homeowners."

Unfortunately,

This State is turning into a 3rd World Country like Mexifornia.

Don't you just love how they refer to illegals as immigrants? What part of illegal don't they understand?

The media almost always calls them immigrants or undocumented and our groups anti-immigrant or anti-immigration. I'm getting kind of numb to it now.

And why is it that everyone falls all over themselves to rush to the assistance of illegals? Realtors, bankers, politicians... There are very deserving working poor in this country who no doubt don't qualify for these programs and who actually have a valid credit history. They could surely use a hand up to build for their futures. Why aren't we helping them in the same manner? I hope the illegals do get deported and the banks have to foreclose. Sure they'll probably find some way to dump the expenses onto the taxpayers, but in the long run the savings in other programs would probably make up for it. Besides, here in CA the only way the illegals afford the $500k+ pricetag for a standard home is to pool resources among several wage earning families who then share the house. Wouldn't mind to see that trend end. But I digress....

Gambling which as been taken over by state governments and the Indians used to be the largest sector of income for the syndicate. Facilitating illegal aliens is now Americas largest form of organized crime.

Let's just eliminate all of our laws, that way everyone can do whatever they want, when they want. No one will ever feel unwanted, uncared for, or discriminated against. Plus, think of all the money we'll save on law enforcement. No more crimes, no more jails and no more illegal anything. We'll just be one big, happy family. I can hardly wait.

All aspects of the real estate industry as targeting illegal aliens as an emerging market for them. They have done over their websites to include spanish to fascilitate them purchasing homes. If you are in this country illegally you should not be able to purchase a home or anything else for that matter. But again another example of big and small business catering to criminals.

They are upset because they might lose their market..aw.
Buying real estate is one of the major ways that Mexican Drug trafficking organizations can launder their cash.