Latino immigrants sending less money home; other signs of financial stress mount


09:02 PM PST on Thursday, January 8, 2009

By DAVID OLSON
The Press-Enterprise

Latin American immigrants are sending less money to family members in their home countries, a study released Thursday found.

The report also found that 9 percent of Latino homeowners had missed at least one mortgage payment in 2008.

The drop in remittances, cited in a report by the Washington, D.C.-based Pew Hispanic Center, is another sign that the economic crisis is hitting Latin American immigrants especially hard.

A June study by the center, a nonpartisan research institute, found that Latin American immigrants had higher unemployment rates than native-born residents.

More than 70 percent of Latin American immigrants are sending home less money than in 2008, the study found.

The report did not break down data by region. But Mark Hugo Lopez, associate director of the Pew center and co-author of the report, said regions with especially high unemployment rates, such as the Inland area, probably are seeing greater-than-average drops in remittances.

MarÃ*a López, an employee at Vigo Money Transfer Service in Rubidoux, said the number of customers there has plummeted by about 60 percent recently, and the amount of money most remaining customers send has dropped significantly.

The study found the percentage of foreign-born Latinos sending at least some money abroad in 2008 has remained relatively constant, at about half. But Karthick Ramakrishnan, an assistant professor of political science at UC Riverside and an expert on immigration, said the number of immigrants sending money has probably fallen.

Many Latin American immigrants have returned home because of an inability to find work in the United States and wouldn't be part of the most recent surveys, he said.

The fall in remittances will hurt Latin American families that depend on money from abroad for food and other necessities, and towns that receive money for development projects, Ramakrishnan said.

Illegal immigrants are especially struggling to find money to send home, because they're least likely to find work and most likely to rely on low-paying or part-time jobs, said the Rev. Patricio Guillen, executive director of San Bernardino-based LibrerÃ*a del Pueblo, an immigrant-assistance group.

Remittances to Mexico and Central America increased rapidly from 2000 to 2006. In Mexico, remittances rose from less than $7 billion in 2000 to almost $24 billion in 2006, a Pew analysis of Mexican central-bank data found. Remittances stagnated in 2007.

An October report by the Inter-American Development Bank predicted the value of worldwide remittances to Latin America and the Caribbean would decline by almost 2 percent in 2008, when adjusted for inflation. The 2008 data has not yet been compiled and analyzed. Most remittances come from the United States.

The Pew study also looked at other ways the economic downturn is affecting Latinos. The report found that 9 percent of Latino homeowners nationwide missed a mortgage payment in 2008 and 3 percent have received a foreclosure notice.

The Mortgage Bankers Association found last month that 7 percent of all U.S. homeowners have missed a mortgage payment and an additional 3 percent are in foreclosure. The group did not break down data by ethnicity or race.

Vanesa Estrada, an assistant professor of sociology at UC Riverside and an expert on housing in minority communities, said she was surprised the Pew study found similar foreclosure rates among Latinos that the bankers' association found for all homeowners.

Latinos would be expected to have higher foreclosure rates because they were more likely to have received sub-prime loans, are on average less wealthy than non-Latinos and are more likely to live in areas with rapidly declining home prices, she said.

The Pew study also found that 5 percent of Latino renters lived in units that went into foreclosure in the past year. Lopez said he's unaware of cross-racial rental data for comparison.

Reach David Olson at 951-368-9462 or dolson@PE.com

BY THE NUMBERS

71 percent of Latin American immigrants sent less money abroad in 2008

9 percent of Latino homeowners missed a mortgage payment in 2008

3 percent of Latino homeowners received a foreclosure notice in 2008

36 percent of Latino homeowners worried their home will go into foreclosure in 2009

76 percent of Latinos say their personal finances are fair or poor

47 percent of Latinos delayed or canceled plans to buy a car or other major purchase in 2008

28 percent of Latinos reported helping a family member or friend with a loan in 2008 because of the economic downturn

SOURCE: Pew Hispanic Center

www.pe.com