Thread: Banking on illegal immigrants (2005) Bank no more 2007

http://righttruth.typepad.com/right_tru ... et-an.html



Stock market and mortgage woes connected to illegal aliens?
Subprime Mortgage Defaults Being Driven by Illegal Immigration? , Undocumented Blogger

Just who are these borrowers that are defaulting on their mortgage loans at a nearly a 50% rate? Leonardo Simpser of the Hispanic National Mortgage Association (NHMA) says that Hispanic first-time buyers constitute the fastest-growing segment of the subprime mortgage market. He also says that many Latinos, especially recent immigrants, have low FICO credit scores or no scores at all and are less creditworthy than they are in reality.
HNMA is the creator of the Hispanic Automated Underwriting System (HAUS) which claims to allow lenders to "eliminate the need for time-consuming manual underwriting of such applicants, and allows lenders to underwrite borrowers with no Social Security numbers and multiple income sources."

Congress needs to act. We need a full congressional investigation into determining just how rampant the illegal immigration problem is in regards to these mortgage defaults. Much like the savings-and-loan scandals of the 80's we need to know which banks are catering to illegal immigrants in violation of U.S. law and making these extremely high risk loans putting the economic prosperity of this country in great peril.

Call your congressmen today and demand an investigation! http://www.usa.gov/Contact/Elected.shtml (read more)






2005 article on illegals and housing.


http://money.cnn.com/2005/08/08/news/ec ... mmigrants/


Banking on illegal immigrants


Banks are seeing an untapped resource in providing home loans to undocumented U.S. residents
August 8, 2005: 3:39 PM EDT
By Shaheen Pasha, CNN/Money staff writer

NEW YORK (CNN/Money) - The banking industry is opening its doors to a controversial new market: illegal immigrants.

Despite heated political debate in Washington over illegal immigration in the United States, an increasing number of banks are seeing an untapped resource for growing their own revenue stream and contend that providing undocumented residents with mortgages will help revitalize local communities.

It's a win-win situation, they say.


But skeptics worry about the message these home loans send to illegal immigrants: break our laws and we'll reward you with a home.

"It's institutionalizing illegality," said Marti Dinerstein, president of Immigration Matters, a New York-based think tank. "Now there's no distinction being made between the people that follow all the rules and those who break our laws by entering the country or overstaying their visas."

Dinerstein also worried that lack of knowledge on the part of illegal immigrants could pave the way for abuse in the form of predatory lending.

But advocates of the practice say the benefits outweigh any potential downside.

According to the Center for Immigration Studies, one million illegal immigrants cross the U.S. borders every year. About 500,000 illegal immigrants lose that status every year either by getting legitimate green cards or returning to their native countries. That leaves a 500,000 annual net increase of illegal immigrants – a market that has unmet banking needs.

"This is a huge untapped market with people that live and work in this country and are capable of buying homes to realize the American dream," said Chan Peterson, executive vice president and head of community banking at Banco Popular, one of the earliest banks to enter this field.

He added that there's a common misperception that illegal immigrants will be more likely to default on their loans than a documented resident. But the company has found that there is no higher rate of default in this loan portfolio than any other market the company serves.

"There's a pride that comes with people moving from renting to owning and we've found that these borrowers are driven to hang on to their homes," Peterson said.

Bill Schumer, vice president of product development at Fifth Third Mortgage Co., a unit of Fifth Third Bancorp. (Research), said the company entered the marketplace due to the belief that providing these low-to-moderate income loans will help revitalize communities in the United States, as borrowers buy more run-down properties and rebuild.

He added that by introducing this segment of the population to home ownership education, they are also building a foundation to cross-sell their other products.

"We've been at this program for the last 8 or 9 months and 68 percent of these borrowers have established three or more banking services with us," he said.

While Schumer wasn't willing to disclose how many of mortgages the company provides, he said the product has been well received in the marketplace and is already 4 percent above the level the bank had targeted for the year. And it's growing.

That's not surprising, said Alenka Grealish, manager of the banking group at Celent, an independent research and consulting firm.

Grealish said while the mortgage banking business in the U.S. continues to be red hot, veterans know that it's a highly cyclical industry that moves with interest rate trends. She said that forward-looking banks are already considering how to grow their business when the pipeline of traditional mortgages begins to dry up.

"Illegal immigrants are here to stay and banks are recognizing that," she said. "If you do a niche market well and know how to price it, banks can have some attractive margins."

She added that while criticism is rampant, banks are careful to follow guidelines that the government already has in place.

Case in point: the government's issuance of individual taxpayer identification numbers, or ITINs.

ITINs are a nine-digit tax processing number issued by the Internal Revenue Service to individuals who are required to have a U.S. taxpayer identification number but who don't have, and aren't eligible to obtain, a social security number. Since the IRS doesn't require legal residency to obtain an ITIN, many illegal immigrants use this form of identification to pay U.S. taxes and buy homes.

"Illegal immigrants are a huge gray area and it becomes even more gray when you start issuing ITINs," Grealish said. "There's complicity already within the government in which they're saying that they're kind of fine with these people here as long as they pay their taxes."

The IRS for its part says that ITINs aren't valid for identification purposes outside of the tax system. But there are no explicit rules banning the use of ITINs in obtaining mortgages.

Banco Popular's Peterson added that it would be discriminatory to deny a loan based on an ITIN.

For now, community banks are leading the charge when it comes to providing home loans for illegal immigrants. Banking experts say that community banks often have the bilingual capabilities and are more in tune with local community needs and markets.

And larger banks are holding out for secondary markets such as Fannie Mae or Freddie Mac to agree to buy illegal immigrant mortgages from the banks – thus lowering their risk.

Bank of America (Research), which accepts ITINs to open interest-bearing deposit accounts, currently isn't offering a mortgage product to this market but the banking giant is looking into it, said spokeswoman Julie Davis.

"Banks are counting on the fact that we do a lousy job with interior enforcement," said Celent's Grealish. "Once you're in the country and you haven't done anything wrong, the chances of being deported are very slim. Banks are banking on that."

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Great article!

Illegals are heading back, so now we have empty houses. We have a surplus of homes on the market in my area and a lack of buyers. My realtor told me that's why my home is not selling. It will take a while for everything to get caught back up, but it will happen.

Very interesting...more destruction to the current middle class. Seems as though the elitists are moving illegals with no proper track records (oops, there go those mising documents, again) into the middle class. What's behind this??????????? And why??????????? I wll be calling my Congressmen and Senators!!!

Illegals, FHA, Fradulent loans

20,000 illegal immigrants hold FHA mortgages in metro Denver alone.â€

Demand to your senators to enact impeachment proceedings NOW!

- The Economy (Bush) Greenspan and the new fed goes by Bushes Guidance ... liquidity from Bush has the markets ready to collapse
- liquidity flooded the banks which fueled the housing collapse
- Sub Prime fiasco (Financed by the Fed)
- Mortage lenders giving loans to Illegal Immigrant community (No Documentation Loans)
- Preditory loans
- Forclosures by the millions not seen since the Great Depression
- A US very, very bad recession is right around the corner IF NOT DEPRESSION
- Billions of US investor dollars lost within the last month alone in the stock market and is SCREAMING FOR A TAX PAYER BAILOUT
- Billions of foreign currency lost because of the liquidity of the Fed under Bush
- The Rich are getting Richer; the Poor and Getting Poorer and the Middle class is being eliminated
- Talk of the Amero when our markets collapse ... It's time to get busy America.... put down the damn ice cream

I've been told a number of stories by eyewitnesses of foreign homebuyers defaulting and leaving suddenly.

You can gage the conditions in your neighborhood by eyeball and gut, but a good measurement I learned about when I had my house up for sale is saturation. You define an area, figure how many homes are for sale, how many homes on the average sell per month using recent data, and divide. A saturation point of over 5-6 months will probably feel like a hard market if you are a seller. It was around a year when I tried to sell my home. I got 4 showings in 3 months and gave up.

The illegals didn't cause this housing collapse; it was crooked realtors and property flippers. Why would 10 people of working age not be able to afford a $1700 mortgage? This biggest part of this crap is how the flippers would buy a property for a cheap price and then use a "fake" buyer to agree to buy it for much more than it was worth. The bank, going on the information they have regarding the buyer(s) makes the loan and gives the crooked seller a check. The crooked seller then gives the fake buyer(s) a cut and keeps the rest. The "buyer" can either live in the house until foreclosure, which can take months, "rent" it out til foreclosure or simply move on with new fake info and do it all over again. I don't feel sorry at all for the lenders -if it wasn't for blind greed this wouldn't have happened. peat after me: "If you put your privileges before your principles, you soon lose both..."

But in 1998, the FHA started letting sellers contribute down payments via group funds administered by charitable, non-profit organizations.

Enter LaRaza....they get millions of dollars from the taxpayers for something called "housing counseling." Apparently that's where the down payments are coming from.

In our area there are stories of homes being bought in a particular subdivision and no payments are ever made. It's obviously a scam.

My take on it is-people bought houses they probably couldn't afford or could if they were REALLY frugal but, then illegals started flooding the country and jobs that were once "secure" were lost (just look at Terry Funderburk) and suddenly people couldn't keep up.As Americans we are not really of a culture where we will move in our whole extended family to help pay for our home. That combined with the increased taxes to pay for the healthcare,schooling and welfare of illegals and you've got a big problem.




Head 'em up,move 'em out Rawhide!

bttt