Immigrants use U.S. wages toward mortgages in Mexico
The Associated Press : March 25 , 2008 -- by Ivan Moreno

"Santiago Noriega Sanchez, a spokesman for the Mexican agency that regulates mortgages, said the requirements have the blessing of the Mexican government and that no one in the U.S. has complained about buyers' legal status going unchecked."
When the American Dream failed Arlin Gonzalez, the 31-year-old native of Mexico looked homeward for a second chance.


The divorced mother of two sold her Denver home after she could no longer afford the mortgage payments. Then she spotted a TV commercial advertising across-the-border mortgages to people living in the U.S.

A house in Mexico, she thought, could be a good investment for her children's future. So Gonzalez bought a home in northern Mexico with a fixed interest rate, paying $400 a month for 15 years. And she was able to stay in Denver by renting.

"The experience that I had here was that I could kill myself working four or five jobs and still end up with nothing," Gonzalez, a teacher's aide at an elementary school, said in Spanish.

Despite the foreclosure crisis in the U.S., such cross-border mortgages are becoming more common as companies seek to capitalize on the growing earning power of Mexican immigrants, who in January alone sent $1.65 billion back to their homeland, according to Mexico's central bank.

The Denver company that provided Gonzalez's mortgage, called Su Casita, or "Your Little House," finances up to 90 percent of home costs and requires a down payment of at least 10 percent.

That's one reason its mortgages typically don't go into default, said Jose de Jesus Olivares, a spokesman for Sociedad Hipotecaria Federal, a Mexican federal agency that regulates and helps fund mortgage lenders doing business in Mexico.

"Our job is to serve the immigrant, to help them bring their dreams to life," said Ivan Funes, general director of Houston-based Conficasa, which offers cross-border mortgages catering to Mexicans in New York, Atlanta, Chicago, Dallas, California and Ohio. "A lot of Mexicans go to the United States dreaming that they will one day return to their beloved Mexico."

Mortgage interest rates are higher in Mexico than in the U.S., ranging from 9.5 percent to 14 percent, but they are fixed, another reason foreclosures aren't common, Olivares said.

Mexicans in the U.S. typically earn double the wages of Mexican residents and are able to pay for their homes faster, Olivares said. The houses they buy are larger than what they could dream of buying if they had stayed in Mexico.

Su Casita and other cross-border mortgage companies don't require proof of legal status in the U.S. -- only that their clients have a job and can pass a credit check. Home prices typically start at $30,000 for a small two-bedroom house.

Santiago Noriega Sanchez, a spokesman for the Mexican agency that regulates mortgages, said the requirements have the blessing of the Mexican government and that no one in the U.S. has complained about buyers' legal status going unchecked.



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