Open borders and the mortgage mess
By Michelle Malkin • May 12, 2008 01:28 PM
It's the elephant in the room: How much has illegal immigration contributed to the current mortgage mess?
No one in Washington wants to talk about it–even as lawmakers pushed to include a now-dead $25 million earmark for the open-borders activists of La Raza/The Race and are preparing to hand over $100 million to the group and other left-wing organizations as part of the mortgage counseling racket.
The La Raza Development Fund has spent a decade securing home loans for low-income Latino families–and there's no telling how many of them are illegal immigrants.
This sob-story piece from the Washington Post last year gave a glimpse of the tip of the iceberg (oh, and did you spot the missing word?):
Immigrants are emerging as among the first victims of a growing wave of home foreclosures in the Washington area as mortgage lending problems multiply locally and across the country.
Nationally, 375,000 high-interest-rate loans were made to Hispanics in 2005, and nearly 73,000 of them are likely to go into foreclosure, said Aracely Panameo, director of Latino affairs for the Center for Responsible Lending. About 1.1 million homes in the United States are expected to go into foreclosure in the next six years, and many native-born Americans are likely to be stuck with burdensome loans. But immigrants are getting hit first in part because their incomes tend to be lower and many have lost construction jobs.
Homeownership rates among immigrants surged in the first half of the decade, making their prosperity an economic success story. Now it is becoming apparent that many people managed to buy homes in an inflated real estate market by turning to unusual new mortgages only now receiving scrutiny from regulators and legislators. Many of these loans start with attractive low "teaser" rates but feature payments that can suddenly increase.
Unfamiliar with the U.S. mortgage market, unable to speak or read English well and vulnerable to the blandishments of real estate professionals who told them property values always rise, many immigrants are struggling to deal with high mortgage payments as their homes sag in value, making it harder to escape the loans by selling.
Tysons Corner mortgage broker Jose Luis Semidey, who has a popular Spanish-language real estate talk show on Radio Universal, is being deluged with calls from desperate homeowners who are falling behind on their mortgages. The calls started in late 2005 and have steadily risen; he now receives 40 to 50 calls a day from throughout the area.
"I see more coming," Semidey said.
And indeed, they came.
Last month, Nancy Matthis pointed to the correlation between foreclosures and illegal alien-heavy populations in the northern Virginia suburbs:
All residential demographics have their share of unwise people who purchased beyond their means, and got caught in an economic downturn. But, taking Northern Virginia as an example, it is clear that the illegal alien population is the greatest factor. Two counties lead the effort to combat the alien invasion — Loudoun and Prince William. The statistics are compelling…
…One county that has seen a significant exodus of illegal aliens recently is Prince William County in Northern Virginia. The situation is decribed by an article in the Washington Post:
By and large, those [foreclosed] properties are concentrated in lower-priced areas and Zip codes where many immigrants bought homes in recent years, often with subprime mortgages and other risky arrangements that required little down payment or documentation. In Northern Virginia and especially Prince William, many buyers were Hispanic immigrants….
….several … real estate specialists in Northern Virginia estimate that 70 to 80 percent of foreclosure cases they see involve Hispanic families….
Real estate agents say the foreclosure crisis in Prince William has been exacerbated by local authorities' efforts to crack down on illegal immigrants….
The tenor of the discussion in the mainstream media is to blame the local communities that discourage illegal immigrants. And that is very mistaken. The illegals committed a crime by entering this country without documentation. Other Hispanics committed fraud by luring their fellow Latinos into mortgage arrangements that were destined to fail, and by misrepresenting credit credentials to the lending institutions. Immigrant homeowners of record violated the local zoning laws. Employers of these illegals were complicit by hiring them against federal law. The mortgage sellers were duplicitous in lending money on paper to clients who clearly did not qualify. The banks were unscrupulous, knowing that they could skim a profit and package and resell the paper before the scheme crashed. The Wall Street buyers of the paper defrauded their investors by making bad judgements in buying these mortgage packages from the banks.
Now, in the face of all this corruption, our federal government has reached its sticky-fingered hands into all of our pockets for the billions of dollars needed to keep these reprehensible outfits afloat.
Anti-illegal immigration activists in Prince William County will take empty houses over open-borders chaos any day.
Where are the consequences for the enablers?
I've reported for years on banks that created illegal home loan programs. Flashback 2003:
While law-abiding homebuyers must supply airtight proof of identity, legal residence and a Social Security number to lenders, illegal alien purchasers such as [Gerardo] Cabrera (a visa overstayer who recently received a green card) need only supply a "taxpayer identification number" (TIN) issued by the Internal Revenue Service. No criminal background check is required before applying for a TIN, which many banks now accept from illegal alien customers as a primary form of identification.
Cabrera's broker, Alma Preciado of Metropolitan Financial Services in Silver Spring, told the Post that about 10 percent of her mainly Latino clientele qualify for home loans using a TIN instead of a Social Security number.
That's just the tip of the illegal alien homeowners' iceberg. The Post failed to note that Federal Housing Administration-approved loans through the U.S. Department of Housing and Urban Development do not require lenders to obtain proof of citizenship or legal permanent residence. These FHA/HUD programs, primarily targeting minorities and first-time homebuyers, are federally insured and require minimal down payments.
A 25-year veteran of the mortgage industry in California confided to me recently: "It boggles the mind to think how many illegal aliens are homeowners in this country thanks to these programs, all fully insured by our government. Because of fear of lawsuits for discrimination I can also tell you that a lender may have a borrower who speaks little or no English who claims to be either a citizen or resident alien and it will not be questioned nor any proof required. Since FHA does not require any such documentation, a lender cannot cite their regulations as a basis for the request as they can on conventional loans."
Another easy avenue to home ownership is through the use of bogus Social Security cards. Moneylenders have no access to a verification system to check Social Security numbers before approving loans. A Department of Homeland Security investigator informs me that an ongoing federal probe of FHA/HUD-backed loans found that "a staggering number were approved to persons with false Social Security numbers." The Denver metro area alone accounted for 20,000 to 40,000 of the FHA-approved loans for suspected illegal aliens. "Even if a small percentage of the loans were foreclosed, HUD could be bankrupted," the homeland security official said.
A spokeswoman for the U.S. General Accounting Office told me this week that the agency's office of special investigations plans to report on the results of the probe later this fall. But "considering the size of Los Angeles, New York, Chicago, Houston, and other large cities throughout the United States known to be inundated with illegal aliens," says my source, "I don't think the federal government is willing to expose this problem for financial reasons as well as for fear of political repercussions."
Investigation of this unspoken aspect of the mortage mess is overdue:
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.
Illegal immigrants get home loans, low interest even
Home loans for illegal aliens
Home loans for illegal aliens, Pt II
Posted in: Immigration,Subprime crisis
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