Illegal Aliens And The Sub-Prime Mortgage Meltdown
By Greg L | 13 May 2008 | Local Economy, Illegal Aliens | 24 Comments
Michelle Malkin takes a peek at the connection between illegal aliens and the sub-prime mortgage meltdown on her site today, stringing together a pretty substantial body of evidence that confirms what many of us in Prince William County have suspected for so long: that the real estate bubble was largely fueled by identity and credit fraud and other immoral, of not outright unlawful activity involving substantial numbers of illegal aliens. This is what “celebrating diversity” as a prime policy mover will get you, especially when that “celebration” steadfastly ignores the legal status of the persons being attracted to the scheme.
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.
Of paricular note is how our federal government encouraged this mess in the first place by subsidizing loan programs that would benefit illegal aliens with taxpayer dollars, and then required lenders to not ask any questions about legal status. As a result, it was the federal government that encouraged this unlawful behavior and was actively complicit in the disaster that has befallen so many communities.
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.
No wonder citizens are engaging at the state and local levels, demanding that their elected officials take action to reduce the number of illegal aliens unlawfully residing in their communities. The federal government not only hasn’t fulfilled its obligation to protect and defend the people of the United States, but in many ways is actually aiding and abetting those who break the law and using your taxpayer dollars to do so.
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I know that this forum is not concerend with facts, but I present this article from last fall. I don’t know what has happened since then, but as of last October mortgages to people who use an ITIN instead of a SSN has a default rate significantly lower than other types of loans.
http://online.wsj.com/article/SB119188674981652816.html?apl=y&r=332625
Illegal-Immigrant Loans
Have Been Solid Bets;
Threats Are Looming
By MIRIAM JORDAN
October 9, 2007; Page C1
Despite the downturn of the mortgage market, a type of home loan has remained surprisingly sturdy: one extended to illegal immigrants…
…Known as ITIN mortgages because applicants must have an individual taxpayer identification number, the fixed-rate loans are designed for immigrants who can prove they are creditworthy and pay taxes even though they don’t have legal permanent residency in the U.S.
The mortgages represent a fraction of the $2.8 trillion mortgage market. But they are a bright spot in today’s gloomy mortgage industry. For loans more than 90 days in arrears, ITIN mortgages have a delinquency rate of about 0.5%, according to independent estimates. That compares with 1% for prime mortgages and 9.3% for subprime mortgages extended to those with spotty credit histories.
Many lenders who have sought this business remain bullish. “Our default level is almost zero,” says Scott Hastings, director of marketing for Citizens Home Loan Inc., a Charlotte, N.C.-based lender that is active in 33 states. The bank has been originating ITIN mortgages for almost two years, and the loans now make up about 20% of the institution’s mortgage business. “It’s an absolutely promising market. These Hispanic families will pay their mortgage before anything else.”…
…ITIN-mortgage applicants are largely blue-collar, illegal-immigrant workers with only modest incomes. But they undergo more scrutiny — and provide more documentation — than candidates for stated-income mortgages and other subprime loans, for example. Most banks also ask applicants to show they have been filing taxes — with an ITIN — for at least two years….
‘Hannie Mae’
A few months ago, Hispanic National Mortgage Association, a privately held company nicknamed “Hannie Mae,” began buying ITIN mortgages from lenders. Once it has bought the loans, HNMA packages them into securities for investors. HNMA, which is based in San Diego, puts the ITIN mortgage market potential at $85 billion. But it estimates that the niche market has generated only $2 billion in loans overall because relatively few banks offer them.
The company has devised an automated underwriting system to help lenders evaluate ITIN borrowers. For example, its system enables banks to take into account secondary cash income, such as free-lance work performed on the side, as well as nontraditional households, where an extended family pools resources and income.
Banks in the Midwest have been the most aggressive in offering ITIN loans, following an initiative by the Federal Deposit Insurance Corp. to encourage banks in Chicago to lend to immigrants, regardless of their immigration status.
But the advent of the secondary market and the strong performance of ITIN mortgages have attracted more banks across the country. Currently, Illinois, Georgia, Indiana, Wisconsin and Texas are the top producers of ITIN mortgages, accounting for about 70% of the volume insured by MGIC…
…Only one of 120 homes financed by Mitchell Bank in Milwaukee, an ITIN-mortgage pioneer, has gone into foreclosure in seven years. But, “if these immigrants start to lose their jobs, they may have trouble paying their loans,” says James Mahoney, chairman of Mitchell Bank. “That would severely hurt the bank.”
Our Congress made this possible … snuck a rule enabling banks to use Matricula Consular cards for guaranteed loans … abject whores. This happened in late 2005 and led very directly to the outbreak of flophouses in our area.
Both parties sold us out and neither is providing us with any representation. To hell with both our political parties and the elitists who run them.
$$$$$$$$$ is what its all about……
And of course, the Bush administration is going to bail the banks out. Heaven forbid that banks suffer because of bad loans!
El Guapo, of course if takes a couple of years before the foreclosures start … measure it now.
I see evidence all around me, each day.
Well El Guapo, if those loans are so “solid” and they’re not being foreclosed, why are so many of the illegals leaving?? Suppose it’s because they’re afraid of the Rule of Law Resolution in PWC? Perhaps it’s because they got tired of the rainy, cold weather we’ve been having here lately. Whatever, it’s certainly not personal irresponsibility.
…and it’s just like those darned people in Prince William County…here the 27 of us living in the house were collectively able to make the mortgage payment. …and THEN, PWC decided to cooperate with the feds in enforcement of the law! Now look at what we’ve got…we still have the eight cars and four trucks, but no house. …and that’s nothing but racism!!!
I posted this months ago. Here’s how it went:
1. Let the illegals in.
2. Illegals build big, expensive homes.
3. We sell our old homes to buy bigger, more expensive homes. The idiots among us take loans that we could not get before and ignore the balloon payments. Illegals buy the homes that we sell with subprime , adjustable rate mortgages.
5. Home prices spiral out of control, everyone in the realty transaction makes a ton of money.
6. Economy takes a dump, PWC cracks down on illegals, illegals lose jobs in construction.
7. Illegals pack up and abandon homes and mortgages that they got with no/false ID.
8. PWC housing market floods with foreclosures. Instead of PWC market melting down, people are buying them to live in. Imagine, affordable housing in NOVA!
Now, if we kick the illegals out, the market will correct itself and there will be plenty of housing for all.
I personally think the flight of illegals has more to do with the mortgage crisis then anything else. I’m sure the resolution is partially responsible, but I believe in a very small part.
Anecdotal evidence -
I have two flophouses in front of me and they are carrying on as if nothing happened. I live in the county. What’s different about these flophouses? They’ve been operating for around 10 years to one degree or another. Long before the mortgage issue begain. For the past few years they have been cramming more people in them though.
The flophouse near my grandmother’s house (county resident) were vacated overnight a few month’s ago. These flophouses were bought at the hight of the mortgage free-for-all.
I just can’t help but feel this resolution has been seen by the illegals as the paper tiger that it is.
What’s the addresses of your two flophouses, Mando?
I’d love to tell you, but I know the anit-bvbl’ers frequent this site and I’m on their “SCARY” people watch list. I don’t know what the implications of that are, but I’m not sure I want to find out. If it were just me, I don’t care if they knew my address but I have a daughter and a fiance whom are home when I’m not. Better to err on the side of caution.
I have called a couple of times on one of the houses though. Both times for cars being all over the freakin place. Next to my house, in their front yard, hidden in their back yard.
The other was busted a few years ago for operating a clothes cleaning business illegally in the basement. The owners of the house rented it out to “workers” which washed and hauled the clothes in 3 or 4 workvans that parked behind the house.
Well, Mando, you just made the fat broads’ day. If you’re going to let hypocrites like that intimidate you, you might as well just move out to Haymarket with them and the rest of the cowardly white flight crowd and let them dictate to you how to think, act, dress, speak, and what lawn furniture to buy.
Off the subject, but has anyone filled out the zoning complaint form on-line lately? I have, and was asked in an email to participate in a face-to-face meeting with the inspector. I also had to submit a questionnaire, which I did today.
Oddly enough, some of the boarders decided to pack up and move out tonight. I can’t help but wonder about the timing of my submittal of the questionnaire and their move. Could someone inside county government have tipped them off? I’d like to hear from some of you that may have undergone a similar experience.
That is a story I’ve heard far more often than I’d chalk up to pure coincidence. From what I’ve been able to determine, the chain of custody on the complaints as they pass from the system to the inspector has some gaping holes that would make it possible for someone to earn some extra cash by tipping off folks who are scheduled to get a visit from neighborhood services.
There’s no evidence that there’s any corruption there other than some disturbing anecdotes, but I’m keeping an eye on this. At some point someone is going to screw up if there’s some scam going on.
Let me guess, this was in the Manassas area?
jfk,
Was your complaint regarding overcrowding? If it was they are taking a more investigative approach to these complaints. They will be talking to the citizens to get as many details as possible. This should help in establishing a solid overcrowding case.
We’ve thought “tipping off” was a possibility for a couple of years now. We’ve seen things get taken care of before PCE makes out. I mean with in hours of the complaint being called in. This does raise some red flags with myself, and several other concerned neighbors.
I have more information. I will NOT go into details on the blog though. I am willing to discuss further with you via email. GL can give you my email.
Are y’all talking about our favorite bilingual zoning inspector? I haven’t seen any evidence of tip offs, just evidence of him not doing his job.
Dave,
You know it!!
I filed two complaints for homes in my neighborhood (PWC, near Clover Hill Road in the Wellington area). One is for a house that I had complained about previously. Come to find, the owner had a full kitchen in the basement and two families living there. The kitchen was supposedly removed and one of the families asked to leave. That was a year ago, and now it looks like the owner is trying to bring in a second family.
The second house is owned by a family from the Phillipines. They have a large extended family, and I don’t have an issue with that. However, several new folks have started to appear. I filed the complaint two weeks ago, and completed the questionnaire yesterday. Last night a pickup showed up about 9:00 and two of the occupants began hurriedly moving a bedroom set, hampers of clothes, and other small furniture. They finished about 11:00. They were not taking any care to protect the furniture, they were getting the heck out.
Greg, please send me Lafayette’s email. I would like to get her story. If there are other stories of boarders getting “tipped off” I think our county rep should be informed and I will do so.
If a complaint gets the owner to remedy the situation, then what’s the beef? Generally, I think it’s better government to strive for voluntary compliance — let the homeowner know there is a complaint and allow the homeowner to remedy it. Wouldn’t you want this treatment if one of your neighbors made a complaint about you?
A fact that our zoning inspectors and our Neighborhood Services Director need to be apprised of is that renting to or otherwise harboring illegal aliens is a felony under federal law (8 USC 1324). If, during the course of their duties, they have reason to believe that law is being violated, they should be reporting that suspicion to the appropriate authorities, just as it would be their duty if they ran across suspected child abuse or the violation of any other law. That same law makes aiding and abetting the harboring of an illegal a felony. If a county employee tips off a landlord that someone may be investigating them, and that landlord is harboring illegals, it seems to me that the county employee is aiding and abetting the harboring of illegals. We may have a federal case here. I wonder if DoJ would be as interested in this situation as they were in the report that some of the little illegal darlings weren’t getting schooled in Englais with as much intensity as some thought they should be.
Bubberella, I went through this process before with one of the complaints. The boarder moved out, waited for the situation to cool down, and is now back again. This is not a remedy to me. Why have zoning inspectors if these things can just be handled with a phone call? Seems likely to me that this was a tipoff to prevent the inspector from finding anything, and therefore not being able to create a record for the property showing a violation.
Sounds like something fishy is going on in the zoning inspectors office, I think that Cory and others should be emailed with your concerns and let the proper authorities handle it, or maybe a tip to the ICE hotline saying that you think a county employee is tipping off zoning law breakers.
JFK
I have a similar issue in my neighborhood — my next-doors have two pit-bull mixes that “escape” their yard frequently. One is a pit-bull/great dane mix, so the fence means nothing to him.
I talked to the neighbors after one of the dogs charged through my screen door to try to attack my old hound. They were going to use an invisable fence or build a higher fence, but they didn’t do anything. So I started calling animal control. Of course there were strained relationships after that, but they’re keeping their dogs confined better after repeated calls. I still may not want to hang out with them, but their presence as my neighbors is less objectionable when they started complying with the county ordinance against letting their dogs run loose.
Part of the reason I think I developed an effective relationship with animal control is that I didn’t call them “white trash” or bring up every inconvenience or grievance I had with their home day care business or messy lawn or drunken parties. I stick to the issue that the officer can deal with — there are loose dogs in the neighborhood.
Call the zoning enforcement again. It’s a pain to have to keep calling when the neighbors KNOW that it’s their responsibility to keep their dogs up, but repeated enforcement eventually works.
Good advice, bubberella. Thanks.
I have told Layfayette about my suspicions of a tattle-tale in the zoning office….I even thought that maybe this person got “paid” if they tipped someone off - like a bribe. Who knows.
I have called in several violations and I swear within
HOURS there was activity clearing it up. This was a while ago. Lately, it seems they are taken care of correctly, and a few have been our favorite Hispanic
inspector.
I have noticed on some, that after the case is closed,
that the problem returns after the heat dies down…..
I just call again.