Posted on 10/17/2007 10:30:51 AM PDT by JZelle
Despite the downturn of the mortgage market, a type of home loan has remained surprisingly sturdy: one extended to illegal immigrants.
Now, the question is whether these loans will continue to hold up. A number of factors -- including a possible government crackdown on illegal workers and a slowdown in job prospects for undocumented laborers -- threaten the ability of these borrowers to keep paying. And there are signs of a slowdown as some lenders have raised the interest rates they charge because of the recent mayhem in the credit markets.
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 bulish.
"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."
(Excerpt) Read more at realestate.yahoo.com ...
I'm not even sure I could list out all the things wrong in this passage...
If an employer is witholding taxes, there is a bogus SS number being used - which constitutes fraud on the workers part. We all pay sales taxes. So, how do they pay taxes legally?
The link points to RealEstateJournal.com, not The Washington Times.
Illegal aliens should not even be in this country, much less qualify for a loan.
Fake SSI cards can be purchased for around $250 around here........
Ok class, what's wrong with that statement?
Are these homes single family occupancy or merely listed that way? The article did not mention occupancy statistics.
Mortgage/Credit/Housing Issues Ping
If you want on or off this list let me know.
Yeah same here. That’s what I mean - the lender knows they are not legally paying taxes, yet use that wording as a qualifier.
Admin,
Please change source from Wash. Times to RealEstateJournal.com
Sorry about that.
Indeed, the three families, located in 372 cities across the nation, have apparently been able to handle nearly 100 million in mortgages by themselves, using well over 10,000 bank accounts...
Seriously, though, it would be really entertaining to compile the documentation used to acquire these loans and compare them. It wouldn't shock me if there were indeed three ITIN numbers being used for all the loans.
“Sturdy But Show Some Cracks”
Same thing they said about the bridge in Minneapolis!
As far as how they get the loan in the first place, I'm not sure. I do know that foreign citizens can buy property here, but I don't know what they have to do to qualify.
As far as illegals, I think IndyMac and B of A started these loans early last year or so. If the person is residing here and has a job, that means the bank must be turning a blind eye or not verifying SS#.
Maybe someone else has more info.
Illegals that want to pay taxes can request an Taxpayer ID number from the IRS. They can use the number to file taxes, just as the rest of us do. There are some tax credits and other things that are not allowed for those with taxpayer ID numbers, such as the Earned income credit, but most of the process is the same as it is for a citizen. The IRS encourages illegals to have taxes withheld and to file tax returns.
Their website used to have a statement to the effect that information from those requesting taxpayer id numbers will not be forwards to immigration officials, and is completely confidential. I don’t know if it is still there or not. The entire process is not only legal, it is highly encouraged by the IRS.
Most of the home loan recipients are legally paying taxes. The mortgage companies insist on it.
Nice try by the real estate flacks.
Read deeper and you find that these are NOT the types of mortgages to illegals that are going into default. The mortgages discussed here are fixed-rate mortgages at 8-10% interest. They don’t fit into the typical sub-prime mold.
The mortgages that are going belly up, which are much more numerous than these few, are usually adjustable rate loans with very low teaser rates and one-to-three year balloons. Many of them are not just to ITIN holders, but fake SS numbers, legitimate SS numbers of landlords catering to overcrowding illegals, or multiple owners piled on the mortgage to qualify. Often the same names to qualify for loans show up on several different mortgages .
Nice try Hannie Mae, but the bottom line still remains - most subprime loans going into default are going to illegals, landlords of illegal, and realtor-arranged liar loans.
These are the loans that make up most of the subprime foreclosures
Ok, for arguments sake lets say they acctually verify that the illegals pay “taxes”, what kind of taxes are we talking about, income or property and sales. They have to pay property taxes, it comes out of escrow, sales tax is charged on purchases....as far as income tax....how exactly does one deduct income taxes from a wad of cash and/or do federal handouts get taxed (I honestly don’t know the answer to this one, they take all my money to pay it, but I don’t know what happen when its paid to the illegals)
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