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Immigration See other Immigration Articles Title: Illegal aliens getting home loans! But last year, the couple secured a $54,600 mortgage to buy the gray, 1,158-square-foot bungalow that they had been renting for eight months. The Wisconsin housing authority financed the loan. The Internal Revenue Service gave them an identification number that let them apply for it at local Mitchell Bank, which was happy to take their business. “We thought we would never buy a home, because of our (illegal) status,” said Mrs. Garcia. Competition for new customers is driving banks to offer home loans and other financial services to illegal immigrants — and they are getting help from government agencies, such as the Federal Deposit Insurance Corp. The FDIC encourages banks to lend and invest in underserved markets regardless of customers’ immigration status. The official helping hand comes as other corners of the government take an increasingly hard line against undocumented immigrants: • In Arizona, legislators passed a bill in May to bar illegal immigrants from English classes, child care and other state-subsidized services. The governor vetoed it. • In Kansas, opponents of a measure to offer in-state tuition to college-bound students who are illegal immigrants have sued to prevent its implementation. • In Congress, lawmakers in May approved a measure containing a provision that would make it impossible for illegal immigrants to acquire a driver’s license. “There is a fundamental contradiction here,” said James Smith, a senior economist at the Rand Corp., a Santa Monica, Calif., think tank. “We have one policy saying you can’t be here illegally. In practice, another policy is saying that if you’re here, we’re going to cater to you.” In Wisconsin, the state housing agency’s decision to help banks lend to illegal immigrants has set off a fierce debate in the state Senate over whether these newcomers should benefit from programs designed for legal residents. Banks in other states have started similar programs. In the 1990s, Mitchell Bank’s old turf on Milwaukee’s South Side began to see an influx of Latino immigrants. James Maloney, the chairman of Mitchell Bank, saw the newcomers as a solution to the bank’s falling fortunes. Its assets fell to $60 million in 1999, from $95 million in the 1990s. Maloney decided in 2002 the bank should offer mortgages even to illegal immigrants, convinced that would revitalize the area. The move would be in line with a federal law, enforced by the FDIC, that requires banks to invest in the communities in which they gather deposits, according to the banker. Because most undocumented immigrants don’t have a credit history, the bank decided to consider utility, rent and overseas-remittance receipts in assessing their creditworthiness. A letter from a pastor was also welcome. As demand for home loans gradually increased, a problem arose: Taking on the loans was creating more risk than a small bank could shoulder on its own. Unlike other mortgages, the loans were not salable on the secondary market to Fannie Mae and Freddie Mac, which don’t deal in loans for illegal immigrants as a matter of official policy. That means Mitchell Bank had to hold the loans in its portfolio rather than spreading the risk. The issue was resolved last year. Maloney made a presentation to the Wisconsin Housing and Economic Development Authority, which started a pilot program for illegal immigrants in which it takes the loan risk. “We can stick our heads in the sand and pretend these people don’t exist, or we can help them be in the U.S. with assets,” authority head Antonio Riley said. To be considered for a loan, illegal immigrants must fulfill the same criteria as applicants with Social Security numbers — proof of income and state residency. Like Mitchell Bank, the housing authority uses the IRS-issued tax-registration number, the Individual Taxpayer Identification Number, or ITIN, instead of a Social Security number, which illegal immigrants generally cannot obtain. In 1997, the IRS started issuing ITINs to foreigners who aren’t eligible for a Social Security number to encourage them to file an income-tax return, regardless of immigration status. As of December 2004, the IRS had issued 8 million such numbers. In four years, Mitchell Bank has issued about 100 similar home loans, mainly to illegal immigrants, and says it has never experienced a default; it has recorded two late payments. More banks are following in Mitchell’s path, helped by the FDIC, which has reached out to banks in the Midwest to encourage them to lend to immigrants, regardless of their legal status in this country. Some of the banks have become aggressive players in the undocumented market. “Our job is to encourage banks to lend and invest in underserved markets,” said Michael Frias, an FDIC official in Chicago. “We don’t make distinctions of immigration status.” The agency’s pioneering initiative is also drawing fire. “We should not be encouraging illegal immigration by offering home loans and the American dream to people who didn’t enter the country legally,” state Rep. Steve Kestell, a Republican, said. Republican state Sen. Glenn Grothman, who says the state shouldn’t be in the business of rewarding lawbreakers, has introduced a bill to quash the program. The bill is now before a state Senate committee. To become law, it will have to pass both houses of the legislature, which are controlled by Republicans, and get Democratic Gov. Jim Doyle’s signature. Post Comment Private Reply Ignore Thread Top • Page Up • Full Thread • Page Down • Bottom/Latest Begin Trace Mode for Comment # 5.
#4. To: Zipporah (#0)
The FDIC encourages banks to lend and invest in
Despicable ..
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