NCPA - National Center for Policy Analysis


April 14, 2005

Mortgage lenders are eager to tap into what they see as a $44 billion marketplace: housing loans for illegal aliens.

  • Banks across the United States are writing loans based on individual taxpayer identification number, or ITIN; they are easy to get, even if you are ineligible for a Social Security card.
  • The Internal Revenue Service issues them and expects recipients to file tax returns. The IRS doesn't report illegal aliens to immigration officials.
  • Mortgage lenders don't care if applicants are legal or illegal; they simply make a business decision in approving or disapproving a loan.

Not everyone approves of the program, however:

Banks "ought to be part of the solution in ensuring that people who apply for mortgages and conduct other business are here legally," explains says Dan Stein, president of the Federation for American Immigration Reform, a Washington-based group that favors tighter immigration controls. "They went down the road of making a fast buck in a way that is frankly, in our view, inconsistent with the spirit of patriotism and federal law."

In addition to accepting ITINs, banks are being flexible when they look at credit reports, since many immigrants don't have a traditional credit history.

  • For instance, say lenders, the bank may consider rent and utility bill payments, or a history of sending money to family overseas as evidence that a customer is a good risk.
  • One company, Milwaukee-based Mortgage Guaranty Insurance, now offers private insurance on the loans, which reduces risks for banks and makes the mortgages easier to resell.
  • The Federal Deposit Insurance Corp. is helping a group of Midwest banks to develop ITIN programs.

Freddie Mac, the Federal Home Loan Mortgage, is studying whether to buy the mortgages from banks.

Source: "Invasion USA: A mortgage plan tailored for illegals; Banks eager to dip into $44 billion housing market,", April 8, 2005.


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