The recent housing crisis has got me wondering about events in 2005 when banks decided that it was good practice to start giving mortgages to illegal aliens. E.g. Bank of America, etc.
The bank industry stated that it was a "win-win situation" and saw it as an "untapped" source for a growing revenue stream.
Not everybody agrees...
"It's institutionalizing illegality," said Marti Dinerstein, president of Immigration Matters, a New York-based think tank told CNN. "Now there's no distinction being made between the people that follow all the rules and those who break our laws by entering the country or overstaying their visas."
Dinerstein was also worry that this could lead to a form of "predatory lending."
Advocates on the other hand said the benefits outweigh the potential downside.
"This is a huge untapped market with people that live and work in this country and are capable of buying homes to realize the American dream," said Chan Peterson, executive vice president and head of community banking at Banco Popular, one of the earliest banks to enter this field.
Peterson added that there is a common misconception that illegal immigrants will be more likely to default on their loans than a documented resident.
except for the little issue of risking deportation.
"Illegal immigrants are here to stay and banks are recognizing that." Said Alenka Grealish, manager of the banking group at Celent, an independent research and consulting firm.
Grealish added that banks are careful to follow guidelines that the government has already have in place.
The risk for the bank is lowered because secondary markets such as Fannie Mae and Freddie Mac have agreed to buy mortgages from banks that lend to illegal immigrants.
"Banks are counting on the fact that we do a lousy job with interior enforcement," said Celent's Grealish. "Once you're in the country and you haven't done anything wrong, the chances of being deported are very slim. Banks are banking on that."
first of all, I think that it would be a higher risk for a bank if the person that they loan money to risk deportation at any time.
For example, once you've been deported, it is a felony to return to this country.
So looking at the housing issue at the moment and with all the loans that are being defaulted, I just am curious if this has anything to do with it.
2 comments:
Yep, it's nice to know that all these experts don't seem to have the morals or the will power to resist coming up with these schemes that to us novices know reek of scam.
Also, how can you base your economy so heavily on the new housing market without a constant new supply of buyers. No wonder we can't seem to stem the tide of illegal immigration.
Looks like this is just another bail out we get to fund for the moneychangers.
People seem to forget that everything OUR government pays for, in this country and world wide, is coming out of OUR pockets. If you look at some of the pet projects that WE are currently funding, it is obvious that OUR Government is not looking out for OUR needs. Why do we spend millions of dollars studying insects in France? - Because they may fly over here and hurt our crops. What a CROCK!
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