Tuesday, November 4, 2008

Did Undocumented Immigrants Fuel the Mortgage Crisis?

The Wall Street Journal reports that undocumented immigrants have a good record with their mortgages, as measured by homes bought with Individual Taxpayer Identification Numbers (ITINs). "Less than 5% of Bank of Bartlett's ITIN loans are delinquent. Nationally, for loans more than 90 days in arrears, ITIN mortgages had a delinquency rate of about 0.5% last year, compared with 9.3% for subprime mortgages, according to independent estimates." Ironically, a little more than a month ago, the National Review ran an article by rabid anti-immigrant columnist Michelle Malkin about "how illegal immigration, crime-enabling banks, and open-borders Bush policies fueled the mortgage crisis."

Mortgage Prospects Dim for Illegal Immigrants
By Miriam Jordan, The Wall Street Journal
October 22, 2008

Jose Luis Hernandez rose from vegetable chopper to sous chef at an exclusive New York restaurant -- and saved $100,000 along the way. Recently, the illegal immigrant from Mexico contacted real-estate agents in Brooklyn, N.Y., where he currently rents an apartment.

'I wanted to use my money as a down payment on a house,' says Mr. Hernandez, 32 years old. In doing so, he sought to join thousands of undocumented workers who in recent years have purchased homes using an Individual Taxpayer Identification Number, or ITIN, instead of aSocial Security number. The Internal Revenue Service doesn't give Social Security numbers to illegal immigrants; it issues ITINs, which enable them to open bank accounts and report their income to the government for tax purposes.

But Mr. Hernandez quickly learned that things have changed. He says he was told that, 'unfortunately, if you don't have a Social Security number, you cannot buy property.'

Dubbed ITIN mortgages, the loans that made homeownership a reality for thousands of undocumented workers have withered -- although not because they underperformed. [...]

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