Thinking outside the box to help the Housing Recovery

I am not an econimis, nor a financial expert, but I like to think practical outside the box, I know what I am about to say will get some people upset, and my even triger a Nationalistic reply to it, but the reality that we lived in is different to the reality we would like to live in.

We need to have a better housing recovery to help our frail and declining economy, the main reasons are high unemployment, the large amount of people living and on the way to live depending of our welfare system and social security. I am sure there tons of other factors out there, but like I said before I am not an expert.

I think the best way to give a push to the housing recovery is to allow undocumented immigrants to purchase homes, give loans to those who has ITIN numbers and pay taxes, have job security and 10% down payment. Even if the banks give them higher interest that regular loans, lets say 1 to 2% higher than the ongoing rate. I am sure if we think there are 11 million undocumented in America that 20% of them will have the means to purchase a home (good credit, saving, steady income) or 2 million plus new home owners.

Since the beginning of my real estate career I have help several immigrants from different parts of the world purchas a home in America, some are undocumented and in the past there were several banks who provide financing for them with an ITIN number at a higher interest rate, we are talking 10 to 12% interest in 2005 to 2007, at 80 to 90% LTV.

Immigrants have a different way of doing things, they usually don't use plastic and if they do they are very good with their budget, they also like to save, some use banks some has mattress money, one time a buyer askme how much he would need to buy his dream home and I told hime about $20,000 or 10% of the sales price, and he went to his bedroom and walked out with to bags with $10,000 in each bag.

I am sure some of you would say well they are illegal, criminals who are breaing the law, etc, etc. But our government looks the other way, there are several of those undocumented immigrants who use a fake social to work and pay taxes with it, and then they pay taxes again with thei ITIN number during tax season, because they think that by doing that, maybe one day they can change their status and become premanent residents, and they usually have young children and want to live a normal life.

Also as I mentioned before this is no something new, there were loans for this type of buyers up to 2008, the last bank that had this type of program was Citibank in partnership wtih NACA.

An individual with a tax id or ITIN can open bank accounts, get credit card, finance the purchase of automobile and other goods from department stores and online stores.

I am not trying to get a political debate, this is just my humble opinion based on my experience with a niche of clients, their needs and an opportunity help our economy. I don't think another artifical tax break would help with housing recovery, but this can create a long term solution and maybe a way for lenders to start opening up to buyers.

I couldn't agree more. Millions of undocumented immigrants, many with US born children and/or American spouses can not purchase a home due to this broken immigration system. But if the federal government can't fix this problem, then maybe the banks and their infinite greed could by writing loans (with slightly higher rates) to immigrants based on income, good credit, proof of identity, good rental history, assets, etc. but not based on immigration status. Everything is about "risk" in the mortgage industry, therefore it is legitimate for a bank to think that if the borrower ends up getting deported then he/she won't have the means to keep paying their mortgage. However, just like with anyone else, a US citizen could at anytime loose their job and not be able to afford their mortgage, they could get divorced and put the house on the market or short sale it because they can't afford to sustain two households, they could get sick and if they don't have health insurance they would end up having to rank up their credit cards just to survive, etc. these people qualified for loans based on their ability to pay the money back on a monthly basis, as immigrants should too. Most immigrants are here to earn a better life for themselves and their families (unlike the smears we get fed from some networks about them taking advantage of the free benefits.) They like saving money, work hard to earn every $ of their minimum wage, most DO pay taxes and have a strong sense of family unity. Providing them with a sense of ownership and allowing them to pursue their dreams will only motivate them to be better citizens and contribute to the economy, perhaps not in this generation but for sure the next one that is already living in their households.

The risk of lending to an undocumented immigrant is not that much greater than lending to an ordinary citizen. If what Jose proposed is accomplished, we will experience a powerful source of Buyers into this slow market.

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Comments

ALDO FIGUEROA February 2, 2011 at 7:13am

I couldn't agree more. Millions of undocumented immigrants, many with US born children and/or American spouses can not purchase a home due to this broken immigration system. But if the federal government can't fix this problem, then maybe the banks and their infinite greed could by writing loans (with slightly higher rates) to immigrants based on income, good credit, proof of identity, good rental history, assets, etc. but not based on immigration status. Everything is about "risk" in the mortgage industry, therefore it is legitimate for a bank to think that if the borrower ends up getting deported then he/she won't have the means to keep paying their mortgage. However, just like with anyone else, a US citizen could at anytime loose their job and not be able to afford their mortgage, they could get divorced and put the house on the market or short sale it because they can't afford to sustain two households, they could get sick and if they don't have health insurance they would end up having to rank up their credit cards just to survive, etc. these people qualified for loans based on their ability to pay the money back on a monthly basis, as immigrants should too. Most immigrants are here to earn a better life for themselves and their families (unlike the smears we get fed from some networks about them taking advantage of the free benefits.) They like saving money, work hard to earn every $ of their minimum wage, most DO pay taxes and have a strong sense of family unity. Providing them with a sense of ownership and allowing them to pursue their dreams will only motivate them to be better citizens and contribute to the economy, perhaps not in this generation but for sure the next one that is already living in their households.

The risk of lending to an undocumented immigrant is not that much greater than lending to an ordinary citizen. If what Jose proposed is accomplished, we will experience a powerful source of Buyers into this slow market.

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