When illegal immigrants want to buy a home in the United States a number of banks are experimenting with mortgages in which the lenders accept Individual Taxpayer Identification Numbers on loan applications in lieu of Social Security numbers. The IRS issues so-called “ITINs” solely to process tax payments, regardless of immigration status.
These mortgages are starting to take off. The National Association of Hispanic Real Estate Professionals believes that the ITIN mortgage market could reach $80 million, and already Wall Street has begun to buy ITIN loans and bundle them into mortgage-backed securities for sale to pension funds and other institutional investors.
Some have said this is just an experiment. However we found this scary mortgage news recently:
“I am a lawyer and I represent illegal aliens in deportation. In all but one of 35 cases I currently have on docket the illegal owns a home. But it is the loan terms that fascinate me. One lady finished school at second grade, speaks no English, and works for a recycling company binding cardboard boxes. She makes about $30K per year and is a single mom with three children. She has a $430K interest only loan that she used last year to buy a $430K condo – 100% financing – she paid $3,000 in closing costs. I tried to explain that her monthly payments will rise substantially in four years. She does not believe me, did not understand what I said and told me the loan and real estate agents specialize in real estate and would have told her if her payments could go up. If 34 of my clients with risky loans and no school past at best eighth grade are surprised by rising loan payments, we should be afraid. This is the last group desperate lenders pander to, meaning we’re near the end.”