Posted on 11/04/2006 4:40:33 AM PST by radar101
The slumping housing market could get a $200 billion boost from new immigrant home buyers if mainstream lenders start using alternative methods to score credit, a national group of Hispanic realtors said Friday. Creditors like Citigroup Inc.'s Citibank see recent immigrants as a growing market niche, but those who lack Social Security numbers or legal status in the U.S. are often rejected by the three major credit bureaus.
A handful of new credit reporting systems already used by 200 real estate brokers, community groups and mortgage counselors nationwide allows them to calculate risk by evaluating a prospective client's utility bills and rent checks.
Should the new reporting methods gain wider acceptance on Wall Street and among secondary mortgage lenders like Fannie Mae, housing markets in places like California's Central Valley would stand to gain the most, the National Association of Hispanic Real Estate Professionals said.
“Gateway states like California and Texas will disproportionately benefit from the housing boom because so many of their residents are immigrants,” said Gary Acosta, the association's co-founder, speaking from the group's annual convention in Las Vegas. “Boosting homeownership among these populations is a positive contribution to the overall fabric of our society and our economy.”
A study by the Joint Center for Housing Studies at Harvard University shows Latinos will account for nearly one-third of the home-buying pool by 2010. That same year, the disposable income of Hispanics will exceed $1.08 trillion, or 9.2 percent of total purchasing power nationwide, according to the Selig Center for Economic Growth at the University of Georgia.
No law requires that buyers be in the country legally in order to purchase real estate, Acosta said. Citibank, for instance, doesn't require that borrowers be citizens or legal residents of the United States, Citigroup spokeswoman Janis Tarter said.
As with many other minority and immigrant communities, bringing Hispanic families into the mortgage market is a continuing challenge, say officials at Federal Reserve Banks across the country.
Community groups from California to Atlanta have begun offering financial education classes in Spanish as the number of mortgage products available to immigrants and underserved populations has grown.
In Fresno, the housing advocate ACORN Housing Corp. helps clients secure loans by writing alternative credit profiles, which often draw on of months of data from telephone bills and employment records, said Lydia Lopez, the group's local manager. Once ACORN vets the client's financial stability, they send them to Citibank, which finances the home loans.
Automating that process by using programs like First American Corp.'s Anthem service, which generates a credit score using the nontraditional data, will help new immigrant clients win prime-grade financing and acceptance in the secondary market, said Acosta.
"But what happens to the loan when/if they are deported?"
They aren't, the fact that they are property owners allows them to apply and get perminant residence statis.
That is the scam they are pulling!
I saw it happen in Glendale just before Hong King went over to the communists. They came in, bought a house, usually before they ever set foot in this country sight unseen, and were given immediate legal residence statis.
more on ACORN (at least the fraud-vote group)
http://www.pipelinenews.org/index.cfm?page=acorn110306.htm
Swell. If we ever do start deporting illegal aliens in large numbers, government-backed mortgages will start defaulting and the taxpayers will be stuck with the bill.
Then I would suggest that you make sure your finances are in order and a bit of cash is on hand because someone with your background would have a better chance than the rest of us at being an overnight billionaire by buying up the defaults and renting back to the ones already living there.
The whole thing sucks but you might be in a position to make lemonade...
Seeking expert commentary...
I don't want illegals buying houses. I want them to go back home. That didn't take much expertise.
Ill second that but what do you see as its effect on the market should this come to pass?
The Department of Justice works for the President, whom I voted for twice, yet get berated as a Bush hater when it is pointed out that he is not actually the savior, but a fallible man that makes mistakes.
More buyers would tend to raise prices. Interest rates, however, will still have a significant impact on the housing market. If the illegals all went home, I would expect a decrease in prices that could be substantial. At least we would be able to access emergency rooms and drive on the freeway again.
I had discussed on a San Francisco talk show the effect of a serious drop in prices if massive foreclosures hit. The property will be taxed according to the new purchase price. The only reason that California is not bankrupt right now is that the skyrocketing housing values have skyrocketed the property taxes. If that revenue is lost, California is a goner as sure as was Mary Jo when Ted ran away.
It's FRAUD.
Tricks and mirrors to just make more commissioned loans.
Well, alot of people see illegal activities to their benefit. Are we going to stop hounding poor drug dealers and pimps? After all, it's just commerce...
susie
Did you read the entire article?
susie
susie
The last thing we need are artificially inflated prices for real estate because illegals, with no verifiable credit record, can now access borrowed cash for buying property.
Agreed. But what will happen is the same as in the Savings and Loan debacle: the phrase "too big to let fail" will again resound, and you and I will pick up the tab.
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