Illegal Alien Mortgages
Federal Government Helps Out
By Daniel Muniz

Not only were illegal aliens Javier and Araceli Garcia able to buy a house, they were able to do so with the generous assistance from the Federal government as well from the state of Wisconsin and a local bank in Milwaukee.

Of course such a transaction is entirely impossible unless there is plenty of cooperation between federal, state, and local entities. Only citizens and legal resident aliens have complete access to all of the resources that allow legitimate financial contractual agreements of this scale to take place. So in order for an illegal immigrant to be able to qualify for a mortgage, let alone be able to actually purchase a house, more than one organization has to bend the rules while also quietly overlooking or openly flaunting certain laws.

First of all, the Internal Revenue Service provided this married couple of illegal immigration status with an Individual Taxpayer Identification Number (ITIN). This tax registration number allows illegal aliens to legitimately circumvent the need for a Social Security Number that is required to apply for a mortgage. And providing these tax registration numbers is nothing new since the IRS began issuing ITINs in 1997 in hopes of getting more foreigners who cannot acquire a social security number to file income tax returns.

The fact that Javier and Araceli Garcia are breaking the law by staying in this country without any legal right to do so is totally irrelevant to the IRS since they do not take immigration status into account when they distribute these identification numbers to any foreigner who applies for them. However, the IRS is definitely not as permissive or as accommodating if they think you are breaking other laws when it comes to reporting your taxes.

And to banks that do business with illegal aliens, this IRS issued identification number is simply substituted for a Social Security Number, especially since they are provided by a federal entity.

And there are other federal agencies that are also willing to lend a helping hand.

The Federal Deposit Insurance Corporation (FDIC) actually encourages banks to originate mortgages as well as to provide other financial services to anyone living in underserved markets even if such customers are here in this country illegally. The FDIC does not penalize or reprimand any financial institutions that provide such services to illegal aliens even though laws have to be broken and certain regulations have to be ignored. And in some instances, that means using falsified documentation and even stolen identities.

Ironically, federal law apparently sides with these federal agencies.

For instance, the FDIC enforces the statute that requires financial institutions to lend and invest in underserved markets and in the communities that their deposits come from. And if the local communities are thickly populated with illegal aliens, so be it because by federal law, banks are required to offer such people their services.

And many state governments are also getting into the act too.

Since Fannie Mae and Freddie Mac do not participate in mortgages for illegal immigrants that means that such loans cannot be securitized into the secondary market. As a result, a local bank would have to hold the note itself instead of being able to spread the risk within a large portfolio. And that is where a state government would step in such as Wisconsin for Javier and Araceli Garcia. The Wisconsin Housing and Economic Development Authority helped finance the loan and assumed any risk involved in it.

Other states also have similar programs that help with financing for illegal immigrants.

And of course, local and national banks want a piece of the pie since there are now approximately 12 million illegal aliens in this country which easily translates into millions of potential customers especially since there are states that are willing to assume the risks of such transactions.

Illegal immigrants still have to meet a criterion for credit but there are ways around that too. Unlike everyone else who has to provide a credit history and a credit score, banks simply use other factors that do not show up on credit reports such as monthly rent and utility payments. Even character references are also allowed.

However, not everybody in Wisconsin is thrilled. Republican State Rep. Steve Kestell says:

And neither are people throughout the country, particularly the ones who live in states that have similar programs.

Buying a house is perhaps one of the most important decisions for nearly all families. However, if people are living in this country illegally, then obtaining citizenship or at least a legal residency status should be the top priority. There are millions of foreigners who have already legitimately purchased a home in the United States by obeying the law and following the rules. If illegal aliens continue to break the law with their immigration status, then they should not be allowed to buy a house or have governmental agencies and banks to help them out.

And most importantly, our federal laws are a joke and are often contradictory. Consequently, they have to be cleaned up so that it is explicitly clear that if you are in this country illegally, then you are not going to get any governmental assistance at all, period. And that includes looking the other way when falsified documents or stolen identities are used for mortgages and for other financial transactions. That too has always been a crime and just because someone is an illegal alien doesn’t mean that they should be exempt from breaking the law when it comes to identity theft.

Although certain state governments will continue to assist illegal immigrants in obtaining mortgages, more restrictive rules and better legislation at the federal level, like stop giving out tax registration numbers to illegal aliens, will make it much more difficult to circumvent the laws.

Unfortunately, these mortgages represent easy money to plenty of banks. And money is a prime motivating factor for a lot of these financial institutions. As a result, they are constantly trying to influence legislation and governmental agencies to acquiesce to assisting illegal aliens. And by reaching out to the poverty warriors for support, these banks are trying to give the impression that these mortgages are helping alleviate poverty in addition to lining a banker’s pocket.

And as the immigration reform debate rages on, it is time to stop providing access to illegal immigrants who seek mortgages as well as access to other financial resources like credit cards. Such circumvention only encourages more illegal immigration and greatly limits the opportunities to our own citizens and to the legal immigrants who are obeying the law. But most importantly, it is time for Congress to enact better legislation that prevents illegal aliens from beating the system.

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