According to House Representative from California John T. Doolittle’s website, new legislation is in the works to stop dozens of banks from lending to illegal aliens. A loophole in the law currently allows loans to applicants with an Individual Taxpayer Identification Number (TIN) in lieu of a Social Security number (SIN). Bank of America recently started issuing credit cards to illegal aliens with a TIN that has recently received a lot of bad press.
Plan could close mortgage option
Washington, Feb 25 -
New legislation on Capitol Hill seeks to curb an increasingly popular
mortgage concept: providing home loans to applicants using their Individual
Taxpayer Identification Number in lieu of a Social Security number.
Taxpayer numbers are issued by the Internal Revenue Service to
assist immigrant workers who do not qualify for a Social Security number — but
do have taxable income — to report their income and pay federal taxes.
Dozens of banks around the country have begun offering home mortgages to
undocumented immigrants using taxpayer numbers, but their programs generally
have been low-key and small in volume. Bank of America stirred controversy
earlier this month when it announced a pilot program in Los Angeles to provide
credit cards to resident alien customers who lack Social Security numbers but
have taxpayer numbers.
Some critics charged that the bank was seeking to
profit by helping illegal immigrants who should be deported or prosecuted, not
extended consumer credit. Bank of America said its program is legal and may be
rolled out nationwide if the pilot is successful.
Now a bill has been
introduced in Congress that would prohibit financial institutions from providing
home mortgages to anyone who lacks a Social Security number. The bill (HR480),
introduced by Rep. John Doolittle, R-Rocklin (Placer County), would amend the
Truth in Lending Act to make mortgage lending using taxpayer numbers illegal.
Doolittle’s office released a statement that said in part: “The
government should not be in the business of creating incentives to encourage
illegal behavior. Nor should companies be permitted to reward those individuals
in clear violation of our laws.”
Proponents of lending to home buyers
based on taxpayer numbers say Doolittle has it all wrong. Tim Sandos, president
and CEO of the National Association of Hispanic Real Estate Professionals, said
Doolittle’s bill would be extremely disruptive and affect far more people than
the illegal immigrants the measure purports to target.
Sandos estimates
that there are as many as 7 million to 8 million resident aliens in the United
States who do not have Social Security cards, but are in some phase of the
immigration process leading to citizenship. That process can take years — often
more than eight years — and “meanwhile these individuals are working here,
earning incomes, paying taxes, contributing to the economy.”
They “are
not illegal,” said Sandos, “they are undocumented. The government knows exactly
who they are and where they are.” Doolittle’s bill, he added, “is the equivalent
of trying to drive a tack with a sledgehammer.”
Sandos’ group, which is
comprised of Latino and non-Latino representatives of banks, real estate firms,
developers, home builders and real estate service providers, conducted a study
that concluded if mortgage companies made greater use of taxpayer numbers to
extend home loans to qualified buyers, $44 billion in new mortgages — primarily
to first-time buyers — could be originated.
Geoffrey Cooper, director
of emerging markets for MGIC Investment Corp., a major private mortgage
insurance firm, said lenders in roughly 40 states are already making mortgages
to customers using taxpayer numbers. MGIC’s role is to provide insurance against
losses to lenders in the event borrowers default or go to foreclosure.
Cooper said his company’s program was initiated at the request of
community banks and other local lending institutions that found that many of
their customers who lacked Social Security numbers — but had taxpayer numbers
for tax purposes — earned solid incomes, had stable employment histories and
excellent payment histories on debt obligations.
Under MGIC’s program,
underwriting standards are strict, with mandatory documentation of income,
assets, residency and other criteria — stricter standards, in fact, than many
lenders impose on applicants who have Social Security cards.
Home buyers
with mortgages obtained with taxpayer numbers “perform like ‘A’ credit
borrowers,” said Cooper, and they qualify for MGIC’s most favorable insurance
rates because they are so dependable.
Janis Bowdler, senior housing
policy analyst for the National Council of La Raza, a Hispanic advocacy group,
said the home buyers who use taxpayer number mortgages should be seen simply as
“hardworking, taxpaying families who want to participate in the American dream,”
even if they do not yet have Social Security numbers because of their
immigration status.
Sandos noted that making Social Security numbers
mandatory to obtain a mortgage also could affect the ability of Asian, European,
South American and other foreign investors who simply want to buy a house or
condo in the United States for periodic visits but not full-time residency.
That, in turn, could prompt foreign governments to impose restrictions on the
ability of American citizens to buy real estate abroad.
This is great to know our national banks and the Federal Reserve have been supporting illegal workers with our banking system.
