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Illegal Immigrants Good Mortgage Risk

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Some banks allow illegal immigrants to obtain a home mortgage even if they don't have a Social Security number. While the borrower's citizenship status may be undocumented, their ability to pay is thoroughly checked out. Surprisingly, illegal immigrants are often a good risk.


We've heard a line in recent months about rising foreclosure rates. Here's a story about a group with a surprisingly good track record of keeping up with the mortgage payments - illegal immigrants.

NPR's Scott Horsley has this story of one man. And because of his immigration status we are only identifying him by his first name.

SCOTT HORSLEY: Manuel(ph) has spent more than a decade hanging dry wall in the high-rise hotels and casinos of Las Vegas. Now, he finally has four walls to call his own. A year-and-a-half-ago, Manuel barrowed $213,000 to buy a house in Las Vegas for himself, his wife, and their two children.

MANUEL (Immigrant): (Spanish spoken)

HORSLEY: It's a little small, he says, but he's happy to have it. His kids now have their own bedroom and bath. Then to home loans, which broker the mortgage, was careful to make sure Manuel could afford the monthly payments of about $2,000. They asked about his work history and the bills he's paid in the past. What they didn't ask about was his immigration status. Manuel qualified for the loan using an individual tax ID number, which you can get even if you're in this country illegally.

Jason Madiedo, the president of Venta Home Loans says his companies made 20 to $30 million worth of loans to illegal immigrants. He's a child of Colombian immigrants himself.

Mr. JASON MADIEDO (President, Venta Home Loans): Homeownership played such a big role in my family's financial security. It's something that you want to do. It gives you the warm fuzzies and at the same time it's also good business strategy because it's not a market that's really being tapped. And it's a strong market.

HORSLEY: In fact, the repayment record on loans to illegal immigrants is excellent with only about one-tenth has many default as subprime loans. Many illegal immigrants have both the income and the desire to own a home, but they need some special attention to get a foot in the door. They often have little or no credit history, so Leonardo Simpser of the Hispanic National Mortgage Association in San Diego uses other means to see if a would be borrower is a good risk.

Mr. LEONARDO SIMPSER (Managing Director, Hispanic National Mortgage Association): Paying rent, for example, is an essential trade line that we look at. The late pay to utilities sometime. Do they have a cell phone? Do they remit money to other country on a regular basis?

HORSLEY: That kind of careful screening is one reason illegal immigrants have made good borrowers. Marketing director Scott Hastings of Citizens Home Loan in Charlotte, North Carolina, says another factor is cultural.

Mr. SCOTT HASTINGS (Director of Marketing & Distribution, Citizens Home Loan): Whether they're from Mexico or Honduras or Asia somewhere, it sort of the same code of ethics where you save money and pay your bills on time. It's just not ethical to not pay your bills.

HORSLEY: Hastings thinks more lenders would be going after this market if it weren't such a political hot potato. After he was quoted in a newspaper story about the illegal immigrant mortgages, Hastings received a mountain of hate mail from anti-immigrant activists.

Mr. HASTINGS: Here's a great one. Mr. Hastings, are you aware that among the illegal alien population are some of the most violent criminals in the U.S.A.? You are part of the problem since these criminals will keep on raping children and murdering innocent Americans, it would only be fair that they get your kids and your wife. You're a disgrace. Sincerely. So that was nice.

HORSLEY: That kind of sentiment hasn't stop mortgages for illegal immigrants, but the credit crunch largely has at least temporarily as investors shy away from all but the most plain vanilla home loans. Still, lenders say if more money becomes available, they'll go back to making the loans. Illegal immigrants are not a scary group of people, Hastings says, they just want to own a home and they pay their bills.

Scott Horsley, NPR News, San Diego.

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