Post by James Allan on Apr 25, 2013 21:25:56 GMT -5
This article is a snippit from the full article from Bloomberg Weekly
Bloomberg Business Weekly Article
Illegal Immigrants Getting Home Loans With Just A "Tax Payer Identification Number".
But corporations' willingness to overlook the status of this lucrative demographic target could further inflame opposition to illegal immigration. Consider the case of New South Federal Savings Bank. In May, the Birmingham (Ala.) company launched a mortgage product called Casa Mia, aimed principally at local Hispanic immigrants, a disproportionately undocumented group whose ranks quadrupled in the state, to 96,000, between 1990 and 2004. The program offers 20-year fixed-rate mortgages to applicants with two years of residency, stable employment, and an ITIN (Individual Taxpayer Identification Number . But within days of the announcement, New South received hostile phone calls and e-mails, some saying they were from Minutemen, the group patrolling the U.S.-Mexico border in Arizona and Texas. "I can think of no more traitorous act than you offering illegal immigrants, who are overunning this country, Casa Mia loans," said an e-mail that a bank official showed BusinessWeek.
Bank officials were even more troubled by a letter from a Washington group called Friends of Immigration Law Enforcement (FILE), which opposes illegal immigration. It threatened to sue the bank under a federal law that prohibits the harboring of illegal aliens and racketeering. By providing mortgage loans that help illegals buy houses, says FILE Executive Director Craig Nelsen, New South is aiding their ability to remain illegally. In June, the bank delayed a broad rollout of Casa Mia pending a legal opinion on potential liability.
Still, such confrontations are relatively rare. Mostly, U.S. companies are finding rapid growth among an underserved population hungry to taste more of America's rich consumer life. Among the first to embrace illegals have been financial companies, eager to tap into the billions in so-called mattress money -- the cash kept at home by illegals and others without bank accounts. When Wells and a half-dozen other banks got the green light from the U.S. Treasury in 2001 to accept the matr?cula, the magnitude of the market opportunity wasn't yet recognized, says Shelley Freeman, Wells Fargo's regional president for Los Angeles, who helped develop the program.
It quickly became apparent. Largely via word of mouth in Hispanic neighborhoods, Wells Fargo has opened 525,000 matr?cula accounts, which now represent 6% of the bank's total. It opens 800 new accounts a day across the 23 states in which it does business. Wells expanded the program to a Guatemalan matr?cula in 2002 and an Argentinian version in 2003. Last October, Colombia launched a pilot matr?cula program; El Salvador plans to offer a similar I.D. this fall. Since few immigrants apply for the matr?cula if they can legally obtain U.S. identity documents, immigration experts say, it's clear whom companies are going after when they accept it. Overall, 404 banks, thrifts, and credit unions, including Bank of America Corp. (BAC) and Citigroup (C), now accept the I.D., according to the Mexican Foreign Ministry. So do 391 city governments and 1,203 police and sheriff departments. Banks will be big winners: Fully 32% of all Hispanics lack bank accounts -- and even more among the illegal population. As much as half of all U.S. retail banking growth is expected to come from new immigrants over the next decade, according to the Federal Deposit Insurance Corp.
The success of the matr?cula has encouraged the expansion of other financial products, such as home mortgages, using the ITIN. Created for people such as foreigners with U.S. investments who aren't eligible for a Social Security number but still may owe U.S. income taxes, the agency issued 900,000 ITINs last year and a total of 8 million since 1996. In Chicago, Second Federal Savings has 620 ITIN loans worth $90 million. Expect the stream of new applicants to continue apace, say bank officials, especially now that state housing development agencies in Wisconsin and Illinois have agreed to start buying the loans. Cincinnati-based Fifth Third Bancorp (FITB), the nation's 13th-largest bank, began accepting the matr?cula in 2002 and introduced several ITIN products last fall, including mortgages, home equity lines of credit, and car loans. "We're committed to making the American Dream possible; our obligation is to provide products that allow people to assimilate into the U.S. economy," says Saul R. Boscan, Fifth's director of special initiatives in the Chicago region.
The result is a hot new market in the making. With hundreds of thousands of illegal alien households earning enough to qualify for $95,000 mortgages, according to the National Association of Hispanic Real Estate Professionals, ITIN and conventional mortgages taken out by illegals could be worth as much as $60 billion over the next five years. That's pushing big banks such as JPMorgan Chase & Co. (JPM) to examine the market and upping pressure on mortgage buyers Fannie Mae (FNM) and Freddie Mac (FRE) to create a secondary market for ITIN loans.
Bloomberg Business Weekly Article
Illegal Immigrants Getting Home Loans With Just A "Tax Payer Identification Number".
But corporations' willingness to overlook the status of this lucrative demographic target could further inflame opposition to illegal immigration. Consider the case of New South Federal Savings Bank. In May, the Birmingham (Ala.) company launched a mortgage product called Casa Mia, aimed principally at local Hispanic immigrants, a disproportionately undocumented group whose ranks quadrupled in the state, to 96,000, between 1990 and 2004. The program offers 20-year fixed-rate mortgages to applicants with two years of residency, stable employment, and an ITIN (Individual Taxpayer Identification Number . But within days of the announcement, New South received hostile phone calls and e-mails, some saying they were from Minutemen, the group patrolling the U.S.-Mexico border in Arizona and Texas. "I can think of no more traitorous act than you offering illegal immigrants, who are overunning this country, Casa Mia loans," said an e-mail that a bank official showed BusinessWeek.
Bank officials were even more troubled by a letter from a Washington group called Friends of Immigration Law Enforcement (FILE), which opposes illegal immigration. It threatened to sue the bank under a federal law that prohibits the harboring of illegal aliens and racketeering. By providing mortgage loans that help illegals buy houses, says FILE Executive Director Craig Nelsen, New South is aiding their ability to remain illegally. In June, the bank delayed a broad rollout of Casa Mia pending a legal opinion on potential liability.
Still, such confrontations are relatively rare. Mostly, U.S. companies are finding rapid growth among an underserved population hungry to taste more of America's rich consumer life. Among the first to embrace illegals have been financial companies, eager to tap into the billions in so-called mattress money -- the cash kept at home by illegals and others without bank accounts. When Wells and a half-dozen other banks got the green light from the U.S. Treasury in 2001 to accept the matr?cula, the magnitude of the market opportunity wasn't yet recognized, says Shelley Freeman, Wells Fargo's regional president for Los Angeles, who helped develop the program.
It quickly became apparent. Largely via word of mouth in Hispanic neighborhoods, Wells Fargo has opened 525,000 matr?cula accounts, which now represent 6% of the bank's total. It opens 800 new accounts a day across the 23 states in which it does business. Wells expanded the program to a Guatemalan matr?cula in 2002 and an Argentinian version in 2003. Last October, Colombia launched a pilot matr?cula program; El Salvador plans to offer a similar I.D. this fall. Since few immigrants apply for the matr?cula if they can legally obtain U.S. identity documents, immigration experts say, it's clear whom companies are going after when they accept it. Overall, 404 banks, thrifts, and credit unions, including Bank of America Corp. (BAC) and Citigroup (C), now accept the I.D., according to the Mexican Foreign Ministry. So do 391 city governments and 1,203 police and sheriff departments. Banks will be big winners: Fully 32% of all Hispanics lack bank accounts -- and even more among the illegal population. As much as half of all U.S. retail banking growth is expected to come from new immigrants over the next decade, according to the Federal Deposit Insurance Corp.
The success of the matr?cula has encouraged the expansion of other financial products, such as home mortgages, using the ITIN. Created for people such as foreigners with U.S. investments who aren't eligible for a Social Security number but still may owe U.S. income taxes, the agency issued 900,000 ITINs last year and a total of 8 million since 1996. In Chicago, Second Federal Savings has 620 ITIN loans worth $90 million. Expect the stream of new applicants to continue apace, say bank officials, especially now that state housing development agencies in Wisconsin and Illinois have agreed to start buying the loans. Cincinnati-based Fifth Third Bancorp (FITB), the nation's 13th-largest bank, began accepting the matr?cula in 2002 and introduced several ITIN products last fall, including mortgages, home equity lines of credit, and car loans. "We're committed to making the American Dream possible; our obligation is to provide products that allow people to assimilate into the U.S. economy," says Saul R. Boscan, Fifth's director of special initiatives in the Chicago region.
The result is a hot new market in the making. With hundreds of thousands of illegal alien households earning enough to qualify for $95,000 mortgages, according to the National Association of Hispanic Real Estate Professionals, ITIN and conventional mortgages taken out by illegals could be worth as much as $60 billion over the next five years. That's pushing big banks such as JPMorgan Chase & Co. (JPM) to examine the market and upping pressure on mortgage buyers Fannie Mae (FNM) and Freddie Mac (FRE) to create a secondary market for ITIN loans.
