Hannie Mae - Formalizing Lending To Illegal Aliens
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We live in a world where logic sometimes flies out the window. A land of laws where the laws are openly flaunted and then the illegality institutionalized. Did you know that the government is so concerned with getting tax money from illegal aliens that they created a special tax payer ID for foreigners who are not eligible for a legal tax payer ID. It is called the ITIN and now a whole mortgage product is built around them.
ITIN mortgages are becoming a part of the mortgage landscape in many states. Lending criteria to illegal immigrants is based upon their ITIN returns to the IRS. And to make matters more interesting, the Hispanic National Mortgage Association has now created a securitization process for these loans. The goals is the loans can be packaged and sold under the nickname Hannie Mae.
While it all makes sense on an intellectual and business level, it does have a stink to it. The United States is a land of laws yet the IRS sets up a program to tax illegal behavior in the ITIN. Then banks are lending money to people living in the country illegally based on their tax returns. Now Hannie Mae is creating a securitization of loans made specifically to those living in the country illegally.
Living in a land of laws, what happens if the immigrations services gets one of these loan bundles and raids the homes knowing that the homeowners are most likely illegal aliens. It is easy pickings for INS, these folks are advertising their status by taking out loans that are part of the Hannie Mae package. Then the buyers of the loans will be left hanging with a portfolio of loans that are all in arrears as the homeowners have been deported.
For a logical person, Hannie Mae could almost be a sting operation for the immigration service. And a very successful one in my eyes.
A few months ago, Hispanic National Mortgage Association, a privately held company nicknamed “Hannie Mae,” began buying ITIN mortgages from lenders. Once it has bought the loans, HNMA packages them into securities for investors. HNMA, which is based in San Diego, puts the ITIN mortgage market potential at $85 billion. But it estimates that the niche market has generated only $2 billion in loans overall because relatively few banks offer them.
The company has devised an automated underwriting system to help lenders evaluate ITIN borrowers. For example, its system enables banks to take into account secondary cash income, such as free-lance work performed on the side, as well as nontraditional households, where an extended family pools resources and income.
But the advent of the secondary market and the strong performance of ITIN mortgages have attracted more banks across the country. Currently, Illinois, Georgia, Indiana, Wisconsin and Texas are the top producers of ITIN mortgages, accounting for about 70% of the volume insured by MGIC. WSJ.com.
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Comment by Di M. on 10 October 2007:
The work arounds of the Hannie Mae really do say something about its sponsors; that they are not true Americans but are a hybrid of socialist-minded profit chasers. And of course, leave it to the unconstitutionally enforced IRS think tankers to hold hands with them.
Pingback by What is an ITIN and How is It Used in Real Estate? — The Real Estate Bloggers on 11 October 2007:
[...] ← Hannie Mae - Formalizing Lending To Illegal Aliens [...]
Comment by Mike on 11 October 2007:
one word “Politics.” well actually 2,… Politics and Greed.
It’s just more pockets for our lovely government to Milk along with the large corporations that hold hands with our government. All the media attention about controlling the influx of illegal aliens and they are offering them home mortgages?
Someone’s being fooled here…
It must be nice to easily write rules that put big bucks in your pocket, but if us simple folks step out of line they scream…..Illegal! and lock us up, that is until they say damn… thats a good way to make $$$$ let’s go ahead and legalize it.
What stupid title will the IRS come up with to hide their unethical profiteering “Transitional Americans”?
Comment by Mike on 11 October 2007:
How is this principle any different than the seemingly illegal actions of hiring illegal aliens?
Comment by Jeffrey Owen - Ion Home Inspection on 12 October 2007:
Incredible. What are we doing….. Subprime is in melt down already!
Comment by Emery on 31 October 2007:
Interesting that the media does very little to report of the percentage of subprime loans to illegals that have defaulted. Some report as high as 20%. So they import 30 million illegals and then figure out how to put them in debt immediately. We need to overturn the money changers tables of the FED in America.
Comment by Dominic Read on 14 July 2008:
Some time between 1993 and 1997 the INS stopped issuing social security numbers to legal aliens who were not permitted to work. This would include spouses and children of workers admitted with valid temporary work visas. This enables the temporary workers to pay US taxes and to be able to identify the other family members as legitimate dependants. Apparently this was done to prevent the confusion that might arise if a family member without the right to work had a Social Security Number - even though the Social Security Card was stamped - “Not Valid for employment”.
So - just becuase someone has an ITIN, does not necessarily mean that they are in the county illegaly.
Comment by Jay From Miami on 16 July 2008:
actually Banco Popular had a ITIN program last time i checked, i know that in 2006 the ltv was at 95%. LOL
These Lenders will doanything to make money
Regards,
Comment by Bill on 17 July 2008:
How does someone that is in the united states and obtained financing, and is now selling there home in a short sale situation provide documentation it is them when they have fake driver’s license, and how did they obtain a loan in the first place. They have itin #s but we just left a closing that blew up cause they had fake identification. How can I prove they are the sellers and close this transaction?
Pingback by Fed and Mortgages for Illegal Immigrants (2006) « What’s Arugula on 12 October 2008:
[...] Pages 46-50 are especially interesting as they concern mortgages issued with ITIN only. Fortunately, Fannie Mae would not touch ITIN-only mortgages, but other companies did purchase them. For example Hispanic National Mortgage Association would buy them and resell as securities. [...]