Illegal Immigrants Are Good Lending Risks
Illegal immigrants can make good home buyers, according to a new study.
Undocumented immigrants — those who aren’t legal permanent residents — who have an individual taxpayer identification number (ITIN), good credit, and proof of tax filing can qualify for a fixed-rate “ITIN mortgage.”
Less than 1 percent of ITIN loans have gone into foreclosure, according to the Hispanic National Mortgage Association. That compares with 1.2 percent for prime mortgages and nearly 11 percent for subprime mortgages given to borrowers with poor credit history, according to the Mortgage Bankers Association.
The Internal Revenue Service has issued more than 12.5 million taxpayer ID numbers since 1996 to foreigners who weren’t eligible for a Social Security number, including visa holders legally in the United States, spouses of U.S. citizens, and undocumented workers.
Community banks and credit unions began accepting the nine-digit numbers from mortgage applicants in 2000, most of them illegal immigrants with modest incomes. Most large banks are still reluctant to accept these numbers. By law, banks must verify customers’ identity, but they don’t have to check immigration status.
Source: Charlotte Observer, Deborah Hirsch