Citibank Provide Cheap Home Loans to Illegal Aliens
Citibank is quietly providing home loans to illegal aliens at better rates than they offer to citizens. Janine ZÃºÃ±iga reported this in the San Diego Union-Tribune almost a month ago but went below my radar screen.
A major U.S. bank has funded its first home loans to undocumented Mexican immigrants in San Diego County in a move that targets a lucrative, wide-open market while providing new grist for the debate over illegal immigration. The local program, which uses tax identification numbers instead of Social Security numbers, is similar to programs run by small lenders — and two state agencies — around the country that have distributed millions of dollars to undocumented immigrants over the past few years.
“There is a huge untapped market out there, but it is a controversial program,” said Sarah Lumbert, office director of San Diego’s ACORN Housing Corp., part of a national group working with Citibank to provide tax-ID loans. ACORN members, advocates on housing issues for low-and moderate-income people and Citibank have quietly recruited applicants in the county for more than a year. Their program has ramped up slowly because applicants need to establish credit and hunt for an affordable home.
Only two tax-ID mortgages have been processed locally, but about 10 local Citibank loans to undocumented immigrants may soon be finalized with the help of ACORN, the Association of Community Organizations for Reform Now. The nonprofit organization receives much of its funding from the Department of Housing and Urban Development. Tax-ID numbers are used by those who need to report federal taxes but are not eligible for a Social Security number, usually because they are undocumented. Until the past few years, lenders would not — and most still do not — accept anything but a Social Security number for home loans. Wells Fargo recently seized on the market, joining Citibank as the only nationwide banks offering tax-ID loans. Wells Fargo started its pilot tax-ID loan program in Los Angeles and Orange counties in December.
Often, family members pool resources to afford the county’s pricey market. With Citibank, as many as eight people can sign for a mortgage.
[T]here has been no movement by Washington lawmakers to put a stop to the tax-ID loans, and the government routinely issues tax-ID numbers. The IRS has issued such numbers since 1996 to foreigners to encourage them, regardless of their immigration status, to file tax returns. There is nothing illegal about the loans. Congress has passed a series of fair-lending acts, similar to the 1977 Community Reinvestment Act, that ensure equal access to mortgages for low-income and minority households.
After frantic calls for help, Estela found ACORN Housing. She received a 30-year fixed mortgage at 5 percent interest, 1 percentage point lower than the standard rate. It costs $780 a month. Estela’s home was appraised at $565,000.
Something’s not adding up here: $565,000 at 5% over 30 years should mean a mortgage payment of $ 3,033.04 a month. At the standard rate of 6%, it would be $3,387.46. Even at 5%, the most one could borrow for $780 a month is $145,100. (See any mortgage rate calculator.)
I blame the Congress, however, and the public at large. Citibank and Wells Fargo clearly see an untapped market here and are trying to make a living. While I don’t understand how they can justify lending money to illegal aliens at a lower rate than offered to citizens, it’s really their business so long as they are within the law.
The problem, then, is the law. Why do we pretend that we do not want undocumented workers in the country and have a large Border Patrol on the one hand and then mandate educating, collecting taxes from, issuing drivers licenses to, and other such things for them? Either they are criminals or they are not. The current policy makes them technical criminals but simultaneously sends the signal “please come and take our low paying, menial jobs.”
It’s time to pick one.