FAIR-Washington
With American financial markets facing severe crises meriting intervention from the federal government, several experts have recently argued that granting subprime mortgages to immigrants - both legal and illegal - have played a role in bringing about the current economic decline. During "the boom years," many immigrants took out high-interest fixed-rate loans or subprime mortgages with a low entry rate that later rose sharply in order to buy homes in the United States that they could barely afford. (Reuters, January 30, 2008)
The National Council of La Raza (NCLR) pointed out in April of last year that recent immigrants often turn to subprime lenders for several reasons. (USA Today, April 25, 2007) According to NCLR, 35% of Hispanic families do not have checking accounts. Furthermore, recent immigrants typically do not have credit histories and are more likely to have undocumented income. This in turn causes immigrants to seek out lenders who do not require income verification. Additionally, subprime lenders have been supported by politicians and community organizations wishing to promote minority homeownership. The subprime crisis led NCLR last year to call for a moratorium on subprime home foreclosures. (Id.)
Subprime loans have been instrumental in bringing about a recent fourfold increase in home foreclosures in Barnstable County, Massachusetts. (Cape Cod Online, July 3, 2007) Pam Parker, a mortgage prevention counselor at the Housing Assistance Corporation in Barnstable County, observed that many immigrants had taken these loans "because they don't know our language and they don't know our culture." (Id.) In 15 San Diego County, California zip codes - where home values have fallen as much as 40% - roughly 45% of home loans granted in 2005 and 2006 were subprime. (The San Diego Union-Tribune, July 20, 2008) According to Gabe del Rio, vice president of lending and homeownership at San Diego-based Community HousingWorks, many of the individuals who come to his agency for financial counseling are recent immigrants who spoke little English and did not understand the terms of their subprime loans. (Id.)
The National Council of La Raza (NCLR) pointed out in April of last year that recent immigrants often turn to subprime lenders for several reasons. (USA Today, April 25, 2007) According to NCLR, 35% of Hispanic families do not have checking accounts. Furthermore, recent immigrants typically do not have credit histories and are more likely to have undocumented income. This in turn causes immigrants to seek out lenders who do not require income verification. Additionally, subprime lenders have been supported by politicians and community organizations wishing to promote minority homeownership. The subprime crisis led NCLR last year to call for a moratorium on subprime home foreclosures. (Id.)
Subprime loans have been instrumental in bringing about a recent fourfold increase in home foreclosures in Barnstable County, Massachusetts. (Cape Cod Online, July 3, 2007) Pam Parker, a mortgage prevention counselor at the Housing Assistance Corporation in Barnstable County, observed that many immigrants had taken these loans "because they don't know our language and they don't know our culture." (Id.) In 15 San Diego County, California zip codes - where home values have fallen as much as 40% - roughly 45% of home loans granted in 2005 and 2006 were subprime. (The San Diego Union-Tribune, July 20, 2008) According to Gabe del Rio, vice president of lending and homeownership at San Diego-based Community HousingWorks, many of the individuals who come to his agency for financial counseling are recent immigrants who spoke little English and did not understand the terms of their subprime loans. (Id.)
