Hi everyone,
I saw this in my yahoo newspage and thought I would share. My fiance would be, I think, employed in the construction industry initially after he gets here, and I am sure many others out there might bfind themselves in a similar situation.

Immigrants hit hard by U.S. slowdown and subprime crisis


WASHINGTON (Reuters) - As an economic slowdown and the subprime mortgage crisis deepen across the United States, Hispanic immigrants are increasingly in danger of losing their jobs and their homes.

Both legal and illegal immigrants joined Americans in buying homes they could barely afford when the market spiraled upward and many have been caught with mortgages higher than the value of their homes as prices have slumped in the past year.

Just as subprime mortgage payments rose and house prices fell, the economy's slowdown has hurt the construction sector, which employs large numbers of Hispanics and other immigrants.

Unemployment among Hispanics in the United States jumped to 6.3 percent in December, up from 5.7 percent the previous month and well above the national average of 5 percent, U.S. Department of Labor statistics show.

And almost half of the mortgage loans in the hands of Hispanics are subprime, making them especially vulnerable to the housing downturn.

"Economic conditions are deteriorating and many immigrants now can't work those extra hours or find that second job to keep up with their mortgage payments," said Aracely Panameno at the Center for Responsive Lending (CRL) research policy group.

Nelson, a 29-year-old legal immigrant and construction worker from El Salvador, had a miserable run of luck in November, when he lost his job and his subprime mortgage bills jumped $650 to about $2,650.

He says he now has to sell the home he bought in Maryland in 2005. If he is unable to sell in the next four months, he will have to foreclose, meaning an even bigger financial loss and a damaging black mark on his credit record.

"I have to practically give it away," he said.

Like many caught up in the crisis, the father of three said he had no idea his monthly payments would soar two years into the mortgage when he closed the adjustable-rate subprime deal.

"You have to sign a lot of things when you buy a house, so I didn't read, I just signed. I think it was the anxiety, the happiness of buying my house," he said. "I feel a bit betrayed."

RECESSION FEARS

U.S. President George W. Bush and Congressional leaders are working on an economic stimulus package worth almost $150 billion to fend off a possible recession, and Bush last month unveiled a plan to slow the wave of home loan foreclosures by freezing the rates on some subprime loans.

But experts say most of the immigrants in financial trouble are either not entitled to help under the rescue plan or are not taking advantage of it.

There are around 43 million Hispanics in the United States, making them the country's largest minority, and Mexicans and Central Americans account for the vast majority of some 12 million illegal immigrants.

Tighter immigration laws and police raids have added further pressure on illegal workers and residents.

"There is less work, and more fear (of deportation)," said one Mexican illegal immigrant who lives with his family in Kansas. "Employers are relying more and more on you having a Social Security number in order."

Although there is no formal tally, Mexican consular sources say a growing number of illegal immigrants across the United States are starting to pack their bags and return home.

Illegal immigrants were able to buy U.S. homes during the boom years, either by showing evidence that they pay taxes or by simply presenting false documents.

Many of them took out high interest fixed-rate loans or subprime mortgages with a low entry rate that later rose sharply. Experts say language difficulties made them more vulnerable to being offered, and taking, bad deals.

"They were more exposed to abuse," said Alejandra Louden of the Congressional Hispanic Caucus Institute's housing department, which carried out a recent study on Latino home loan foreclosures. "Documents were in English and explained in Spanish, and some vital explanation would be missing."

(Editing by Kieran Murray)

It's just one more example of the greed and sleaze that has dominated government and business in the USA for too many years. The Robber Barons and crooks have had a field day with no responsible adult supervision in sight. No wonder the American people are so disgusted.

Peejay, usually I agree with pretty much everything you say BUT I have to disagree with you this time to a certain extent. Banks are not philanthropists....the onus is on the individual who took the loan. No one needs supervision when they're buying a house. If they want to get into all sorts of dodgy loans, that responsibility is on them....the bank is certainly not holding a gun to anyone's head.

Considering the magnitude of the problem and the fact that the Federal government is trying to shore the mess up after the fact. This kind of makes it a public policy problem created by the private sector. The banking industry is already regulated anyway and shoddy business practices always end up producing more regulations.

The sleaze and greed I also was refering to was the fact the article brings up about the huge numbers of illegal aliens involved in this joke from the get go. From huge numbers working illegally in the housing industry to buying homes using bogus documentation to the banks knowingly doing business with illegal aliens in general. In Texas a huge chunk of the housing industry involves illegal labor. The whole stinking mess it is imploding on itself. The chickens have come to roost. But for who? Most of the players in this will likely walk away and leave the mess for someone else to clean up.

None of this sorrid business does squat for a vast majority of Americans. Just another train wreck. Who do you think will eventually have to clean it all up and ultimately pay for the excesses?

Peejay.

I think they are gonna make Peejay write a personal check to clean it all up.

That's what I think.

I'll personally make sure it's a rubber check.

Why aren't people bothering to read what they sign? We all have to consider how much we can afford when purchasing a home, and also factor in future earnings, and the likelihood of retaining salary. I have heard so many times that language is a barrier for a lot of people where English is not their first language. There are thousands of Realtors and lenders out there who speak a multitude of languages, and you only have to surf the web to find someone in your area who can help with your purchase. It is not a viable excuse to complain that you have been duped or betrayed. You have the same access to information as everyone else does, and if you are adult enough to make a home purchase, then you are adult enough to face the consequences when the housing market doesn't go your way. Of course banks are going to lend to someone who appears to qualify for a loan. They are a business and mortgage loans are a major source of revenue for them.

No puedo leer inglés.

I don't understand how an illegal alien with limited earning potential could afford to buy a home...I have been employed as a teacher for 14 years and there is no way I can afford to buy a home...

They work hard, pay no taxes and spend next to nothing.

They're conscientious with their money.

Define "conscientious"...I have no credit cards, spend within my budget, save $ in every paycheck, hardly go out...

I am a teacher as well...but didn't buy a home until my husband (the immigrant) was here and working full time. THEN we bought. On my own, no...there was no way I could buy a house. We also went through USDA Rural Development to get a loan since we qualified by virtue of our low income status. We read EVERYTHING we signed...our lawyer at the closing discussed EVERYTHING with us so we knew what we were signing. We knew what we could afford and USDA wouldn't let us borrow more than we could realistically pay back. There was a ton of paperwork involved but I would do it again to get the loan we have. BTW, we didn't have a problem with my husband only having the 2 yr conditional GC.

This is just OUR experience and in no way should be construed as the best way or implied that this will work for everyone in every situation.

Maybe it's not so much how 'good' you are with your money, but more to do with what kind of home you would like to buy?

Or the area in which you live. My friend who lives outside of Atlanta easily purchased a house on her husband's resident salary (not a lot), and couldn't fathom why I didn't own my own home in Connecticut.

True. But in the context of this discussion, it might not matter.

greeneyedgirlfl or Caladan may not be willing to live in a home or an area that an immigrant might consider just fine. No matter what area of the country (house price wise).

I'm not inclined to disagree with anything in the article, but I think this is simply indicative of a general state of affairs across the country with individuals at all socio-economic strata. In fact, I'd be inclined to say that the crisis appears not so much with immigrants that are in low paying jobs, but rather within the demographics of the upper eschelon income earners. In a state of chaos, the minimum wage earners aren't always the first to be laid off!

That certainly may be part of it...maybe another part of it is the unwillingness to live with 10+ of my family members in the same house...

I live in an in an apartment in an upper middle class neighborhood; there are plenty of illegals living here (even in my complex). They qualify by having someone else (who has enough provable income) sign the lease, then they move in with themselves and their extended family. Even though this is technically breaking the lease (by subletting it), they rarely get caught, and if they do get caught, not much is done about it. I'm sure it's just as easy to do the same thing with a house.

Uh, if you buy a house it's your's to do with as you wish. If they want 10 people living there, that's their thing.

And living with large family groups is not so much a symptom of the illegal, but rather a symptom of America's isolated view of family. My husband lived with a lot of family when he was in his country, and a lot of countries are like this. More developed countries who think it's "weird" and "dirty" are the exception, not the rule.

However, we DO live in developed country where 10+ people are the exception, not the rule. I simply stated something that I have observed: the breaking of residency laws in apartments and someone qualifying for a residency under false pretenses (whether it is rented or owned).

Depending on where you live...just because you buy a house doesn't necessarily mean you can do as you please when it affects your neighbors. Have you ever heard of deed restrictions?

The houses in my 50 year old neighborhhood are deeded as "single family dwellings". Also, there are also restrictions on running a business out of your house, restrictions on remodeling / modifications to your house, and a host of other restrictions to protect the integrity of the neighborhood community. And these restrictions have been upheld and enforced throughout the years.

We had a situation with a guy running a landscaping business out of his 2 story house and housing his illegal alien employees there. There were landscaping trucks parked up and down the street in addition to heavy traffic in an otherwise quiet neghborhood due to numerous individuals living in the house.

There have also been attempts to install group homes for the retarded and/or mentally ill in the neighborhood. These violations were eliminated by the 50 year old deed restrictions. So you think that is cruel and mean? These deed restrictions also stop group homes (halfway houses) for ex-cons too. Would you want that in your neighborhood?

No...in my neighborhood you cannot do anything you want to just 'cuz you buy a house.

deleted to not feed into the rampant ignorance on VJ

A difference of opinion from yours does not imply "ignorance," simply a difference of opinion. Peejay and I were only stating our particular situations.

It IS illegal in my county of residence to have more than 2 people per bedroom per apartment living in a single apartment. It IS legal in certain deed restricted communities to place limits on things the homeowners can do. That is reality, not a value judgement.

I have never implied that I think anyone is a lesser person ("dirty" is the word you used) for wishing to live the way they do. I choose to not live that way, so I choose to live in an area where the rules favor that lifestyle. I resent people doing ILLEGAL things to circumvent the rules. And that would be applied to everyone, legals, illegals, and USCs.

Instead of bickering about whose lifestyle is better or worse, people in this country need to address the issues of affordable housing (or rather the lack of it).

greeneyedgirlfl, have you ever been to your banker or mortgage broker to inquire about your housing options? There are many programs out there to help people with small downpayments purchase a home. And they aren't 'subprime scams' or only available sporadically.

Owning a home can be more affordable than you think.

PS - Regarding the multi-family thing, at one point in his childhood, my husband had an aunt and a grandmother living in the family home with he and his parents. I do think that in many countries, including those in Europe, the 'family unit' isn't defined in the same nuclear manner we define it here.

Thanks for the idea, RJ, and when Darren comes over, we may look into it. I have been burned by a disreputable mortgage company (still in litigation over it) and, until that is resolved, I am not interested in owning. Plus, I don't know if I will stay in FL (My family has lived in the Central FL area for about 5 generations, but I'm not sure I want to stay here); and with the housing market as it is, I can't take a chance in not being able to sell a home and move.

But when I get to the point of purchasing again, I will take your advice to heart. Thanks!

Yikes. That's scary. Can you give us the name of the mortgage company or an idea of what happened? Things are so much different here than what I am used to, and that makes me uneasy.

The company had several names, but is out of business now...all of their assets are tied up in the same lawsuit (class action).

Just be careful if your mortgage is sold to another company. I had a fixed 30-year mortgage with payments (mortgage and escrow for insurance and taxes included) of $750 a month (in 2001). The original company (OC) sold it to a shell company which was owned by the OC. They didn't send me any correspondence to the change of status. This all happened right before the time of year that my insurance and taxes were due. They failed to pay my insurance, and since I "didn't have insurance" they "force-placed" insurance on me that was 5 times the cost my original insurance. The escrow was raided to pay the insurance; therefore, I had no money to pay my property taxes and still had money due for the balance of the new insurance. The new mortgage payment was about $1400, which at the time was only $250 less than my entire net pay. Since I live in FL, my old insurance carrier couldn't reinsure me since they were taking no new homeowner's policies. During this debacle, the mortgage was sold two more times to more shell companies of the OC.

Here's the kicker: the usurious insurance company was also owned by the same motgage company!

When the company tried to foreclose on me, I finally gave up trying to fight it and sold my house. I made a nice profit from it, but it has left a bitter taste in my mouth to buy another home....at least for the time being.

It's next to impossible in today's world to obtain a mortgage that won't be sold. It's just the way that particular business operates these days. I have had mortgages that were sold; one was sold three times during the several years I had the loan.

There had to be something else 'unscrupulous' going on with this lender's procedures, or else they would still be in business and there would not be a class-action lawsuit.

It probably sounds like I'm defending the lender - I sure as heck am not. I've been in the lending/legal business for nearly 25 years and my boss is on the ethics committee for the WV State Bar.

The crisis seems to have hit first time homebuyers hardest. Predatory lending practices are easier to fall for when you're the first person you know to buy a home and don't have a good sense for what is normal, and don't have the cash from selling another house to have as a good downpayment. (People here scoff at why that would matter, but people here say 'wait, the I-864 means I have to give up my own USC rights to public services, too. People aren't good at reading forms.) It caught up some keep-up-with-the-Joneses types, too.

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Illegal immigrants get into apartments the same way legal immigrants who don't yet have jobs do. Someone who has a SSN and a job signs the lease and lists everyone else as an approved occupant. Or they do illegal sublets.

Gosh. That is HORRIBLE, GEG. Just horrible. I am so sorry you had to, and are going through, all that. My heart goes out to you.

The biggest issue was selling the mortgages multiple times (mine was 3 times in the space of 4 months) and not informing us until they almost doubled our mortgage payments...the issue was not informing us of the sale.

They are definitely supposed to tell you where to send your new payments. Each time my loan was 'churned' I was usually notified well in advance.

A pool of loans being sold 3 times in the course of 4 months is not the normal course of business. Something else was afoot, and I'd bet my right leg it had something to do with a predatory lender trying desperately to stay afloat.

Not until the person loses their job and is unable to make their payments...