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

[NYN 0]

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)

[mawilson 2,133]

"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."

[peejay 327]

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.

[Fandango 1,439]

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.

[peejay 327]

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.

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.

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?

[rebeccajo 14]

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.

Edited February 11, 2008 by rebeccajo

[peejay 327]

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.

[britty 1]

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.

[mawilson 2,133]

Why aren't people bothering to read what they sign?

No puedo leer inglés.

[greeneyedgirlfl 0]

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...

[mawilson 2,133]

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.

[athena_ny 1]

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're conscientious with their money.

[greeneyedgirlfl 0]

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

[KarenCee 3]

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.

[rebeccajo 14]

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

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?