AS panicked politicians prepare to fork over $1 trillion in
taxpayer funding to rescue Wall Street, they've fingered regulation,
deregulation, Fannie Mae and Freddie Mac, the Community Reinvestment
Act, Jimmy Carter, Bill Clinton, both Bushes, greedy banks, greedy
borrowers, greedy short-sellers and minority-home-ownership promoters
But there's one villain that has slipped notice: how illegal
immigration, crime-enabling banks and open-borders Bush policies fueled
the mortgage crisis. It's no coincidence that the areas hardest hit by
the foreclosure wave - Loudoun County, Va., California's Inland Empire,
Stockton and San Joaquin Valley, and Las Vegas and Phoenix - also
happen to be some of the nation's largest illegal alien sanctuaries.
Half of the mortgages to Hispanics are subprime. A quarter of all those
subprime loans are in default and foreclosure.
Regional reports across the country have decried the subprime
meltdown's impact on illegal-immigrant "victims." A July report showed
that in seven of the 10 metro areas with the highest foreclosure rates,
Hispanics were at least one-third of the population; in two of those
areas - Merced and Salinas-Monterey, Calif. - Hispanics comprised half
the population. The National Council of La Raza and its Development
Fund have received millions in federal funds to "counsel" their
constituents on obtaining mortgages with little to no money down; the
group almost succeeded in attaching a $10 million earmark for itself in
one of the housing bills passed this spring.
For the last five years, I've reported on the rapidly expanding
illegal-alien home-loan racket. The top banks clamoring for their
handouts as their profits plummet, led by Wachovia and Bank of America,
launched aggressive campaigns to woo illegal-alien homebuyers. The
quasi-governmental Wisconsin Housing and Economic Development Authority
guaranteed home loans to illegal immigrants.
The Washington Post noted in 2005: "Hispanics, the nation's
fastest-growing major ethnic or racial group, have been courted
aggressively by real-estate agents, mortgage brokers and programs for
first-time buyers that offer help with closing costs. Ads proclaim:
"Sin verificacion de ingresos! Sin verificacion de documento!" - which
loosely translates as, 'Income tax forms are not required, nor are
immigration papers.' "
Fraudsters also have engaged in house-flipping rings using illegal
aliens as straw buyers. Among many examples the FBI cites: a conspiracy
in Las Vegas involving a former Nevada First Residential Mortgage
Company branch manager who directed loan officers and processors in the
origination of 233 fraudulent Federal Housing Authority loans valued at
over $25 million. The defrauders made and submitted false employment
and income documentation for borrowers; most were illegal immigrants
from Mexico. To date, the FBI reported, "Fifty-eight loans with a total
value of $6.2 million have gone into default, with a loss to the
Housing and Urban Development Department of over $1.9 million."
It's the tip of the iceberg. Thanks to lax Bush administration
policies allowing illegal aliens to use "matricula consular cards" and
taxpayer-identification numbers to open bank accounts, mortgage fraud
has grown. Money-lenders still have no access to a verification system
to check Social Security numbers before approving loans.
In an interview about rampant illegal-alien home-loan fraud, a
spokeswoman for the US General Accounting Office told me five years
ago: "Considering the size of Los Angeles, New York, Chicago, Houston
and other large cities throughout the United States known to be
inundated with illegal aliens, I don't think the federal government is
willing to expose this problem for financial reasons as well as for
fear of political repercussions."
The chickens are coming home to roost. Law-abiding taxpayers are going to pay for it.