The role illegal aliens played in the mortgage crisis (and continue to play)

After writing several articles about this country’s mortgage meltdown and the little-talked about role which illegal aliens have played in this crisis, a woman who I will call “Mary” contacted me, as she wanted to expose the fraudulent practices which eventually brought about the disastrous collapse. What follows is a brief interview I conducted with Mary. (I am protecting her identity because she still works in the mortgage business.)

Q) What is your background and who have you worked for?

A) I am in the Mortgage Industry and personally audited thousands of sub prime loans while working as a contractor. The last company I worked for was EMC, previously owned by Bear Stearns so I thought I would share the caveat on these loans.

Q) When my wife and I bought our home, we had to provide a mountain of documentation, including federal tax returns. How have the mortgage lenders allowed illegal aliens to enter into a mortgage loan without the proper documents?

A) The Sub Prime underwriting guidelines had special requirements for, what was called, Foreign Nationals….30% down and full credit package including credit references from their country of origin and a valid Visa. To circumvent this requirement, the applications were marked that the borrower was a US citizen then, regardless if the credit profile did not support such a claim, an underwriter was not allowed to question the application.

This along with use of stolen SS# or use of their American born child’s SS# and lax credit requirements that allowed alternative credit, helped cover the ruse. All required documentation was fraudulent and with the large use of a/k/a’s, information was hard to track.

Q) What did management do when it was discovered that a stolen Social Security number was being used by a borrower?

A) It was not uncommon to find a SS# being used by up to 23 other people or a borrower with 27 a/k/a’s. Management would often clear a loan that you tagged as fraudulent so it wouldn’t be shelved.

Q) What was the worst case you have seen?

A) One borrower stole the SS# of a retiree and took out $3.5 million in loans, turned around and did cash-out refi’s, then fled the country. The retiree was left with ruined credit, $3.5 million in loans and trouble with the IRS. Over 50% of the sub primes were for cash-out refi’s.

Regardless of the loan criteria used to pull random samplings for audits, the majority of the last names were Hispanic. The loans I audited were primarily in CA, NV, AZ, FL, CO, compare those to the states with the highest number of foreclosures & illegal aliens.

Q) What is your opinion on the $750 billion bailout engineered by former Treasurer Hank Paulson and approved by Congress?

A) During the bailout, I called my Congressman and other leadership including Barney Frank and asked if there was a provision within the Bill that prohibited illegal aliens from being bailed-out…..the answer was no. I asked if there was a provision in the Bill that helped homeowners that did not take out sub primes but are faced with losing their home due to the negative impact of sub primes and was told…..no. So in other words, those that committed crimes to obtain the loans will get a helping hand to bail them out, compliments of the US Taxpayer!

Q) Any final thoughts?

A) I cannot tell you how angry I am over this and you are right…..Congress will not talk about it. I have written to mine [Congressman] several times over the last year, yet my only response is their standard form letter. When I call and demand an answer, I have been told someone will get back with me, of course that never happens. Looks like we are picking up where we left off before the bail-out.

If Mary’s observations did not anger you, I am certain that the next bit of information will do the trick.

Of course, we all know that, on October 26, 2001, President Bush signed the USA Patriot Act. However, I would wager to say that almost no one knows that contained in section 326(b) of the USA Patriot Act is a provision that allows US banks to accept Mexican Matricula Consular cards as a valid form of ID for opening bank accounts.

It should be noted that while our President and Congress ordered American banks to recognize these Mexican-issued cards, there is not one Mexican bank which accepts their own government’s Matricula Consular card as a valid form of ID, because the bearer’s identity is basically untraceable.

The following is a list of U.S. banks (both regional and national) and mortgage insurers which are known to offer home loan programs targeted at illegal aliens:

-Bank of America
-Citigroup
-Deutsche Bank AG
-Fifth Third Bancorp
-Genworth Financial Inc.
-J.P. Morgan Chase
-Liberty Financial
-Mortgage Guarantee Insurance Corp.
-Plaza Bank
-Wachovia
-Wells Fargo

So there you have it. Those elected to represent we the American people, decided instead to represent the bankers and allow illegal aliens to borrow money, often using the stolen Social Security numbers of American citizens. This so-called sub-prime mortgage crisis was actually nothing more than a massive case of fraud.

And why not?…The banks who made the loans have lost nothing, because the taxpayers have been forced to bail them out for their risky and even illegal loans.

However, that is not where the story ends.

Russell George, Treasury inspector general, recently told the Dallas Morning News that thousands of illegal aliens have been taking advantage of the $8,000 first-time homebuyer credit included in the $787 billion stimulus bill.

George reports that 1,000 applications contained a taxpayer identification number, commonly used by illegal aliens, have been submitted from the state of Texas alone.

Though illegal aliens are not eligible for the credit, a 2009 Treasury Department investigation revealed claims totaling $20.8 million for the federal program, by non-citizens.