Economic 9/11 and Illegal Immigration

[Rick Oltman]

Economic 9/11 and Illegal Immigration
By Rick Oltman

As the current financial problems unfolded one pundit called it an “Economic 9/11,” referring, of course, to a calamity of previously unknown size and destruction and I flashed back to the morning of 9-11-2001. As I watched the twin towers collapse on television my phone began to ring. Immigration reform activists and friends from around the country were calling to ask if I thought any of the hijackers had sneaked into our country across the porous southern border, or escaped detection because our immigration system was too lax. “Probably some did,” I answered. “But we will have to wait to see if they can identify the hijackers to know for sure.” And we subsequently learned that several of the hijackers did indeed take advantage of Washington’s lack of enforcement of our immigration laws. We still don’t know how some got in. We paid a big price in lives and money for that attitude. And, we are still paying for that federal irresponsibility, today.

As a couple towers of our financial market began to collapse again I got calls. “Did illegal aliens cause this?” “Cause it? Probably not,” I opined. “But we can be pretty sure they contributed to it.” Just how much they contributed to it we will only know if a thorough investigation is done about the roots and causes of the subprime mortgage market collapse. An investigation must be done, if for no other reason than to prevent this kind of thing from happening again. The part of the investigation that we’re most interested in is how illegal aliens contributed to the problem, as they contribute to all of our social problems.

In 2002 President Bush set a “clear goal” of increasing minority homeowners (“African-Americans, Hispanics and other minorities”) by 5 1/2 million families by the end of the decade. Thus far we have learned that banks were directed by regulations, coerced by the Fed and threatened with lawsuits by community activist groups to make subprime loans in low income minority communities. When you make lots of loans to people who can’t afford to pay if the economy even hiccups, you have built a house of cards on a foundation of cards.

A look at any of the “foreclosure maps” posted on the internet and you will get an idea where foreclosures are the highest—in border states and city centers that are, perhaps not co-incidentally, swollen with illegal aliens. California is no shock, since the Golden State has the highest number of illegal aliens. Other heavily impacted areas are Arizona, especially the Tucson area and several Texas counties that border Mexico and cities across the country known as so-called sanctuary cities.

A New York Times editorial from October 26, 2007 accurately predicted the local impact, “The foreclosure crisis is set to cause a lot of pain in the months ahead. The maps indicate that the pain will fall disproportionately, with African-American and Hispanic neighborhoods especially hard hit.”

By removing all the tenets of sound banking principals the real estate market was flooded with new buyers, some subsidized with Section 8 money (yes, there is a Section 8 program that pays 70% of the monthly mortgage) and the buying accelerated. As always the law of supply and demand was enforced and the new buyers began to drive up prices. Home prices increased faster than inflation and required that each subsequent sub-prime loan be a little larger, requiring a little bigger monthly payment until, as we all know by now, the bubble burst.

If, as we all suspect, illegal alien sub-prime mortgage holders contributed to the inflation as their buying pushed prices up how did they qualify or even get the loans? What kind of proof of identity did they use?

Remember the Matricular Consular card? This worthless Mexican I.D. card had been around for years. It publically surfaced about a month after 9/11 when immigration reformers around the country were calling for secure I.D. cards after learning that the hijackers had used fake documents to secure dozens of state driver licenses. (The “9/11 and Terrorist Travel” report states, “The 19 hijackers used 364 aliases.”)

Matricular Consular cards, with no background check or central data base, began to be handed out at Mexican Consulates, at supermarket openings and at any event where large numbers of Hispanics could be found. And, to much chagrin, American banks began to accept the Matricular card to open up accounts. (Ironically Mexican banks will not accept the MC as proof of identity.) Well, one small step for a bank account, one giant leap to subprime mortgage holder.

And then there is the ITIN, Individual Tax Identification Number. The ITIN is almost exclusively used by people who don’t have (read can’t get) a social security number.
Use of either the ITIN or the Matricula Consular for identity purposes should be considered probable cause for being in our country illegally.

The U.S. mortgage market is $12 Trillion. Subprime loans make up 6.8% and according to one study, Hispanics constitute 14 percent of the borrower community and received 20 percent of the subprime loans. Do the math if your calculator that will accommodate so many zeros. The amount of subprime loans held by Hispanics is approximately $163 billion. Now the question is; how many of them are illegal aliens?

How much of the subprime market is illegal alien loans? $50 Billion, $100 Billion, more? We need to know. To paraphrase that great Illinois statesman, Everett Dirksen, "A hundred billion here, a hundred billion there, pretty soon, you're talking real money."

Most of the subprime loans will not likely default. Many will struggle to make their payments. They will want to stay where they are even if they are upside-down equity wise. They like the neighborhood, the schools and their home. They will ride it out and hopefully will survive financially to see better times.

How about illegal alien borrowers? Will they ride it out? Will they make best efforts to weather the economic storm and meet their financial commitments? Did the loan officer even get their real name? Or will they just walk away like they do from a traffic accident or like 600,000 have from their deportation orders? Is it easier for them to assume a new identity with a new name and a new Matricula card?

As with most of our social problems, illegal immigration didn’t cause this, it just made it worse. Crime? We already have it, illegal alien criminals add to it. Schools? Already overburdened they are collapsing under the weight of illegal alien students. Healthcare? Strained with some hospitals collapsing from years of supplying free healthcare to illegal aliens. Environment? Over 80% of our nation’s population growth is from legal and illegal immigration. Mortgage meltdown? Well, yes, it seems that illegal aliens have contributed to that too.

We need a national commission to research this mortgage mess and explain to the country, how we got here…with details.

Most dilemmas, like those above, are composed of several components, not just one thing that can be removed by radical surgery thereby solving the problem. And it is these components that one analyzes to determine a strategy for solving the problem. Likewise, solutions have many components.

The illegal alien component to our social and, now, financial problems should have been dealt with 15 years ago. It can be dealt with today. But Washington will resist. The reason the Democrats and Republicans won’t do anything about illegal aliens? It is not only for the cheap labor, but also for the consumers they become with that first paycheck.

That one-two punch has reduced wages for working class Americans and pushed up the prices for many things, including that one thing that almost everyone wants, a home. Well, home prices are falling. Let’s make sure during the next cycle that home loans are made to qualified buyers. And, at least get their real name.

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10-7-08

[Buzzm1]

HUD: Five Million Fraudulent Mortgages Held by Illegals
Tuesday, October 7, 2008

Some five million fraudulent home mortgages are in the hands of illegal aliens, according to the U.S. Department of Housing and Urban Development.

It's not known how many of those have contributed to the subprime housing mortgage meltdown, but it has affected every state, including Arizona.

The problem began years ago when banks were forced to give mortgages without confirming social security numbers or borrower identification. As a result, illegal immigrants were able to obtain home mortgages which they could not afford.

One illegal alien was arrested this year in Tucson after allegedly using a stolen social security number to buy two homes and rack up over $780,000 in bad debt.

http://kfyi.com/pages/local_news.html?f ... le=4364653


Thomas D. Elias: Banking crisis: The scapegoating begins

We are just now beginning to see the scapegoating that was probably inevitable in the great American banking crisis, just as it always seems to follow after any man-made disaster of colossal proportions.

No financial catastrophe of the last 70 years has been as widespread or severe as the collapse of 2008, one which seems to find a huge bank going belly up or getting seized and sold off every few days.

http://www.appeal-democrat.com/articles ... orian.html

[Rick Oltman]

It is not scapegoating to assert that illegal aliens have added to the subprime mortgage meltdown. In 2002 President Bush set a “clear goal” of increasing minority homeowners (“African-Americans, Hispanics and other minorities”) by 5 1/2 million families by the end of the decade. And now that these risky loans have become the catalyst in the current economic chaos, it is not "racism" to ask what part of this problem is attributed to illegal aliens. It is an honest question that should be asked since illegal aliens contribute to all of our social problems.

The old days of trying to squelch a debate by crying "racism" are over.

Ignoring the problem won't solve it, it will perpetuate it.

So, let the whining begin. Questions will be asked, and answered, about how many billions of dollars of the bailout reflect bad loans to illegal aliens. We will then add that cost to all the other costs of illegal aliens in our country.

That cheap labor isn't so cheap after all, is it?

[Joanie]

I totally agree with your post and I found it very interesting, thank you. I am outraged and have been for years. I've been speaking my mind to friends and family members about the crisis our nation faces with Illegal Immigrants and I always like to add this word, a key word (ILLEGAL). I'd like to hear more from our candidates on this VERY IMPORTANT ISSUE because which ever one I believe will start an Immigration Reform....I will vote for. My question for other Capsweb users; Which candidate do you feel is more for reforming our Illegal Immigration crisis?