Tuesday, October 09, 2007

Housing Market for Undocument Workers Estimated at $85 Billion

Unlikely Mortgage Winner

Illegal-Immigrant Loans Have Been Solid Bets; Threats Are Looming
By MIRIAM JORDAN October 9, 2007; Page C1 WSJ
This WSJ provides some estimates of the housing market of undocumented workers...below are some excerpts from the interesting article... The housing market for ITIN homes is estimated at $85 billion. But it estimates that the niche market has generated only $2 billion in loans overall because relatively few banks offer them.

The mortgages represent a fraction of the $2.8 trillion mortgage market. But they are a bright spot in today's gloomy mortgage industry.

For loans more than 90 days in arrears, ITIN mortgages have a delinquency rate of about 0.5%, according to independent estimates. That compares with 1% for prime mortgages and 9.3% for subprime mortgages extended to those with spotty credit histories.

....ITIN-mortgage applicants are largely blue-collar, illegal-immigrant workers with only modest incomes. But they undergo more scrutiny -- and provide more documentation -- than candidates for stated-income mortgages and other subprime loans, for example. Most banks also ask applicants to show they have been filing taxes -- with an ITIN -- for at least two years.

Despite the high-yield potential of ITIN mortgages, the majority of players in the ITIN-mortgage segment are small banks rather than large national institutions. Concern over the controversy that can erupt over serving the illegal-immigrant community is widely regarded as preventing big banks interested in the Hispanic market from joining the fray.