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.

Why Somalis are Welcome in Louisville

Today's WSJ (Miriam Jordan) has a story of Somalis immigrants in Louisville Kentucky. The city for various reasons including an aging population has adopted a welcoming approach to immigrants. The city's Mayor Jerry Abramson calls them "internationals" and presents "international awards" to individuals, organizations and companies working to integrate the immigrants in their community.

"It's not that the city has a 'Let's go and find immigrants' approach," says Randy Capps, a senior research associate at the independent Urban Institute in Washington, D.C. "It hopes that by being a welcoming place, more immigrants will want to settle there."

Louisville has not actively gone out and recruited immigrants but some of them found their way here through the refugee allocation process.

From 1990-2004 - the foreign born population has jumped 388 % in the city. 80 languages are spoken in their schools.

For data on immigrants and minorities please visit http://ethnictrends.info

The Hispanic Vote (WSJ Article)

The WSJ September 15 documents some interesting facts on the Hispanic Vote:

• Hispanics make up 8 percent of the electorate and are projected to become 20% of the electorate by 2020
• 48 % of Hispanic voters are foreign born up from 18 % in 1988
• Hispanics may decide elections in the following states: New Mexico, Arizona, Florida, Nevada, Colorado

According the the WSJ, "Latinos are proven swing voters, and Republican energies would be better employed trying to win them over instead of trying to capitalize on ethnic polarization to win GOP primaries." visit http://www.ethnictrends.info for data on ethnic markets

Hispanics' Hard Times Hit Wal-Mart

Results of U.S. Housing Slump Are Felt On Both Sides of Border With Mexico

By KRIS HUDSON and ANA CAMPOY August 29, 2007; Page A8, Wall Street Journal

• The Mexican central bank estimates that money transfers into the country have risen 0.6% so far this year, compared with a robust 15% increase last year and 21% the year prior. Money transfers from the U.S. are estimated by economic-analysis firm Global Insight Inc. to account for 5% of Mexico's consumer spending.
• Money transfers from the U.S. are estimated by economic-analysis firm Global Insight Inc. to account for 5% of Mexico's consumer spending.
• WalMex racked up $18.3 billion in sales last year, accounting for nearly a quarter of the retailer's international sales and ranking it as Wal-Mart's second-largest international division behind its Asda unit in the United Kingdom.
• An estimated 9% of Wal-Mart's U.S. shoppers were Hispanic in 2005, up from 6% in 1997, according to ACNielsen.

Racism and Health

Interesting article in the Boston Globe on possible impact of racisim on health status of victims.

The Point System and Immigration Reform

There is considerable debate about the Point System proposal for immigration reform. The Migration Policy Institute website http://www.migrationpolicy.org/news/2007_05_18.php does a good job in giving a global perspective on the issue. Who are the winners and losers? Winners - Immigrants with skills, English abilities and education Losers - Immigrants with low skills, poor English abilities and poor education Employers might not like this proposal as it takes away their control of the process, ie, who they want to employ and puts the decisions in a centralized system. People with extended families might not like this proposal because the preference for families, primarily nuclear families are embedded in the point system and do not have a separate category like the present system. People who want a bigger say in who gets into this country will like this system because it puts a premium on skills and other criteria deemed important. One thing we have to watch out for is that we do not get boxed into a rigid system. The Toronto Star reported that the point system brought high skilled people to Canada but could not get them jobs. Many high skilled immigrants are thus under employed. Consequently Ontario is pushing for a system where they could bring in more workers more fine tuned to the current needs of the region. Ultimately this is the question of the American identity - should we have an open immigrant system like the days of old or should we control it according to some value system or the capacity of our economy to absorb the immigrants? This is not an easy answer - but one way or the other we need comprehensive immigration reform that is open, flexible, fits in with the traditions of this country and considers the capacity of the country to present meaningful opportunities to the immigrants searching for a better life.

Latest Data show Immigration Benefits MN Cities

Bruce P. Corrie, PhD corrie@csp.edu Latest Census data show many Minnesota Cities and Counties benefited from Immigration. Among the Metropolitan areas facing negative internal migration and being positively impacted by net interntational immigration are the MSP metro area and the Grand Forks - Fargo Metro Area. Among the Micropolitan areas facing negative internal migration rates and being positively impacted by net international migration are: Albert Lea, Austin, Fairmont, Marshall, New Ulm, Wahpeton, Willmar, Winnona and Worthington. To see the data please visit http://ethnictrends.info/Market%20Research.html

Latest Data show Immigration Benefits Austin

Bruce P. Corrie, PhD Professor of Economics Concordia University-St. Paul corrie@csp.edu Latest Census data show that Austin lost 1241 people due to internal migration during the period 2000 and 2006. However international immigration increased Austin's population by 640. Latest Census data reveals that cities all across the United States are benefiting from the inflow of immigrants to compensate population decline due to natural reasons as well as migration to other cities. In the case of Austin, the net addition to Austin's population during the same period due to natural reasons, ie, birth and deaths was 796. Net migration out of Austin was 601. Net international immigration was 640. For more information please see the Census Report: http://www.census.gov/population/www/estimates/CBSA-est2006-comp-chg.html

$50 Billion Tax Payments from ITIN (Illegal Workers)

Today's WSJ reported that illegal workers in the United States are required to pay taxes and are given an ITIN number. I found a testimony of IRS Commissioner Everson to the House Ways and Means committee where he provides more details around the WSJ article. He thinks that most of these payments are from the undocumented workers (see link above). Today's WSJ gave an example of a tax filing of Pablo Espinoza a welder earning $42,000 and an illegal worker. "Last year, $1,464.88 in Social Security and $342.60 in Medicare were deducted from Mr. Espinoza's wages. His wife paid several hundred dollars in Social Security and Medicare, too. In addition, $3,508 in federal taxes was withheld from their combined salaries. Mrs. Castillo figures they will get a $3,462 refund from the IRS, putting their total federal tax bill at $46." Note while he can get a refund - he is a net contributor to Social Security and Medicare. In his testimony to Congress - IRS Commissioner Everson was making a case for comprehensive reform. WSJ reference http://online.wsj.com/article/SB117564081607858869.html?mod=hps_us_editors_picks

MN Trade Mission to India

Minnesota Governor Announces Trade Mission to India in October, 2007

31 January 2007

Saint Paul, MN: Governor Tim Pawlenty has announced that he will lead a delegation of Minnesota business executives on a trade mission to India in October to explore trade and investment opportunities and make inroads with key Indian and U.S. business organizations.

“Strong economic growth is unleashing a wave of demand in India. From consumer goods to professional services, high-tech to health care, machinery to processed foods – the prospects are abundant,” Governor Pawlenty said. “It’s important that we make these connections firsthand.”

The 30-member delegation will travel to New Delhi, Bangalore, and Mumbai October 20-27, 2007 for a series of market and industry presentations, networking events, roundtable discussions and one-on-one business events with potential Indian customers, distributors and partners.

India’s gross domestic product grew an average 7 percent per year between 1994 and 2004 and recently has tracked at nearly 9 percent. U.S. manufactured exports to India reached $6.8 billion in 2005, an increase of 111 percent since 2000. Minnesota’s manufactured exports to India grew 208 percent to $85 million over the same period.

Promising sectors include computers and electronics, machinery, medical products, biotechnology, and food processing. In addition, Indian companies have ambitious plans for expanding and diversifying manufacturing activities, particularly in the automobile, auto parts, metals, chemicals, pharmaceuticals and electronics industries, creating opportunities for Minnesota suppliers.

At a press conference announcing the trade mission, Governor Pawlenty acknowledged the role that the local Asian Indian community played in the development of the trade mission to India. “I want to acknowledge local Asian Indian leaders present, my Chief Information Officer Gopal Khanna, State Senator Satveer Chaudhary, leading entrepreneur Mahendra Nath and Professsor Bruce Corrie of Concordia University,” Governor Pawlenty said.

The local Asian Indian community applauded the decision to lead a trade mission to India. A group of Asian Indian leaders and community members proposed a plan for a trade mission to India at the request of the Governor two years ago.

Minnesota is among the top ten states in the US in the rate of growth of exports to India. Between 2000 and 2005 exports grew over 200 percent.

Minnesota Public Radio story: http://minnesota.publicradio.org/display/web/2007/01/30/india/

TV: http://www.kare11.com/news/news_article.aspx?storyid=240655

Official Package on the Mission: www.deed.state.mn.us

Contributions of Asian Indians to MN; http://ethnictrends.info/Market%20Research.html

Minnesota Exports to India: http://ethnictrends.info/Market%20Research.html

For more information relating to the Asian Indian community please contact Dr. Bruce Corrie, Professor of Economics at Concordia University at 651 641 8226 or corrie@csp.edu.

For more information on the Governor Pawlenty’s Trade Mission please contact the individuals below:

Contact Tony Lorusso, Executive Director, Minnesota Trade Office

Phone: 651-297-4657 Fax: 651-296-3555

E-mail: tony.lorusso@state.mn.us

OR

Contact Jodi Boerner, International Trade Representative, Minnesota Trade Office

Phone: 651-297-4646 Fax: 651-296-3555

E-mail: jodi.boerner@state.mn.us

Impact of California 209 on Minority Firms

Bruce P. Corrie, PhD A recent study evaluates the the impact of Proposition 209, the California Civil Rights Initiative, in 1996 which ended programs to provide greater access and use of minority firms in public projects.

In 2006, the Discrimination Research Center (DRC) issued a report on the impact of Proposition 209, the California Civil Rights Initiative that ended race-conscious goals and affirmative action programs on minority businesses. Major findings of the report were:

1. Only a third of the certified MBEs in California’s transportation construction industry are in business now.
2. Existing MBEs reported a greater than 50 percent reduction of total awards and contracts from Caltrans.
3. MBEs reported that the aspects of the federal race conscious efforts such good faith efforts by prime contractors and pre-bidding conferences were less helpful after 1996.
4. Among the surviving firms, African American and minority female owned firms were the most negatively impacted.
5. The surviving MBEs could not have initially succeeded or maintained their success without the incentives that helped provided them equal access to bids. http://drcenter.org/studies/free_to_compete_06.pdf