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Written by Jamie Simpson, LawServer Attorney-Editor
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Last Updated October 16, 2008 |
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Lenders that require stricter measures for mortgages issued to illegal immigrants claim that their programs have created a lower foreclosure rate among the group when compared to other homeowners, reports the Los Angeles Times. Loans issued in California and across the country used government-issued tax identification numbers, also known as ITINs, versus Social Security information for underwriting processes. Stricter measures such as larger down payments, pre-purchase counseling and fixed rates are attributed to the 1.15% deliquency rates versus 3.5% for U.S. citizens, measured in 2006. Proof of income, rather than traditional credit history, is the most important underwriting factor of these loans. A Chicago bank started issuing the taxpayer identification loans in 2000, which found their start through a partnership between Acorn Housing and Citibank. Mortgage Guarantee Insurance Corp. insured approximately 1,000 of the loans between 2004 and 2007, but has ceased doing so due to a recent lack of demand for the loans. The company relied on pay stubs and rent receipts for proof of income. Acorn states that the low delinquency rate among the group may be attributed to the fact that many have children that were born in the U.S., are business owners, and have plenty of money saved. Their extensive network of family members helps support homeowners who may face any type of financial troubles. Tax identification numbers were initially intended for use by legal immigrants, but it is widely accepted that illegal residents are the primary users.
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