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Opinion, commentary and analysis on everything that makes the U.S. housing economy tick -- not to mention the ghosts in the machine, too. Written by HW's team of editors and reporters each business day.
Lending

Immigration debate is now officially on the housing industry table

Who should be able to get a mortgage?

February 14, 2014

The immigration debate is a controversial issue in and of itself, but if a local housing event is any indicator, it's now slamming itself directly into the politics of housing.

So I'll ask a loaded question: should people without a Social Security number be allowed to get a mortgage? (Bear in mind you can, of course, always buy a house without a mortgage assuming you have the means -- and many people without SSNs certainly do have those means.)

Wells Fargo & Co. (WFC) held an event in Dallas this past Thursday for the launch of its Dallas NeighborhoodLIFT program, an initiative offering $6.15 million from Wells Fargo to boost homeownership and strengthen neighborhoods in the city’s low- and moderate-income areas.

Of the $6.15 million, $5 million will go toward down payment assistance grants and program support. Eligible homeowners can reserve $15,000 down payment grants and must commit to live in the home for five years and qualify for a first mortgage on the property. 

But one question stood out during the question and answer session at the event. A reporter asked the Mayor and bank representatives if the down payment assistance grants would be available for people without a SSN — and the answer is that DAP funds are not.

The question led the press session off track into a broader debate about the need for immigration reform, and a call to action from the Dallas mayor.

But lest I digress, let's stay on point here.

According to the Social Security Administration, there are two ways people can apply for a SSN when they are non-citizens. People can apply in their home country before they come to the United States when filing an application for an immigrant visa with the U.S. Department of State. Also, people can visit a social security office in person once stateside, and just have to bring their papers from the Department of Homeland Security showing their U.S. immigration status and authorization to work in the United States.

If you fulfill either of these requirements or were originally born in America, you can obtain a Social Security number.

But what if someone doesn't have one? Should people be allowed to get a mortgage if they do not have a SSN -- or, more specifically, don't fulfill these requirements?

From my point of view, the requirements to get a SSN are not exactly over the top, at least on the surface of things. But I'm not a foreign national who's attempted to go through the process.

That said, the entire debate over immigration status, Social Security numbers and mortgages seems sort of like a tempest in a teapot. After all, it's not as if a Social Security number is a requirement to get a mortgage loan right now, anyhow. There are already mortgage lenders that will offer mortgages to foreign nationals using only an individual taxpayer identification number (ITIN) -- no Social Security number required. (A simple Google search shows some options here.)

And these ITIN mortgage programs are expanding, too.

Business & Community Lenders of Texas, a nonprofit economic development organization providing business lending, SBA and community development programs, said at the event that their organization is currently working on rolling out a product for families with only an ITIN number.

Back in December, I published an article that cited how the Bipartisan Policy Center believes immigration reform in America would broaden and accelerate the current housing recovery.

The Center did note, however, that they only examined the economic costs and benefits of such reform. The report does not evaluate potentially complex issues regarding the security of our borders, adequacy of interior enforcement or the host of non-economic costs and benefits that diverse immigrant populations contribute to our society.

Which is a pretty big disclaimer, so far as disclaimers go.

Nonetheless, the issue remains and discussion is growing louder -- and in a mortgage market that is quickly focused on finding buyers any way it can to continue to drive loan growth, expect to hear more about immigration issues and mortgage access in the months and years ahead.