No more loans to illegals

Here is Tom Tancredo on the proposed bailout:

Dear Colleague,

In the midst of the turmoil in our financial markets, we should take pause to reflect on the lessons we have learned in the past few years. With the benefits of that wisdom, we can include the prudent provisions that will close loopholes in any potential “bailout” legislation. One such suggestion is to incorporate safeguards to verify the legal residency and identity of potential homebuyers to ensure that illegal aliens are not obtaining federally backed home loans.

I sent a letter to the Secretary of HUD a year ago about this very concern. I also pressed the agency to disclose the extent to which this type of fraud is contributing to volatility in the mortgage markets. I believe this kind of fraud has contributed to the tumult we are seeing in the headlines daily.

I have seen this ugly issue up close, as a Colorado-based mortgage fraud ring in which realtors, loan officers, and sales agents were indicted and arrested for obtaining federally-backed loans for some 250 unqualified buyers by manufacturing false financial information, fraudulent identities, and bogus citizenship documentation. All of the 191 houses involved were purchased with HUD-guaranteed loans. According to one expert, banks in Colorado alone lose upwards of $75 million per year to fraud – so I can only imagine what the numbers are like nationally.

I recognize that any infusion of foreign investment – especially now – is a welcome addition to our capital-starved market. But there is a difference between the wealthy foreign real estate investor or financier of a vacation home, and the inherently unreliable illegal aliens who are prone to fraud and may be forced by circumstances to return to their home nation at any point. Certainly, we should seek to differentiate between these two categories of buyer.

Including a mechanism to make sure that taxpayers are not providing any assistance to illegal aliens, or absorbing any bad debts owed to financial institutions (such as mortgages) by illegal aliens is a “must” for any “bailout” legislation. If such protections are not included in the package, I hope you will join me in opposing its passage.

We need to ensure that the ‘American Dream’ remains within reach of American families – and that means enacting some long overdue safeguards that prevent illegal aliens and their unscrupulous allies in the financial industry from undermining its integrity.