Tuesday, February 19, 2008

Are Illegal Immigrants Causing the Mortgage Crisis?

In the Middle Ages, people used to blame plagues and crop failures on witches; now, many Americans blame everything from crime to unemployment on illegal aliens. Nashville’s own Rush-Limbaugh-Want-a-Be, Phil Valentine, makes the absurd assertion that the subprime mortgage crisis is a result of mortgage companies making mortgage loans to Illegal immigrants. (See: Stop Bank's catering to ….. ) He makes this leap in logic because the participating lenders in Project Lifeline make loans to illegal immigrants.

Project Lifeline is a program that will allow people facing a mortgage foreclosure an additional 30 days to try to work out a plan to avoid foreclosure. While it is true that several of the mortgage companies involved in Project Lifeline do make loans to illegal immigrants, these are the largest mortgage companies in the nation and they make loans to everyone. Only a very small fraction of their loans are made to illegal immigrants. There is absolutely no evidence to suggest the sub prime crisis is a result of loans made to illegals. Mr. Valentine offers no evidence to support his conclusion.

One has to be cautious in making leaps in logic like the one that Mr. Valentine made. These same mortgage companies also make loans to red headed people and people with the last name of “Valentine.” Valentine not only does not offer proof, he does not even show a correlation.

People who carry cigarette lighter have a higher incident of lung cancer. That is a correlation, but even that does not show cause and effect.

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1 comment:

  1. Although, I don't believe that illegal immigrants are the sole reason for the mortgage crisis, their participation did facilitate the downfall. I have personally witnessed lenders that approved home loans to those people who did in fact provide false SS#'s and other documentation, including pay-stubs and W-2's. These illegal immigrants would only frequent mortgage brokers who specialized in procuring loans for "undocumented immigrants". Moreover, Lenders who bought and sold these loans were the first lenders to fall when the sub-prime mortgage crisis started...the correlations are there...good post www.myinformedvote.com