Last spring, a Wisconsin housing agency launched a first-in-the-nation program largely aimed at helping illegal immigrants secure mortgages backed by the state government. Within months, the Wisconsin legislature voted to stop it. The bill to do that is pending on Gov. Jim Doyle’s desk.
Yet Gov. Rod Blagojevich plans to copy the Wisconsin initiative, ignoring the concerns about creating special benefits for illegal immigrants that prompted lawmakers in Wisconsin to intervene so rapidly. Under Blagojevich’s plan, the state will back below-market-rate loans for people who have little or no credit history, no bank account and no Social Security number. The loans wouldn’t be limited to those who are here illegally, but that’s clearly the primary target.
That means if the borrower defaults on the mortgage–say, the borrower is arrested and deported–the state’s taxpayers would be on the hook for the balance of the loan.
There are believed to be as many as 11 million illegal immigrants living in the U.S. Eyeing the big market potential of this population, some lenders have begun extending mortgages to workers despite their inability to document their legal status.
Assuming that risk is a business decision that lenders make. But there’s no reason for the state to shift the financial risk away from participating lenders and onto taxpayers, which is what Blagojevich’s program would do.
Supporters of this idea argue that many illegal immigrants are also hard-working taxpayers, and offering access to loans regardless of their legal status can protect them from falling prey to predatory lenders. Supporters of the $15 million Illinois initiative say it will encourage home ownership, especially among Latinos, and lead to more stable communities.
This page has strongly supported immigration reforms that would provide better border enforcement and help some of those who have been living and working here to earn legal status. But the government should not be creating special benefits for those who are here illegally–benefits that could wind up costing taxpayers.
The U.S. sends out conflicting signals when it comes to illegal immigrants. They are officially unwelcome, yet are drawn here by a ready supply of low-paying jobs that many businesses and private homeowners offer with few questions asked. Even as the federal government seeks to deport illegal workers, it makes available to them a form of identification called an Individual Taxpayer Identification Number. It is used in drawing taxes from their pay.
Congress and the White House are currently wrestling with these conflicts in a debate over tightening border security, permitting more legal guest workers and establishing a broader legalization process. Those are issues to be resolved on a national level. They won’t be resolved by Blagojevich putting his constituents on the hook when someone defaults on a home loan.
