Home Loans for the Undocumented
The Illinois Housing Development Authority will soon offer home mortgages to people who do not have social security numbers or a credit score. In the place of traditional ID, the state agency will accept taxpayer identification numbers issued by the IRS. The agency says the program will protect potential homebuyers from predatory lending. Wisconsin has had a similar program since 2004; some state legislators want to end it, saying it benefits undocumented immigrants who should not receive the state’s support. Illinois officials say they won’t ask people about their legal status; they will ask only whether borrowers can pay their bills. (Los Angeles Times, 8/9/05, and NLIHC)
Out With the Projects, In With Big Money
Where huge public housing developments have been torn down in Chicago, private investors are now cashing in. A new report shows that areas within two blocks of these developments, once home mostly to poor, non-white residents, have seen a swift rise in real estate values and a notable demographic shift since 2000. Around Cabrini-Green, where demolition of public housing units is ongoing, half the population was black in 2000. Since then, nearly 80 percent of new homeowners in the area have been white. Over half of them have incomes over $100,000. While $6 million traded hands in housing sales in the neighborhood in 1995, in 2003 that number was $227 million. (www.chicagoreporter.com)
Colonias Win Mortgage Rights
Low-income homebuyers in Texas recently won significant protection against predatory contract-for-deed sales, which had become a major problem along the state’s Mexican border. A person who buys a home under a contract doesn’t receive the deed until the loan is paid off. In many cases, would-be homeowners were subject to excessive late fees or lost their right to buy altogether because of a late payment. Others were unaware of liens placed on the land they intended to own. The problem was acute in the colonias on the border, where developers often used contracts to make sales because they hoped to reclaim property quickly if buyers defaulted. Buyers now have the right to convert their interest in a property into a traditional mortgage and to obtain title from the person selling the home. (Texas Lawyer and NLIHC, 8/16/05 and 8/25/05)
Banking: Wal-Mart’s Next Domain?
Having devoured much of America’s retail sector, Wal-Mart now wants to move into banking. The chain applied to charter a bank in Utah to process its own customers’ check, debit and credit card transactions, rather than paying for an agency to provide the service. Since it says it wouldn’t be running a conventional bank, the store claims it would be exempt from the federal Community Reinvestment Act. Skeptics think Wal-Mart wants to compete with community-based banks and that its Utah application is just the first step toward that goal. The chain failed in earlier attempts to acquire banks in Oklahoma and California. (Montgomery Advertiser, 9/2/05)
CRA for California Insurers
Insurance companies make money in poor neighborhoods just like banks do, so they should also give something back. That’s the opinion of a California legislator who wants to set up a CRA-like investment test for insurers. The state currently has a voluntary program through which companies can invest, but insurers have only set aside $1.7 billion since 1997. The majority of this money has been invested in stocks and bonds rather than community development. Insurers take in over $100 billion in premiums from California residents annually. (Community Reinvestment News, Summer 2005)
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