Tag Archives: home loans

Cross The Border And Get A Free House

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On Saturday, The National Review posted an article about a bill recently passed by the California legislature that would allow illegal immigrants to receive up to $150,000 in taxpayer-backed home loans. As of the time I am writing this, Governor Newsom has not yet signed the legislation.

The article reports:

“I didn’t know it was possible to make a border crisis and the housing crisis worse with just one vote, but Democrats found a way,” California Assembly Republican leader James Gallagher said on X on Thursday.

Republican assemblyman Bill Essayli called the bill “offensive,” writing on X that “California democrats love illegal immigration so much they offer many incentives for them to come here.”

But it’s unclear that Governor Gavin Newsom will sign the legislation, which could provide ammunition to Republican presidential nominee Donald Trump, a border hawk who has consistently blamed Democrats — including Vice President Kamala Harris, a California native — for the border crisis.

And even if Newsom does sign the legislation, it’s unlikely that any illegal immigrants will receive money from the program anytime soon: the program is broke, and lawmakers haven’t approved new funding.

Democrats, who have a supermajority in the California legislature, passed Assembly Bill 1840 on Wednesday. The aim of the legislation is to prohibit discrimination for the California Dream For All home loan program on the basis of immigration status, according to a bill analysis.

The program offers prospective first-time homebuyers loans of up to $150,000 for down payments or closing costs. At least one borrower must be a first-generation homebuyer. Eligible prospective homebuyers are selected for vouchers via a random lottery.

The obvious question is, “What kind of a house can you buy in California for $150,000? Can you even buy a garage in California for that? What about all of the veterans living on the streets in California? Is anyone going to offer them free housing?

Been There, Done That, Can’t Afford The T-Shirt

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Yesterday Investor’s Business Daily posted an article about a possible prelude to another mortgage crisis.

The article reports:

In an orchestrated assault on the credit standards underpinning mortgages, no fewer than four Obama agencies have gone to war against FICO. If politicians don’t want another bank crisis, they’ll stop the attack.

Home loan approvals hinge on FICO credit scores. But the Obama regime views FICO scoring as too strict, cutting off millions of low-income minorities and immigrants from mortgages. So it’s pressuring Fannie and Freddie, which control 90% of the mortgage market and set the underwriting standards for the entire mortgage industry, to abandon FICO for a softer standard in evaluating credit risk.

We  have been down this road before. It is unwise to lend money to people who are probably not able to pay it back.

The article further reports:

FHFA chief Mel Watt, the former Democrat congressman who before the crisis demanded Fannie and Freddie back loans for welfare recipients in his district, has instructed Fannie and Freddie, the failed mortgage giants now under his control, to come up with “alternative credit scoring models.” They’re expected to make the transition sometime this quarter.

The hope is that the new scoring regime will inflate scores by as much as 100 basis points, thereby qualifying millions of low-income African-Americans with subprime credit and Hispanic immigrants with thin credit for prime home loans.

This is coming at a time when Fannie is launching a subprime mortgage product called HomeReady that caters to immigrants with weak credit and limited income. The new loan lets borrowers for the first time bundle income from roommates and relatives to meet qualifications for income. They have to put only 3% down and can use gifts from nonprofit groups to subsidize their down payments.

Before the crisis, your income had to be your own.

Now, as a renter, you can get a conventional home loan backed by Fannie by claiming others’ income.

You don’t have to bring much financial wherewithal to the table. You can even live in government-subsidized housing. Just as long as you round up enough income earners and pool finances to help meet a minimum debt-to-income ratio of 45%-50%.

Could we please elect people who have the intelligence to learn from their previous mistakes?