The bailout

So President Bush has announced his bailout of the mortgage industry, declaring that subprime rates are frozen for five years. It won’t help everyone but it will help some. I heard the commentators on the radio during the ride home last night.

One of them explained that the government has been in the middle of mortgages for decades. Lenders get in big trouble when someone doesn’t qualify. And judges are more than willing to rule against any lender who might have turned someone down due to race or neighborhood. It is vanquishing the little guy against the big bad banker. It plays well in court.

And we really don’t have any laws about lending to people who are here illegally. Why, Illinois has a special subsidized loan program specifically for ITIN clients; that is people who do not have social security numbers. And the state knows full well that most of these borrowers are illegal aliens.

So, lenders got lax. It’s easier to say “yes” than “no”, especially if HUD is watching. In my opinion they’ve gone way overboard and the majority of the problem rests with the lenders. It is ridiculous to loan money to someone based on future income and future home value.

And when two or three families have to be included as buyers just to qualify, all sorts of bells should go off. You’ve got lenders and realtors and lawyers all in on the deals and no one could see past the commission check. I really don’t feel like using my tax dollars to help them out, do you? (I can see Dana at the White House, opening up Tony Snow’s Word documents, pressing Ctrl-F, and replacing the word “amnesty” with “bailout”…as in, “People keep calling this a bailout. It is not a bailout.”

One fellow here in Elgin was what you would call a “Full Service” lender. Luis Uribe worked for a mortgage company that I won’t name (you could look it up) and he really took care of his clients. “Uribe would manufacture I.D.s, job references and places of employment for people, some illegal immigrants, Roscher said, who couldn't qualify for a home loan with their true credit history.” (Courier News)

And when he had someone’s good numbers he would milk them for all they were worth. He would harvest their ID from legitimate mortgages, then turn around and use the papers over and over and over. And you wouldn’t even know it unless the thieves got behind in their payments.

One lady owned four houses according to her credit history and didn’t even know it. Another couple owned four extra houses as well.

Good ol’ Luis wasn’t just doing this out of the goodness of his heart. He was charging these undocumented buyers “anywhere from $1,000 to $14,000" for these papers. Well, Mr. Uribe is in custody, he entered a guilty plea, and he is awaiting sentencing. I certainly hope the case doesn’t end there. These buyers were deeply involved in the scam as well. Surely they will be prosecuted. Or will they?