The Mortgage Monsters Meet The Immigration Invasion. They Like Each Other.
George W. Bush
boasted in his radio address last weekend
about how his Administration is boosting
homeownership among what he called
“minorities.” He even concluded with a
heart-warming account of his meeting with an
mom,” who gratefully told him the
fact that she and her “girls” could afford a
home, with the help of a federal homeownership program,
was “a miracle.”
It`s not a miracle, of course. It`s just a
massive subsidy from the American taxpayer—through
Government-Sponsored Entities (GSEs in Washington
possible instability, as a matter of fact, is
in financial circles. And it`s a subsidy that, to a
remarkably unreported degree, goes to immigrants.
government-sponsored entities are the Federal National
Mortgage Association (Fannie
Mae) and the Federal Home Loan Mortgage Corporation
Mac). Together with another GSE, the Federal Home
Loan Banks (FHLBs), they directly or indirectly stand
behind $4 trillion in mortgages—three-quarters of the
single-family mortgages in the U.S.
Federal Reserve Chairman Alan Greenspan recently
acknowledged Wall Street`s concern about Fannie Mae and
Freddie Mac. He admitted that these institutions,
operating under an "opaque and circuitous GSE
paradigm," are expanding because of an "implicit
subsidy" at a "pace beyond that consistent with
systematic safety.” As Greenspan reminded his
"A market system relies
on the vigilance of lenders and investors in market
transactions to assure themselves of their
counterparties` strength. However, many counterparties
in GSE transactions, when assessing their risk, clearly
rely instead on the GSE`s perceived special relationship
to the government."
Investors, said Greenspan, assume that in the
"event of a
crisis involving Fannie and Freddie, policymakers
would have little alternative than to have the taxpayers
explicitly stand behind the GSE debt."
This implicit socialization of risk leads to investors`
taking on more risk than is healthy.
so often happens in cases like these, Greenspan said
frankly, "a substantial portion of GSE`s implicit
subsidy accrues to GSE shareholders in the form of
increased dividends and stock market value." [MSNBC
Greenspan: Mortgage giants must tighten debt, Feb
cited a study by a Federal Reserve economist, Wayne
Passmore, that showing the subsidy may account for
"more than half of the stock market capitalization of
these institutions.” [The
GSE Implicit Subsidy and Value of Government Ambiguity]
other words, federal policy has created a massive
financial distortion—and an interest group, Fannie and
Freddie`s shareholders and employees, are in favor of that
What Peter Brimelow has
called the Mortgage Monsters have become financial
the Mortgage Monsters are allying with another interest
group: the immigrant lobby. Immigration is one of the
main engines of growth for the giant mortgage lending
institutions. And few companies have more openly tied
their fortunes to immigration than Fannie Mae and
fact, Fannie hawks its shares by promising potential
investors that there will be
"30 million more Americans by 2010…." Fannie
bubbles over with enthusiastic cheerleading for
immigration, noting "[M]inorities will grow
evermore important to housing markets over the next 10
years, accounting for an estimated two-thirds of net new
households." Since three-quarters of the U.S.
population is white, but nine-tenths of current immigration
and virtually all population growth minority, Fannie is
clearly enthusing about administering a subsidy from
Americans to immigrants.
Fannie Mae is a major corporate supporter of mass
immigration. It has
conferences for non-governmental organizations
[NGOs] and lawyers
dedicated to increasing
immigration and increasing hand-outs for immigrants.
other words, the government-sponsored entity (GSE) works
with government dependent NGOs to …well, sell more
product—subsidized by the taxpayer.
Mortgage Monster "production goals," federal law
The Community Reinvestment Act and other government
regulations, mandate lending to "traditionally
underserved markets.” A newly-arrived immigrant,
illegally, does not come to mind as the first
example of "traditionally underserved" and in need of
remedial lending. But here it is from the same Fannie
Mae Foundation Report:
required under the Community Reinvestment Act to provide
services to underserved communities perform well in
regulatory evaluations when they can show that they are
serving the immigrant populations in their communities.
For these reasons, CEOs and other senior financial
institution officers see immigrants as a highly
desirable customer base well worth cultivating."
Fannie also drools over “public and private
partnerships [which] enable the layering of public
subsidies with private financing to make homeownership
more affordable to people with very low incomes.”
32, Reaching the Immigrant Market]
financing package for the newly-arrived home buyers
"A large soft second mortgage with minimal repayment
requirements funded by a Miami-Dade County surtax
program or the federal government (HUD`s HOME and
Community Development Block Grant programs or other
federal programs)" and "a modest-sized, soft third
mortgage funded by a grant from the Federal Home Loan
Bank`s Affordable Housing Program."
26, Reaching the Immigrant Market, Fannie Mae Foundation).
that is only the beginning: "considerably more
attention needs to be paid to retaining homeowners"
and "home-improvement lending" according to
another Fannie report.
New Mortgage Markets:
this report concedes "The tremendous effort and
subsidy that is necessary to make new markets work is
hard to sustain, especially for long periods and at high
Making New Mortgage Markets)
fixated on immigrant customers are the Mortgage Monsters
that, when counting income and assessing
credit-worthiness of a borrower, "primary income may
be supplemented by income from family members who are
on disability or work off the books." Also,
"certain nonpermanent immigrants," even borrowers
presenting more than one social security number, are
eligible for home mortgages according to the Fannie
report. "Many times the borrower would have more than
social security number" gushes a Fannie-backed
banker in a Fannie Mae Foundation report.
the Immigrant Market,
From Fannie`s perspective, an immigrant borrower
collecting disability under one social security number
and an old-age SSI check under a second social security
number while working
"off the books" is a better credit risk and
shows more promise than the
poor American sucker who is content merely to work
for his daily bread.
Similarly, Fannie Mae believes bankers must learn to
look differently at job history. Multiple changes in
employment, quitting one employer to "go home, then
come back and sign on with another employer," or the
"annual customary 3-month
return to Mexico at Christmas time" do not
constitute a credit risk [p 54] according to Fannie Mae
of course these peccadilloes may well not be a credit
risk to Fannie`s stockholders—as much as it is to the
It`s not just Mortgage Monster employees and
stockholders who benefit from this racket. So do a whole
range of private business interests.
Thus the work force of North Arkansas Poultry, a
Tyson Food subcontractor, is
95% immigrant. Between 1990 and 1993 the plant was
experiencing an employee turnover rate that hovered
around 200% i.e. the average worker only stayed for 6
the Tyson subcontractor knew where to go for help!
With the Fannie-backed
First National Bank and Trust of Rogers it developed
a program to facilitate home ownership among its work
force. This program
reportedly brought the turnover rate down to 15 to 20%,
boosting profits for the chicken processor…at taxpayer
Fannie reports are filled with
happy stories of government-dependent CBOs or
organizations such as
La Raza and
Chicanos Por La Causa partnering with Fannnie Mae,
private lenders and factory chicken processors to make
money for the private sector participants and keep the
ethnic lobbies employed.
Thus the welfare state and private capital are melding
in ways that only the national socialists could have
imagined. Immigration is a key ingredient in the rise of
statist regime—characterized by institutions like
the clay-footed giants Fannie and Freddie.
him) is a recovering refugee worker