What is an ITIN loan?

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Mortgage and Lending with iBrandPlan.com - Grow your e-Profile & Brand

In the aftermath of 9/11, Congress passed the Patriot Act which changed a lot of little things in a multitude of areas. One significant impact was the merging of databases between the IRS and the Social Security Administration. The result of that merge was an identification of the vast number of illegal immigrants in this country and a better insight into their financial situation.

Prior to the merger, an illegal immigrant would pay for a fake social security card or borrow someone else they knew in order to get employment. If the employer deemed the information to be valid, they put that person on the payroll. Each pay period, the employee has social security withholding taken out of their check and the employer pays the required matching funds. This money was sent to the social security administration who kept a database of money paid into them and by whom.

irsTaxes were also taken out of those checks and paid by the employer to the IRS.  The result of the merge was that the IRS found out how many people had been paying taxes using social security numbers that didn't exist. From that pool of people they could further deduce who were homeowners, but the mortgage company reporting interest paid for that same person.

The IRS didn't want to tell tens of thousands of tax payers to stop paying because of their use of an invalid social security number so they sent a notice to employers requesting their employees with invalid social security numbers fill out an application for an Individual Tax Identification Number (ITIN).  This way people who had been using invalid social security numbers to work in the US could continue working under a valid ITIN number.

Another off-shoot of this discovery was that the IRS sent notices out to mortgage loan servicers telling them which borrowers they have were using invalid social security numbers and requesting them to get with their clients to get the ITIN number so that the mortgage interest statements sent to homeowners and the IRS were done under a valid ITIN number. Now mortgage servicers could see how many clients they had who were potentially illegal immigrants and better understand the types of homes they owned, where they lived, what they earned, etc. This information continues to be analyzed today.

Banco Popular is a bank based in San Juan, Puerto Rico who has made mortgage loans to people based on their having ITIN numbers and not valid social security numbers. Banco is by far the largest lender in this segment. While often criticized as supplying home ownership opportunities to people illegally in the United States, mortgage brokers and lenders claim that there is no law against lending to people of foreign citizenship.  There are no laws forbidding foreign ownership of property in the United States and thus, Banco Popular through their wholesale mortgage division has expanded their loan portfolio.

Applicants have to show a 2 year history of employment and of filing a tax return to the IRS, but do not have to have established credit histories. Alternative payment history such as cancelled checks for apartment rents, utilities, etc. can be used in lieu of a credit report.

ITIN lending is primarily used in the Hispanic community and it's no secret that a majority of these home buyers are living and working in the United States illegally. Still, it remains a lawful activity to provide home loans to these applicants.

Added for clarification - I do not offer ITIN home loan programs and this article is not an endorsement of those programs, nor is it a solicitation for applicants.

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Show All Comments
Anonymous
Anonymous
Charlene
Does anyone do these loans in NJ?  My buyer has an ITIN and they are from the UK.
May 09, 2008 02:56 AM #15
Rainer
16,413
Jose Delgado
Opes Advisors, INC. - Eugene, OR

Ken,

Very good post about ITIN Mortgages. I am fairly new to the mortgage industry (started when the cookie crumbled... in July) I originate loans in Oregon and i live in Eugene, Oregon. The bank that i originate for is a very conservative bank and i am researching more about ITIN mortgages to see if i can convince the bank to get into this niche. Since I am a Mexican/American (just became a citizen last November) I am trying to reach out to the Hispanic community to help them in any way that i can in buying a home and have found that the majority have no valid SSN and only have an ITIN. Very hard to turn them away after having built such a rapport with them!  

I came accross your blog when researching ITIN mortgages. I then read all your comments and tried looking up the Investors that you had in a  replied comment. My question (you're probably like "finally there is an end to this comment!) is there still a market for ITIN Mortgages through the  investors, and who are they?

Thanks,

Jose Delgado  

May 13, 2008 12:10 PM #16
Anonymous
Anonymous
Bucco

Yes, I am very interersted in the same thing,. from what I understand the only bank still doing  them is banco poplar they go to 90%

 

 

I'd love to know, I am a mortgage broker in wisconsin and think I could do a great service to many people with some more of these programs.

 

thanks

bucco

920 960 0555

May 14, 2008 04:01 PM #17
Rainer
14,787
LUIS SALGADO
BETTER HOMES AND GARDENS REAL ESTATE / GLOOR REALTY CO - Chicago, IL

In the Chicagoland area a bank that is still doing ITIN loans is Park National Bank. Just like any other bank, they have stricter rules for these type of loans.

May 28, 2008 10:53 PM #18
Anonymous
Anonymous
Daniel Ochoa

I also have been looking for a bank that can do these ITIN Loans in Florida and South Carolina.  Does anyone know if these Chicago and Texas based banks will work in these states, and if they have a wholesale division?  If you are a bank that does these loans please reply.  Thank you

Daniel Ochoa

321-299-7138

LDANIELOCHOA@HOTMAIL.COM

Jun 25, 2008 03:51 PM #19
Anonymous
Anonymous
Roger

HAVE CLIENTS    NEED LENDERS

I have several clients in California and I need ITIN lenders.  Please advise.

Roger

(909) 967-1735

Jul 02, 2008 02:34 PM #20
Anonymous
Anonymous
Lisa

I have family in Virginia who can benefit fro an Itin Loan.  Does anyone know who to contact in Virginia or if these other companies will do loans in Virginia??

Lisa

Aug 04, 2008 03:50 PM #21
Anonymous
Anonymous
Pedro Parada

Hello everyone,

I am a mortgage broker in the state of Iowa. I've been working with ITIN loans for the past 3 yrs. using Banco Popular from Houston TX as a lender. As of 8/15/2008 Banco Popular no longer offer wholesale lending to states other than TX. I have developed a good clietele based on ITIN loans within the last 3 yrs and I'm looking for a lender to do business with. Please if you know a Bank or someone that can help me find a lender please reply or send me an email to peparada@hotmail.com

Thanks guys!!!  

Aug 16, 2008 08:08 PM #22
Anonymous
Anonymous
Anonymous

Hi, Im looking for an ITIN lender in South Carolina Does somebody knows any one besides Banco Popular? 

Nidia

305-868-2700

nidiaborgee@bellsouth.net

Aug 22, 2008 05:09 PM #23
Anonymous
Anonymous
Arturo Zeda Koenig

The hopeful but false report that there is no law prohibiting mortgage loans to illegal aiens overlooks the fact that 8 USC 1324 makes it a (10 yr prison term) felony to encourage an illegal alien to reside or remain in the US.

But then who cares if no one is enforceiong the laws...right? This guy is very wrong.

Sep 24, 2008 10:23 PM #24
Anonymous
Anonymous
Antidiscrimination Brigade

If an illegal Alien resides, work or buy a home on this wonderfull country it is because they want to. it is not because you or anybody else encourage them or not. Besides after all you will need all those illegals inmigrants continue to paid those thousends of millions dollars in taxes & to the social security that they can not ever claim. The bail out the Wall Street and the retirement of the baby boomers need them.

Oct 04, 2008 07:02 PM #25
Anonymous
Anonymous
Marleny Garcia

Roger, (from California)

Did you find a lender yet??? I am into the market to refinance my property and I would like to do it with a local agent, let me know if you found a lender yet.

 

Marleny Garcia

Marleny@yahoo.com

 

Jan 29, 2009 11:35 AM #26
Anonymous
Anonymous
Marleny Garcia

To Roger from California my correct e-mail address is Marleny_Garcia@yahoo.com (sorry)

 

 

Thanks.

MG

Jan 29, 2009 11:37 AM #27
Anonymous
Anonymous
Gordo

Im Looking for an ITIN lender in Iowa, To buy home. Can put 30% down. Any around.

Jan 30, 2009 07:32 PM #28
Anonymous
Anonymous
Jose

Hi everyone!!!

I am in the market to refin my condo which I bought 15 years ago, I am located in CA, I have proof of income, bank statements and a great credit (around 740's).

 

If anyone knows anybody doing this kind of loans please contact me.

 

Thanks,

JCS

 

Mar 03, 2009 05:19 PM #30
Anonymous
Anonymous
Sherry

Hi i am looking a home loan for someone with a itin # in arkansas. Does anyone know someone in arkansas who loans to peeps with itin#????

 

please let me know asap! sherry827@att.blackberry.net

Mar 15, 2009 03:11 PM #31
Anonymous
Anonymous
Iliana

Hello I'm looking for a lender that will take ITIN number I live in San Fernando Valley, CA please let me know asap

liliana14400_v@yahoo.com

Than you very much

May 17, 2009 07:30 PM #32
Anonymous
Anonymous
selene mata

does any one know of a ITIN lender here in iowa.PLEASE.

Jul 15, 2009 03:35 AM #33
Anonymous
Anonymous
Josue

HERE TO EVERYONE OUT THERE IN SOUTHERN CALIFORNIA THERE IS A FEW LENDERS FOR ITIN NUMBERS TO FINANCE, BUT THERE IS ONE THAT IS REALY FUNDING THOSE LOANS, THEY TAKING A COUPLE MONTHS BUT THEY RELY FUNDED, IF YOU HAVE THIS TYPE OF LOANS SHOT ME AN EMAIL AND WILL TALK ABOUT IT. 

Jul 27, 2009 10:56 PM #34
Rainer
32,026
Ken Stampe
iBrandPlan.com - Grow your e-Profile & Brand - Dallas, TX
iBrandPlan

FYI - A community reminder that Solicitation for business is a frowned upon practice at Active Rain in the comments section of someone's blog other than your own. If you want to use this blog to advertise your services, I recommend using the "ReBlog" function.

I'm now closing comments to this article. Thanks for all who contributed.

Jul 28, 2009 07:35 AM #36
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Rainer
32,026

Ken Stampe

iBrandPlan
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