Immigrants are leading the pack in housing foreclosures

Immigrants are the first victims of a wave of home foreclosures underway nationally. Aracely Panameno, director of Latino affairs for the Center for Responsible Lending said that nationally 375,000 high-interest-rate loans were made to Hispanics in 2005, and nearly 73,000 of them are likely to go into foreclosure.

Over the next six years, about 1.1 million homes in the United States are expected to go into foreclosure. Immigrants are among the first facing foreclosure because their incomes tend to be lower and many have lost construction jobs.

Many people managed to buy homes early in this decade by turning to unusual new mortgages which are only now receiving scrutiny from regulators and legislators. Many start with attractive low 'teaser' rates but feature payments that can suddenly increase.

Some lenders allowed people to take out loans without verifying income, ability to repay, or whether the immigrants were in the U.S. legally. The lenders found alternate sources of financing for these loans by turning to investors who bought the loans as packaged securities. The loans were not supervised in the same ways as loans made by banks and held in their portfolios. Nevertheless, many immigrants initially welcomed the lending changes as the only way they could afford to buy.