New Credit Checking Methods To Allow Illegal Immigrants To Boost Housing Economy

(The housing boom has been long gone for just about a year now.)

As home owners and potential sellers are still struggling to adjust to declining values and appreciation, the housing boom may be able to make a coming due too new mortgage underwriting standards.

Credit scores are obviously a major part of approval on a mortgage. In order to have your credit report scored, you need to have certain documentation. There are new methods of evaluating a credit report that could ultimately be beneficial to the housing market.

The article, “Credit score changes could spark housing boom” formulated by the Associated Press and published November 3, 2006 on msnbc.msn.com, explains how the new calculating methods will bring in a whole new supportive demographic to the real estate industry.

The new credit scoring methods could potentially bring upwards of $200 billion extra to the United States real estate market.

“Creditors like Citigroup Inc.’s Citibank see recent immigrants as a growing market niche, but those who lack Social Security numbers or legal status in the United States often are rejected by the three major credit bureaus.”

“A handful of new credit reporting systems — already used by 200 real estate brokers, community groups and mortgage counselors nationwide — allows lenders to calculate risk by evaluating a prospective client’s utility bills, rent checks and other payments.”

If these new scoring standards gain approval on Wall Street and major real estate companies, areas such as Central California will have the most to gain.

California also just happens to be the state with the most significant price and sales decline since the end of the great boom, which lasted from 2000 to 2005.

“‘Gateway states like California and Texas will disproportionately benefit from the housing boom because so many of their residents are immigrants,’ said Gary Acosta, the association’s co-founder, speaking from the group’s annual convention in Las Vegas.”

Acosta continued to add that an increase or “boost” in home ownership among the Hispanic population will greatly contribute to the overall fabric of U.S. society and economy.

“A study by the Joint Center for Housing Studies at Harvard University shows Latinos will account for nearly one-third of the home-buying pool by 2010. That same year, the disposable income of Hispanics will exceed $1.08 trillion, or 9.2 percent of total purchasing power nationwide, according to the Selig Center for Economic Growth at the University of Georgia.”

There is inherently no law in the U.S. that stipulates a home buyer be a legal citizen. But getting this demographic to start buying property will not happen overnight.

“Community groups from California to Atlanta have begun offering financial education classes in Spanish as the number of mortgage products available to immigrants and underserved populations have grown.”

Once an immigrant applicant expresses interest to purchase property, the most common and successful way of evaluating their personal credit is through their utility and telephone bill.

Since these tend to be the highest monthly bills other than rent, timely payments are a good indicator that the applicant is buyer-worthy.

The U.S. housing market could use a good boost to calm the fears and anxiety of sellers, investors and home owners throughout the country.

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