Immigrants hit hard by slowdown, subprime crisis
Updated: 2008-01-31 09:20
WASHINGTON -- As an economic slowdown and the subprime mortgage crisis deepen across the United States, Hispanic immigrants are increasingly in danger of losing their jobs and their homes.
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Both legal and illegal immigrants joined Americans in buying homes they could barely afford when the market spiraled upward and many have been caught with mortgages higher than the value of their homes as prices have slumped in the past year.
Just as subprime mortgage payments rose and house prices fell, the economy's slowdown has hurt the construction sector, which employs large numbers of Hispanics and other immigrants.
Unemployment among Hispanics in the United States jumped to 6.3 percent in December, up from 5.7 percent the previous month and well above the national average of 5 percent, US Department of Labor statistics show.
And almost half of the mortgage loans in the hands of Hispanics are subprime, making them especially vulnerable to the housing downturn.
"Economic conditions are deteriorating and many immigrants now can't work those extra hours or find that second job to keep up with their mortgage payments," said Aracely Panameno at the Center for Responsive Lending (CRL) research policy group.
Nelson, a 29-year-old legal immigrant and construction worker from El Salvador, had a miserable run of luck in November, when he lost his job and his subprime mortgage bills jumped $650 to about $2,650.
He says he now has to sell the home he bought in Maryland in 2005. If he is unable to sell in the next four months, he will have to foreclose, meaning an even bigger financial loss and a damaging black mark on his credit record.
Like many caught up in the crisis, the father of three said he had no idea his monthly payments would soar two years into the mortgage when he closed the adjustable-rate subprime deal.
"You have to sign a lot of things when you buy a house, so I didn't read, I just signed. I think it was the anxiety, the happiness of buying my house," he said. "I feel a bit betrayed."
RECESSION FEARS
US President George W. Bush and Congressional leaders are working on an economic stimulus package worth almost $150 billion to fend off a possible recession, and Bush last month unveiled a plan to slow the wave of home loan foreclosures by freezing the rates on some subprime loans.
But experts say most of the immigrants in financial trouble are either not entitled to help under the rescue plan or are not taking advantage of it.
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