We unfortunately have a lot of nervous potential homebuyers on the sidelines because of what is currently taking place on the immigration front – with respect to deportations in particular.
Hence, I am reminding blog readers that mortgage banks NEVER report anyone to any agency ever…unless they see blatant and obvious fraud.
If mortgage banks see fake or fraudulent income documents (paystubs, W2s, or tax returns), identifications, or Social Security numbers, they will file a report with FinCEN, the Financial Crimes Enforcement Network.
FinCEN is a bureau of the U.S. Department of the Treasury that does work with various federal law enforcement agencies like the FBI and ICE (Immigration and Customs Enforcement).
But as long as there are no fraudulent documents in a loan file, there is zero risk to borrowers applying for a loan.
So yes, non-citizen borrowers with only ITINs (Individual Taxpayer Identification Numbers) and no Social Security numbers can apply for loans without any worries, as long as all of the documentation they provide is legitimate.
To reiterate – mortgage banks will never contact ICE if they think a borrower might be in the U.S. without proper documentation – unless they see fraudulent or fake documents.
I might add here too that fraudulent document concerns are the same for any borrower – not just immigrants. Fraudulent documentation will be reported, irrespective of citizenship concerns.
Gift Letters Too – No IRS Reporting!
This blog topic is also a great opportunity to remind readers that lenders never report to the IRS either.
This concern often surfaces when we request “gift letters” from parents or relatives who are gifting substantial sums to their kids to help them buy a home.
Donors often are concerned that we will report them to the IRS or that the IRS will see the loan file somehow when their gifts exceed the maximum allowable, non-taxable amount per the IRS (currently $18,000).
Donors never need to be concerned, however, as the IRS has no access to loan files and mortgage banks never report gifts to the IRS – no matter how large a gift might be.
SIDEBAR: Please note above that I only refer to “mortgage banks” and not to commercial banks – like Citi, Wells Fargo, B of A, U.S. Bank, etc. They are under more regulatory scrutiny and have different reporting requirements, so I cannot speak to them.
