Twice in as many days we have been asked about either originating loans to someone with only an SSN (no green card or visa) - or purchasing investments under a new 'ITIN' program. I am not comfortable with this, but wondered if anyone could enlighten me on the borrowers for these mortgage loans. There was a Youtube video about the program (sent to me by our CRA Officer) and the word 'undocumented' was in the narrative.

Since this is new to me any information would be appreciated.

I have no idea about the program. But an undocumented alien would normally not be eligible to receive a SSN. A ITIN sure, but not a SSN. They would have had to at least at one time or another been legally in the country and have been eligible to work under an appropriate work Visa.

Thanks Randy - every little bit of information helps.

I'm not sure about an "ITIN Program" but an ITIN is strong identification number IMO. We have lent to borrowers with ITINs (Assuming general creditworthiness).

There is nothing wrong with lending to people with ITINs. However, I have seen a number of banks get into deep fair lending trouble with "special programs" geared to people with ITINs. It cost them dearly in legal fees, research and administrative expense digging themselves out of the hole. Some successfully and some not so much. Trust me, I have worked with a lot of banks in Texas.

If you have a special program for people with ITINs, likely they are some sort of protected class. So, saying you will make loans under this "special program" and then have totally different criteria for people with and without an ITIN gets into some really hard to justify disparate impact issues.

I suggest that you tread lightly and make sure you go into such a program with your eyes wide open. If you are lending to people with ITINs because you know or at least suspect they are undocumented, then you also need to consider the ramifications of foreclosure, if your borrowers are subsequently deported and quit paying on the loan.

It can be done, but do it carefully if you are considering a "special program".