Lending to illegals? Giving home loans to those seeking a better life is the right thing to do.

This week Loyola Marymount University and colleagues from Occidental College, California State University, Northridge, USC and UCLA, with the assistance of the United Way, will release an update of the 2003 Latino Scorecard. We collectively examined housing, health, education, economic development and public safety for Latinos in Los Angeles County. The numbers were not encouraging, especially in the area of housing.

While the Latino population makes up 47 percent of the total population in L.A. County, they represented barely 25 percent of the total number of new home loans in 2004. Those approved for new loans are far more likely to receive sub-prime interest rates than their white counterparts. The average Latino household spends over 50 percent of its income on housing. While housing prices rose by 16 percent in 2005, incomes grew a meager 2.3 percent. These indicators do not paint an optimistic picture for Latino housing prospects in L.A.

In response to these numbers, we proposed a road to action to improve the lives of all residents of the county. Our recommendations were not only for government action, but for the private sector to introduce innovative solutions as well.

Fortunately, there are institutions that are pursuing action to improve the lives of the fastest-growing group in the county. Wells Fargo & Co. has proposed to provide home loans to individuals without conventional documents.

As the Latino Scorecard indicates, housing continues to receive a low grade as a quality of life indicator. This is the case for Latinos, non-Latinos, those with documents and those without. While every Angeleno knows the difficulty of entering the housing market, the degree of difficulty is much greater for those without documents. Wells Fargo addresses this challenge head on.

Home loans

As reported in the Los Angeles Business Journal last week, Wells Fargo will begin accepting the Individual Taxpayer Identification Number for proof of income on home loans. The ITIN is issued by the IRS for individuals wishing to pay taxes but not having a Social Security number.

Wells Fargo understands that individuals who go out of their way to pay taxes and document their labor are a solid credit risk. These individuals, that some have labeled lawbreakers for life because they chose to improve the lot of their families by crossing the border without documents, are also the ones investing in some of the most challenging neighborhoods of Los Angeles. While these individuals may have violated the letter of the law when they crossed the border, they have contributed to the spirit of America with their economic success. This economic success can now turn their dream of homeownership into a reality with the help of innovative programs provided by Wells Fargo.

We have long understood that investment in homeownership leads to investment in the political, educational, social and civic life of a neighborhood. The Wells Fargo program is not only enabling individuals to save, grow and prosper, but also helping to build neighborhoods one home at a time.

All the United Way indicators show a deteriorating housing situation in Los Angeles County. Two-thirds of the community leaders surveyed for the study indicated that housing conditions for Latinos have declined over the past two years. This is occurring as national homeownership rates have climbed to 69 percent.

Optimistic view

Despite the dire nature of these numbers, we have found tremendous optimism in the Latino community of Los Angeles. Drawing from several surveys conducted at Loyola Marymount over the last several years, we find that Latinos understand that life is challenging, they also know that for many, life is better than ever before. More importantly, Latinos strongly believe that the quality of life in Los Angeles will improve in the future.

Combine this optimism with innovative programs and the future looks bright for Los Angeles. Still, there are many who are no longer optimistic because the future does not look like them. They set out to punish a Latino population that has made an effort to contribute to our communities by working jobs that others will not accept, earning lower wages, and living a life labeled "illegal" by the media. These people criticize a Latino community that has responded to hostile conditions by finding legal means for paying taxes and looking for safe institutions for the deposit of their wages so that they may save the money necessary to purchase their version of the American dream. Wells Fargo is to be commended for ignoring those who wish to halt the pace of progress, and for introducing a program that provides undocumented residents the opportunity to contribute to Los Angeles' revitalization by joining the ranks of homeowners and civic participants.

Fernando Guerra is director of the Center for the Studies of Los Angeles at Loyola Marymount University.

TWO VIEWS

The Business Journal reported last week that Wells Fargo has launched a program marketing home loans to people without Social Security numbers, and those otherwise lacking documentation--including illegal immigrants. These commentaries were written in response to that article.