“I think everyone is waiting for someone else to make the first move,” Smith told Mortgage Professional America. “Without getting into a political discussion, the current presidential administration has made it clear that things like deportation are back on the table, much stronger than they used to be.”
The Trump administration has won some recent court battles in the effort to use the Alien Enemies Act for deportations. The most recent court hearing requires deportation targets to receive 21 days’ notice and an opportunity to challenge the deportation in court.
Non-permanent residents will be excluded from obtaining FHA loans starting May 25, despite pleas from the National Association of Mortgage Brokers (NAMB), which has asked the administration to reconsider this action, fearing it may harm housing activity.
Lenders face risk of having customers deported
The risk for lenders is potentially doing a mortgage loan for someone who might not be allowed to remain in the country for the life of the loan.
“Lenders run the risk that they write a loan to somebody that theoretically could be deported two months later,” Smith said. “I think some lenders may be tightening the credit box, and others are getting nervous, but they’re holding steady. Right now, our ITIN program is still here and it’s still thriving.”