How Badly Will Arizona's Immigration Law Affect Its Mortgage Industry

Even though we are still reeling from the effects of the real estate meltdown, the one bit of positive news that is somehow keeping us hoping for the good times is the news that foriegn buyers have been coming back to the U.S and buying properties again. This is the news coming from the National Association of Realtors who are accounting for 15% of their sales that are from foriegn buyers who are either looking for vacation homes or who have moved into the United States to start a new life. There is one place in the United States, however, who will not necessarily enjoy this upsurgence. This is the Desert state of Arizona.

In the past three months, Realtors, mortgage firms and even events coordinators has seen a dramatic decrease in their business and profits in the area. Arizona, which is already suffering from the effects of the real estate bubble, is also seeing an increase in foreclosures and abandoned houses as a huge number of immigrants and other people have begun fleeing the state.

SB 1070 or the Arizona Immigration Law was designed with the aim of protecting Arizona and hopefully, the whole country from crimes that are steming from the influx of illegal immigrants from the border to Mexico, in particular from the city of Juarez which is considered to be the hub of narcotic activity in Mexico. The idea is to give the police the power to question people who may be considered as an illegal immigrant, particularly in the streets.

The plan alarmed many who compared the policy to that of Apartheid Africa. And a lot of people are leaving and avoiding Arizona to avoid the treatment. A group of Hotels and events coordinators in Arizona had already reported that out of the 100 events that were scheduled in the various areas of Arizona, 85 had already cancelled in light of the enforcement of the law this July. Condominium units have also been vacanted at a really fast rate and owners are now having a difficult time looking for tenants to fill up the vacant units. Before the law came about, a huge number of dwellers in apartments and condominium units in Arizona were actually undocumented workers and their families and the owners of the units did not actually require any identification from the tenants before they were allowed to move in.

The possible enforcement of the law also exposed that lending companies and mortgage firms do entertain undocumented individuals and are providing them with loans. An unnamed senior loan officer from one of Arizona's largest mortgage firms actually admitted that before SB 1070 a lot of their potential clients are people of questionable citizenship, Most don't even know how to speak English, but the firms did provide them with loans and did not even require that the individuals have work permits. " The law is opening a lot of cans of worms" an unnamed realtor commented " Before, no one really cared if their clients are here legally, as long as they have the money to pay, companies readily accepted them"

But SB 1070 is causing another problem for realtors who are trying to market homes in Arizona. The murder of rancher Robert Krentz in March had actually painted Arizona as a seemingly dangerous place, with news of the drug cartel crossing the border to deliver narcotics to the United States and desperate migrants who will kill if they are not allowed thru is keeping people from Arizona and the image of the legal residents themselves who are now taking up arms to protect their properties are frightening legal citizens from moving into the state, especially those of Hispanic origins who feared that they might be targeted because of their ethnicity.

But as unsavory as the potential effect of this law might bring, other states like Nevada and Texas are actually considering adopting the same law with regards to the control of illegal immigrants, both of whom have issues with the Narcotic trade with Mexico and both have actually been badly affected by the Real Estate crisis