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Orginally posted by pratickm

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Orginally posted by naudurivsm
So with the second scenario of "getting back the loan amount" in mind ,
Is it not the duty / responsibility of the Bank/lender to amke sure that a prospective loanee is in a stable position/situation in the country ( in terms of Job, personal financing and even residency apart from other things like credit worthiness /history) ?

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The bank can always take the property back - since it belongs to them until the loan is paid off fully and re-sell it to recover it's principal amount.
The person leaving the country isn't going to take the house alongwith him - so what's the issue here then?

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Pratickm,

Your point is right banks can get back money? the question is following a Fed/ govt regulation;

But why some banks are insisting ( I already heard in few cases) is post 9/11 period and the introduction of Patriot Act,where in there are clauses and makes it a legal obligation for most of the businesses /Fed agencies or departments to check in for the residency aspects as well.

And in that effort the lending Industry was somehow spared.

read this lines from that article
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"Current law does not require lenders to determine citizenship before providing financing for a home loan,"

"Though it may not currently be legally mandated that a mortgagee must determine a loan applicant's citizenship status before providing financing, a loan broker said it is accepted practice to do so."

Mitch Grashin, a California loan broker with 20 years' experience, said, "When you fill out an application for a mortgage loan, you have to state whether you are a citizen. The loan application asks, 'Are you a U.S. citizen? Yes or No.'"

According to Grashin, in practical terms, Dix's bill may not be necessary.

If an applicant for a mortgage loan is not a citizen, he said, "in about 90 percent of the loan programs out there, you have to have a green card to purchase a house, and usually it has to have more than a year left before it expires."
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So Now these guys want this in practice as well.

Looks at another examples;
The credit Card aggreements in most cases state that one must be a ctiizen/ or lawful permanent resident of the country in order to be eligible for credit." But hardly this is followed.

In case of driver's licenses they have already tighetened the rope, with all visa holders getting licenses valid only upto the "visa validity date" and that too with all sorts of documentation ( like letters from employers etc) besides the visas verification.
Earlier (pre 9/11 and Patroit Act ) one used to get a license for period of 4 years.

so, here comes this kind of biased proposals to check for residency status beofre lending.

These are actually bias in lot of terms since most of the legal Aliens are going to be affected if at all this becomes law.

But for all theoritical purposes the question are you a US citizen ? Yes / No is laready there in the application forms.
Never followed though..

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Orginally posted by naudurivsm
These are actually bias in lot of terms since most of the legal Aliens are going to be affected if at all this becomes law.

But for all theoritical purposes the question are you a US citizen ? Yes / No is laready there in the application forms.
Never followed though..

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The question may be there - but there is no law that prevents the bank/lender from extending a loan to this person.
This proposed law intends to do that - i.e. prevent the lending institutions from extending mortgage loans to non-citizens or non-GC holders, not just illegal alients.

I have so many friends in the US who bought homes well before their GC applications got approved.

This law is simply trying to mess up future financial planning for most people who intend to stay in the US and get GCs.

It is one thing to pass a law requiring all businesses to verify the residency/immigration status of anyone they do business with, and it is quite another thing to prevent them from doing business at all based on that.