MARIO, A FILIPINO IMMIGRANT, bought his first house in Daly City California at $450,000. When his home increased in value three years ago, he was able to refinance his loan.

His mortgage on the house is now $750,000 and faces the prospect of an interest rate increase in the next few months that may result in a significant increase in the monthly mortgage payment.

He?s contemplating having his home foreclosed as its value is now below $750,000. Mario works for an insurance company, which is undergoing layoffs. He fears he might lose his job soon.

Affidavit of support

Besides his housing payment woes, Mario has to execute an affidavit of support for his children and grandchildren who are all arriving in the US as immigrants this year.

For the past few years, real estate values of homes in the US have increased tremendously. There were many financial institutions willing to extend credit to qualified homebuyers. Unfortunately, there were also loan brokers earning commissions for each home loan that they foreclosed for banks or lenders.

Fraudulent application

With so much easy credit available, there were homeowners who really could not afford a house but who qualified for home loans through fraudulent application. Many would-be homebuyers submitted fraudulent financial documents and tax returns just to be approved for home loans.

When a home is purchased, everyone, including the new owner, is happy. The new homeowner starts paying an affordable monthly mortgage on his house until the interest rates goes up hen the attractive low rates expire. Several homeowners find themselves unable to afford their monthly payments. When increased rates have kicked in, some have to contend with a $5,000/month increase from an initial teaser rate of $2,000/month.

Because of this increase in monthly payments, many homeowners cannot afford the new rates. Some have abandoned their homes, resulting in foreclosures. These cases have become very common and the value of the homes started going down as foreclosed properties increased the available supply of homes for re-sale.

Other buyers are staying out of the market hoping that the values would go down some more before they buy. The US Congress is already talking about an economic stimulus package which may or may not readily alleviate the crisis. All these, I must say, started in greed and illegitimate lending practices.

The real victims

Many first-time homebuyers are immigrants and many of those affected by the mortgage fiasco are Filipino. Some claim to be victims of misrepresentation by realtors, lenders or brokers. Others are just suffering from a natural effect of the falling real estate values.

As many homeowners lose their homes, there is a question of who will eventually be liable for all their financial miseries. The US may be on the brink of a recession, if not officially declared as yet, and the ripple effect will reach not only the new immigrants who are already in the US but also the intended immigrants still in the Philippines.

Family petitions are approved if the petitioner can prove financial ability to support the children who are migrating to the US. The petitioner must have sufficient income - say 125 percent above poverty line - to support petitioned children.

It is important for the petitioner to show other revenues or assets that may be added to his total income to exhibit financial ability to support dependents. If the petitioner is not financially able, another relative or close friend could be requested to be a co-sponsor for the affidavit of support.

Petitioning employers

Another way of obtaining immigrant visas is through petitions by employers. If the petitioning employer suffers from a financial crisis, the immigrant visa petition for the employee will not be approved. It is important for the employer to show financial ability to pay the employee being petitioned before a visa is actually issued. We have seen an increase of denied petitions because of the employer?s inability to show sufficient income to pay the petitioned employee.

When President Bush proposed the economic stimulus package, it was with the intention to make money available to consumers who will hopefully spend the money and stimulate economic activity. But times are very unpredictable. A number of Filipinos in the US are bracing themselves for hard times.

Many have cut down on their own expenses. But the Filipino petitioners always leave a budget for petitioning their relatives. To many a Filipino, reuniting with the family is still a first priority to owning a home.

(Tancinco may be reached at law@tancinco.com or at 02-887-7177)