On the October 9 edition of CNN's Lou Dobbs Tonight, San Diego radio host Roger Hedgecock claimed that "[w]e have a situation where today HUD [Department of Housing and Urban Development] was talking about 5 million illegal alien home mortgage loans that have gone bad." Radio host Joe Madison responded, “See ... this really angers me, because I'm sitting here ... and wondering, how is it that people who are illegal get loans when people in my community who are legal have a difficulty getting loans? And if they do get them, they're often from predators?” Hedgecock did not cite a source for the purported HUD statistic, and HUD has reportedly said that the statistic is false.

On October 9, the Drudge Report linked to an article on the Phoenix radio station KFYI website under the headline, “HUD: Five Million Fraudulent Mortgages Held by Illegals ...” However, according to an October 9 Phoenix Business Journal article posted at 3:16 pm MT (more than an hour before Lou Dobbs Tonight aired), HUD “says there is no basis to news reports that more than 5 million bad mortgages are held by illegal immigrants” and “a HUD spokesman said ... his agency has no data showing the number of illegal immigrants holding foreclosed or bad mortgages.”

KFYI stated in a subsequent article that “a person from Housing and Urban Development contacted KFYI to tell us the number was inaccurate, that there were only 2.3 million mortgages held by immigrants, so there was no way that 5 million illegals could have mortgages.” KFYI also reported that its source for the original story was an unnamed “retired agent from Immigration and Customs Enforcement [ICE].” KFYI reported that this source “stands by” the numbers in the original report. The original KFYI article did not mention any source for the statistic other than HUD.

From the October 9 edition of CNN's Lou Dobbs Tonight:

DOBBS: Mildred, you know, we've talked on this broadcast for some time -- since actually September 11 -- about shared sacrifice. It looks like we've arrived there. This isn't what any of us had in mind. What -- how are your listeners reacting?

MILDRED GADDIS (host of WCHB's Inside Detroit): Well, Lou, they're very frustrated. And here in Michigan, the world knows what's happening here and what has happened with unemployment. And they're concerned that people are unwilling to declare what really is existing in this country right now and admit the fact that we are in a recession.

But here's what they're saying. They believe that John McCain -- they tie him very closely to the Bush administration. So, they literally tuned out what he has to say about what's happening now and seem to be more willing, even if Barack Obama isn't on it, the perception in their minds seems to be he's closer to it than John McCain is.

DOBBS: Even after he said $300 billion in help for homeowners who are underwater?

GADDIS: Pardon me?

DOBBS: Even after John McCain stood up and said he wants to give $300 billion to homeowners facing foreclosure and whose homes are underwater?

GADDIS: Even after that because of their disdain for the Bush administration. And John McCain here in Michigan, as you know, has pulled out, and he has been unable to separate himself from George Bush.

DOBBS: All right. Roger Hedgecock out in San Diego, give us your perspective.

ROGER HEDGECOCK (KOGO radio host): Well, Lou, we're almost out here -- we're almost transcended this political partisanship and petty bickering. These economic problems have now gotten so much worse than the presidential campaign offers any solution to. We have a situation where today HUD was talking about 5 million illegal alien home mortgage loans that have gone bad.

DOBBS: Five million?

HEDGECOCK: We now have a tsunami of bad debts -- 5 million.

And remember, Tom Tancredo said last week that he had 10,000 illegal alien foreclosures in his congressional district alone. So, we need to go back and understand where this started. This started with giving loans to people who shouldn't have had them in the first place, and now the rest of the taxpayers are being faced with a bill that we or our great grandchildren will never pay.

JOE MADISON (host of radio show The Black Eagle): See, I gotta be -- you know -- this really angers me, because I'm sitting here, Lou and Roger and Mildred and wondering, how is it that people who are illegal get loans when people in my community who are legal have a difficulty getting loans? And if they do get them, they're often from predators?

DOBBS: Well, you know what the reason is? You can say thank you to the United States Treasury Department, and to the regulators of the banking industry, the controller of the currency, the FDIC, and the Federal Reserve, who encouraged the creation of a quote, unquote “market” and permitted the removal of -- and just simply the avoidance of -- the issue of tax ID in order for these banks not only to give bank accounts, but also to give mortgages and low-interest financing to illegal aliens.

MADISON: Lou, I just got a mortgage. And let me tell you, they wanted everything but my first child.

DOBBS: Well, you're not trustworthy, though, Joe.

MADISON: Oh, that's right. I forgot.

DOBBS: We wouldn't know where to find you.

GADDIS: Lou, there seems that, you know, one of the areas of frustration for many Americans who play by the rules and try to get it right is that there is absolutely no talk about the penalty for those who've broken the rules. And people are very upset that what they're talking about now is using taxpayers' dollars to reward people who have literally been corrupt and in many instances broke the law.

The Phoenix Business Journal article headlined “HUD cries foul over illegal immigrant mortgage data” in full:

The U.S. Department of Housing & Urban Development says there is no basis to news reports that more than 5 million bad mortgages are held by illegal immigrants.

A HUD spokesman said Thursday his agency has no data showing the number of illegal immigrants holding foreclosed or bad mortgages.

But news reports, including one aired on KFYI-AM 550 in Phoenix, cite HUD as a source for the illegal immigrant mortgage number. The widely read “Drudge Report” posted a link to the KFYI report, but as of Thursday afternoon the link no longer connected to the story.

Anti-immigration groups point to subprime and foreclosed mortgages given to undocumented immigrants, particularly in cities hard hit by the mortgage crisis, such as Los Angeles, Phoenix, San Diego, Miami and Las Vegas, which also have large immigrant populations.

The follow-up KFYI article in full:

A retired agent from Immigration and Customs Enforcement says that five million illegal immigrants nationwide may hold home mortgages.

Earlier this week, we posted a story that said figures from the Department of Housing and Urban Development showed that home mortgages were held by 5 million illegal immigrants and that this may have contributed, in part, to the housing crisis that has led to the recent failure in the financial markets.

Our source for that story, a retired agent from Immigration and Customs Enforcement, stands by those numbers.

A person from Housing and Urban Development contacted KFYI to tell us the number was inaccurate, that there were only 2.3 million mortgages held by immigrants, so there was no way that 5 million illegals could have mortgages.

When asked what HUD says the correct number is, the person (who identified himself only as 'Brian' and who refused to give his last name), either would not or could not say how many illegal immigrants hold mortgages. He also said there was “no way” HUD would grant an interview on the subject.