Undocumented Subprime Borrowers Pose Risk to Wall Street

Marcelo Rodriguez is in the middle of a chain of lending that has connected Wall Street to New York’s Spanish-speaking community, providing a lifeline to vulnerable borrowers including the undocumented. That lifeline is now starting to fray.

For years, his company, InQmatic, has connected small-business owners with firms that are willing to bankroll risky loans, some of which are then bundled into securities and sold off by big banks. The lenders rarely seemed to put much effort into vetting applicants’ immigration status, Rodriguez said — until recently.