There were six children in the Mexican family. If their mother was sent back to Mexico, the children would become orphans.
Their father was also an illegal immigrant, and would be repatriated along with the mother if it happened.
However, since he wasn't here, the children would be handed over to Child Welfare Services, which was no better than an orphanage.
The police officer preferred not to deal with the tricky issue, either. He wasn't from Immigration, after all.
More importantly, it was Selina who proposed letting them off, so the officer wouldn't be blamed even if anything happened later.
So, they simply gave the Mexican mother a warning and told her to stop her children from screaming.
In the end, Luke and Selina knocked on her neighbor's door and warned the single man living there, too.
It was this very neighbor who had called the police. Cowed by Luke, he confessed the real reason.