Mortgage Industry Trends

     To many mortgage professionals the idea of closing more loans from immigrants within their local communities remains just that, an idea. The numbers of immigrants that live in the United States cannot be challenged and there is no doubt a large percentage of future first time home owners will be comprised of the immigrant population. Mortgage companies are continuing to try and hold on during this seemingly never ending turmoil within the industry. Sure, mortgage brokers are always looking to close more loans but now these same mortgage brokers are attempting just to keep their doors open. They fail to realize that an answer to their predicament can be found right in their own communities and that is first time Hispanic home buyers.

     It’s as though mortgage professionals have blinders on when it comes to recognizing that to increase their business they should work within the minority immigrant communities. Case in point. A few years ago during the refinance boom the mortgage industry was so enthralled with all the profits they were making that they didn’t adequately plan for the eventuality that the boom was going to fade. And sure enough when the boom ended abruptly, mortgage brokers and loan officers across the nation were scrambling to find new clients. During that time I predicted, tongue in cheek of course, that I could envision an executive meeting at one of the top lenders in the country. During the meeting the CEO would admonish is management team for not being prepared for a down turn in the industry. And someone would speak up and say, “Hey, I’ve got an idea. Let’s go after the Hispanic market I understand there are quite a few of them living in the United States”. This observation would come as though Hispanics just kind of showed up one day in America.

     My prediction came true while I spoke to a Sr. Vice President of Marketing for a top ten mortgage company. I was told that for two years this individual had broached the subject with management about marketing to Hispanic home buyers but received no response because the company was raking in the profits from the refinance boom. It was only after the boom ended that the CEO admitted that may be this Hispanic home buying market could be a good thing for the company.

     In my opinion, this is the same thing that is going on now. Because the mortgage industry is in a turmoil mortgage professionals are focusing on the wrong path to take for closing more loans. I’ve been in sales and sales management for over 30 years and one thing I do know is that sales people are just like water, they always take the path of least resistance. A year ago, very few in the industry were seeking out ways to close reverse mortgages and now it appears as if they have found the answer to their profit tumbling woes. Once again it’s the path of least resistance and once again the industry will probably over extend their abilities by closing reverse loans to senior citizens that should have never had signed a reverse loan closing document in the first place.

     I get asked frequently if I am enamored with the immigrant population, especially Hispanics, in America. My answer is always the same “No”. Because I see a market that has virtually been untouched and continues to be so. The problem I see is many mortgage professionals shy away from working with the Hispanic home buying community. It doesn’t fit the ideology of the industry “Give me your W-2 and your FICO score and I will tell you in five minutes what you qualify for”.  

     Working with first time Hispanic home buyers takes time and effort and in our fast paced world many professionals don’t want to take the time or the effort. There is also a fear factor which is just part of human nature. If you don’t speak the language and you’re not familiar with other people’s cultural customs it can make you feel inadequate and uneasy. But those situations can be overcome if only the time and effort is put into making it happen.

     Here’s a simple secret about marketing to Hispanics or to basically any minority immigrant market in America. You must earn their trust first before they will sign on the dotted line. Seems rather simple doesn’t it? But it’s absolutely true and once you close one loan with a Hispanic borrower you can rest assured that you’re going to get many referrals coming to you from the borrower’s family, friends, neighbors, etc. What I’ve learned is it may take a longer time to close your first Hispanic home loan but it will be well worth the effort and rewards will be great.

     I’ve always said that immigrant borrowers are just like American born borrowers, they’re confused about the mortgage industry and how to go about getting a loan in the first place. But I take that farther because Hispanic immigrants come from countries were two things are distrusted most – bankers and lawyers. And guess who is involved in the American mortgage process – bankers and lawyers. Secondly, our credit system is basically a quagmire of strange rules and regulations that nobody finds easy to follow.

     Imagine if you are speaking with a Hispanic immigrant that has been in America for a year and has a good job and can well afford a new home loan. “Do you have any credit?” “No because I pay everything in cash”. “Okay, do you have a FICO score?” “What’s that?” “Okay, do you have any money in the bank?” “No, I don’t have a bank account but I do have several thousand dollars hidden away”. “Okay, so apply for a credit card and make several charges on your credit card”. “You mean go into debt?” “Yes, after you’ve owed your credit card company for several months come back to see me and I’ll see what I can do”.

     Rather odd don’t you think? We have to go into debt first before we can get our first home loan. Couple that with the fact that many immigrants don’t understand the American banking system and you may understand why it’s difficult to get immigrant borrowers qualified. But there is hope and I will provide you more insight on working within the Hispanic home buying community in my next Blog.