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TH E M R EP O RT | 31 ing practices, lenders can carefully analyze their business models to find ways to attract borrowers from these minority groups. If lenders can get over the hurdle of their perceived risk, it will allow them to increase their business by expanding the opportunity for homeownership to an untapped and underserved market. There are many business practices a company can utilize to reach minority populations: » » Through marketing, a lender can increase exposure among minorities, which will, in turn, generate business. Lenders should create advertisements aligned with minor- ity groups' needs. Bilingual advertising could increase the exposure of a lender's business while giving the impression, in a consumer's mind, that the company will customize the borrowers' experience to ensure customer satisfaction. » » Training of underwriters to account for borrowers' various sources of income is another step. It is not uncommon for potential borrowers to have two or three jobs, which may be unsettling to an un- derwriter and reason for denial. Cooper found that some potential borrowers may obtain money from friends or relatives. These income sources are accounted by corresponding gift letters, which is also frowned upon by lenders. Underwriters need to loosen standards to take into account black and Latino cultures, which often influence how minorities handle their finances and their household living situations. » » Lenders should act proactively and moni- tor disparity with respect to underwriting. Furthermore, lenders need to clarify what data will be considered when monitoring for disparate impact occurrences. To assist with these efforts, there are companies that offer complete suites of technology tools to assist in monitoring to ensuring compliance with fair lending laws. » » Lenders may be successful in reaching a greater number of minority borrowers by simply hiring more minority employees and enacting diversity training. These em- ployees can better relate to minority cus- tomers, especially if there exists a language barrier. Further, lenders need to develop a culture of diversity and encourage employ- ees to learn various cultures and customs. Lenders should also train their employees on basic fair lending laws, diverse lending practices, and utilizing a complaint policy and resolution system. » » Rent-to-own programs allow lenders to reach those who have little cash and low monthly incomes. Since minorities generally have a lower monthly income than white Americans, these programs help lenders reach this population segment. » » Finally, lenders should consider community outreach to under-served communities. This type of outreach would be a win-win for both lenders and minorities, since it enhances the lender's branding throughout the community. For instance, a lender could sponsor a program that educates community members about the home buying process and financial management. Such a program would not only exemplify the lender's community involvement, but also help residents be more viable as borrowers. There is a sizeable piece of the market that has yet to be tapped by lenders with respect to minorities. Lenders need to put aside the fears and generalizations about lending to minorities. The disparate impact ruling of the Supreme Court should not be viewed as a death sentence, but rather as an invitation to improve relations with, and to realize the financial possibilities of increased business with, minorities. DEBBIE HOFFMAN is the chief legal officer at Digital Risk, LLC, and the head of legal, North America, for Mphasis, an HP company (the parent company of Digital Risk). Hoffman is responsible for overseeing legal and compliance matters, and provides legal expertise and review in all aspects of the corporate legal environment. She is responsible for regulatory compliance, corporate contracts, employment matters, intellectual property, third- party litigation, and assessing related risks. She manages a team of in-house attorneys as well as directs outside legal counsel. DR. RICK ROQUE is managing director for retail lending for Michigan Mutual, a non-bank mortgage lender that is growing its organization capabilities across the nation. A longtime industry figure who has written and spoken extensively on a broad variety of topics, Dr. Roque is also a manage - ment and technology expert who has worked with Seagate, PushMX, Calyx, and Ellie Mae. He is affiliated with the MENLO Company, a consulting services firm whose focus is banking, consumer lending products and higher education funding. FEATURE