TheMReport

46 | TH E M R EP O RT O R I G I NAT I O N S E R V I C I N G DATA G O V E R N M E N T S E C O N DA R Y M A R K E T THE LATEST DATA Diversity in Lending: Catchphrase or Commitment? The topic of diversity has become a hot one over the last few years, but what can lenders do to ensure it's not just a fad—but a long- term effort and initiative? By David Kittle T he future of many companies—success or failure—could be decided by one spe- cific characteristic, and it's not in margin increase or hedging profit- ability. It's whether or not they're committed to entering the diverse minority lending markets. Traveling the country and speaking to mortgage banker groups and state associations, one thing is clear: most of the audi- ence is over 50, male, and white. There's very little youth or minor- ity represented in the audience. Who will be the successors to the mortgage industry, the next generation of leaders? When pos- ing this question to the audience, one response is companies are recruiting and hiring younger, more diverse sales staff. That's great, but why aren't they send- ing them to the meetings and conferences? Where's the long- term investment toward internal practices? It's important enough for executives and leadership teams to attend, so why not the company's future as well? Diversity must be a cultural change inside companies, and not just at the board level. According to the Joint Center for Housing Studies (JCHS) at Harvard University, as many as 17 million new U.S. households will be formed from 2010 to 2025 and up to 13 million of these new households could be com- prised of minority families. How will lenders communicate with the future borrower—and not just at the origination of the loan, but throughout the entire process all the way to servicing? Maria Zywiciel, President of the National Association of Hispanic Real Estate Professionals (NAHREP), had this advice: • Hire/Partner with companies that not only have diverse consumer expertise but also industry expertise • Take inventory of operations support teams. There is gener- ally more diversity represented among the operation ranks than in sales. It could be a great po- tential career path. Promoting a solid operations employee to sales internally is usually more beneficial than seeking and hiring inexperienced sales staff outside the company. • Attract diverse talent by show- casing: senior leadership that is committed to the segments, di- versity among the various ranks of the organization, a marketing team that can support their ef- forts, and a culturally compe- tent operations group. • Get involved in trade orga- nizations like the National Association of Hispanic Real Estate Professionals to acquaint yourself with the movers and shakers. Don't be intimidated; engaging with these groups doesn't require Hispanic heri- tage or even the ability to speak Spanish to join. The JCHS reports that lending demographics will be up to 70 percent Hispanic, Asian- American, and African-American by 2025, and the Home Mortgage Disclosure Act says if companies are not serving these markets, they could be at risk of redlining. This data should necessitate diverse markets as vital company strategy. With many minorities— particularly Latinos—largely being first-time homebuyers, it's a market that deserves a concerted approach. That would include not only marketing and fulfillment strategies, but also recruiting strategies to reflect the consumer base. Let's not forget the reverse side of the youth diversity equation. If reverse mortgage is part of a com- pany's playbook, then a youthful origination staff can't develop the relationships necessary to compete in the marketplace. People of age are imperative to the pro- cess when discussing an over-62 mortgage product with someone considered a senior citizen. In this arena, hiring age experience goes a long way. In 2025, the minority will be the majority. Companies must prepare and invest now to suc- cessfully engage long-term in diversity or prepare to be left behind. DAVID KITTLE began his mortgage- banking career in 1978 with American Fletcher Mortgage Company. Kittle is a founding partner, President and Board Vice Chairman of The Mortgage Collaborative. He served on MBA's Board of Directors from 2004 through 2010. Kittle is past Chairman of the MBA in Washington, D.C. He testified 14 times before Congress and led the in- dustry during its most tumultuous period. What Will Buyers Pay at Today's Mortgage Rates? Rates have climbed slightly, but they still come in well below their crisis-era high points. T he week leading up to Independence Day showed multiple climb- ing mortgage rates, according to Bankrate's Weekly Survey. Though mortgages are constantly in flux, they remain much lower than their Great Recession rates, making it a great time for buyers to lock in a rate. In early July, the benchmark 30-year fixed mortgage was up seven basis points from the week prior, coming in at 3.87 percent. This is slightly higher than June's average rate, which was 3.76 per- cent. Buyers would pay $469.95 per month in principal and inter- est at the current average rate for every $100,000 they borrow. The average 15-year mortgage rate is at 3.06 percent. Of course, 15-year mortgage payments will be much higher than the 30-year, but buyers will also spend thousands less in interest and build equity much quicker. Buyers will have an average monthly payment around $693 per $100,000 at this rate. Five-one ARMs, which are best for those who expect to sell or refinance before the first or second adjustment, experienced a seven basis point increase, bring- ing it to 3.20 percent. According to Bankrate, rates could be substantially higher when the loan first adjusts. At 3.20 percent, 5/1 ARM payments are estimated at $432 for each $100,000 bor- rowed over the initial five years. Depending on the loan's terms, this number could skyrocket by hundreds of dollars after that.

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