TheMReport — News and strategies for the evolving mortgage marketplace.
Issue link: http://digital.themreport.com/i/987227
26 | TH E M R EP O RT FEATURE I t seems like the demographic profile of borrowers has changed in the blink of an eye. The age, gender, and race of homebuyers has shifted, and the mortgage industry would be wise to pay close attention. By 2024, the country will have 33 percent more first-time minority homebuyers than there are today, according to research compiled from the National Association of Realtors, the National Association of Hispanic Real Estate Professionals, the U.S. Census Bureau, and the Asian Real Estate Association of America. Additionally, Latinos comprise 69 percent of the recent growth in U.S. homeownership, and single females are buying homes at nearly twice the rate of single men. Almost half of all millennials are part of a minority race or ethnic group. That's a substantial number when you consider that the millennial generation makes up the largest share of today's homebuyers and accounts for one in three home purchases. Many lenders are still struggling to effectively reach and engage minority, millennial, and female consumers. They have difficulty developing diverse organizations, particularly at the leadership level, and often remain unaware of the many tools and resources that are available to help. The fact is, achieving diversity is not an instant proposition—it's a multifaceted commitment that encompasses everything you do, whether you're a loan officer or the CEO. Speak Their Language M arket research is a critical part of multicultural B2B marketing. To successfully engage a community, organizations need to know how to best reach it and develop campaigns that reflect its nuances. Companies also need to determine which platforms these communities are most likely to use to see and hear the messages. Including diverse representation in marketing materials is an obvi- ous step. When Latinos, African Americans, Asian Americans, women, and other minority com- munities look at flyers, ads, and social media posts, they should be able to see themselves. Lenders typically do a decent job of representing a diverse population in their marketing, but diversity efforts often, unfortunately, end there, as mortgage companies don't always consider other mean- ingful ways to reach multicultural homebuyers. For example, many lenders will market to Asian Americans in their native languages. But when an Asian borrower wants to move forward with getting a loan, few lenders provide mortgage docu- ments in a language other than English, which can deter borrow- ers from following through with their transaction. To make the loan information gathering or loan pro- cess easier for multicultural bor- rowers, lenders should ask them for their preferred language and be prepared to guide them through the process in that language. Create Awareness T he Hispanic population in particular is forming house- holds at a faster pace than any other demographic," said Jason Madiedo, CEO and President of Alterra Home Loans, a minority- owned, nationwide mortgage lender. "We've created a culture at Alterra that caters to Hispanic and other minority segments by hiring loan officers who are bi- lingual, but more importantly, are familiar with the culture and the special needs of those borrowers." Seventy percent of Alterra's loans are made to first-time home- buyers, and 80 percent are made to minority consumers. Also, borrowers—minority and otherwise—may not be fully aware of all the mortgage options avail- able to them. For example, many potential homebuyers believe they need to have a 20 percent down payment to purchase a home, an impactful burden to some, as research from the U.S. Mortgage Insurers (USMI) shows it typically takes longer for minority borrow- ers to save that 20 percent. On av- erage, it takes African Americans 31 years to save for a 20 percent down payment, Latinos 26 years, and White Americans 20 years. Get Social W hen organizations consider that millennials comprise the largest segment of homebuy- ers, and that nearly half of them are part of a minority race or ethnic group, there's no question that lenders should be focusing on younger generations. Today's young consumer favors digital technology, so it shouldn't be surprising that social media and mobile phones should be part of a lender's diversity efforts. In fact, the average American now spends more time socializing and shop- ping on their mobile devices than on a computer. Lenders can take steps to con- nect with borrowers on social media and mobile platforms. For example, video has become a popular platform for quick com- munication and responses to con- sumers, and originators looking to improve communication and relationships with their borrowers Keeping Up with Demographics Creating a diverse customer base starts by looking at your company culture and community outreach strategies. By Christina Bartning and Kristin Messerli