TheMReport — News and strategies for the evolving mortgage marketplace.
Issue link: http://digital.themreport.com/i/987227
28 | TH E M R EP O RT FEATURE could consider using this medium to respond to questions or send quick updates. Video can also be used on social media by record- ing it through a computer or smartphone and sending directly through Facebook messenger or text message, two of the most popular ways to communicate among millennials. Video allows originators to communicate com- plex mortgage topics that would otherwise be difficult to explain in a text message, while deliver- ing it through the convenience of an instant message. Additionally, videos allow consumers to build a relationship and greater trust with their originator. Take Action D iversity isn't just about selling loans to more diverse home- buyers—it's about building diverse organizations as well. In this respect, the mortgage industry still has a long way to go. According to a 2015 study by the STRATMOR Group, 81 percent of all loan offi- cers identified themselves as white, compared to 10 percent who identified as Latino, and 3 percent as black or African American. There are two compelling rea- sons to change. The first is Section 342 of the Dodd-Frank Wall Street Reform and Consumer Protection Act, which sets forth diversity and inclusion objectives that apply to regulated financial institutions (see sidebar). Secondly, it makes practical business sense for lenders to pursue their diversity objec- tives—research shows a diverse workforce can improve financial performance, lead to more innova- tion, and help attract a diversified customer base. In a study of more than 1,000 companies across 12 countries, McKinsey & Co found that the top 25 percent of organi- zations based on ethnic diversity were 33 percent more likely to have higher-than-average profits. One way to begin is to create a corporate vision or a statement that addresses the company's values. Of course, words without action aren't much use—for real change to happen, organizations must walk the walk. Ask for Help M any lenders avoid making a sincere effort at diversity not because they think it's unim- portant, but because they don't understand how to get started. Fortunately, there is plenty of help available in the industry, from business partners that have al- ready developed mature diversity initiatives, as well as resources provided by third-party firms, industry groups, and others that specialize in helping lenders reach more diverse markets. Tackling diversity in the mortgage industry isn't easy. The payoff, however, is extraordinary. The numbers don't lie—the future of the housing industry lies in millennials and minority borrow- ers. Today's mortgage industry is at a crossroads in which diversity is not a gimmick or a competitive advantage; it's a mandate. Here's one final thought. While various cultures might be com- pletely distinct from one another in many aspects, in the end every homebuyer wants the same thing—value and quality they can afford. If leaders keep that in mind as they build a diverse organization, they're sure to be successful. CHRISTINA BARTNING is VP, Marketing and Client Solutions for National MI, a private mortgage insurer based in Emeryville, California. She has 20 years' experience in the mortgage industry and has been with National MI since the company's launch in 2012, building the marketing and the product development team from the ground up. She can be reached at Christina.Bartning@NationalMI.com. KRISTIN MESSERLI is Founder and CEO of Cultural Outreach Solutions, which helps companies reach millennials and underserved segments through employee training, market research, and digital strategy. She can be reached at Kristin@ CulturalOutreach.net. Does Your Company Encourage Diversity? T here's good reason for financial institutions to focus on hiring minorities and women. Mortgage lenders should be aware of what's known as Section 342, a little-known provision of the Dodd-Frank Wall Street Reform and Consumer Protection Act. In June 2015, the CFPB and other federal regulators set standards to measure whether financial institutions regulated by the federal agencies were encouraging diversity in their policies and business practices. Section 342 of the Dodd-Frank Act directs finan- cial institutions and their vendors to diversify their workforce to include minorities and women to the maximum extent possible. The new standards pro- vide covered entities with a framework to conduct annual self-assessments of diversity and inclusion efforts that focus specifically on the following: • An organizational commitment to diversity and inclusion • A strategic plan on diversity and inclusion for em- ployment and contracting, including recruiting, hiring, retention, and promotion • Training and educational opportunities for minori- ties and women • Practices to promote transparency of diversity and inclusion efforts Section 342 also provided financial institutions with suggestions on best practices for diversity and inclusion: • Appoint senior-level officers to direct diversity and inclusion efforts • Participate in conferences, workshops and events that attract and serve diverse populations and communities • Outreach to minority and women organizations • Outreach to educational institutions serving sig- nificant minority and women student populations It's important to note that the standards are voluntary: there isn't an enforcement mechanism in place under Section 342. Mortgage lenders and oth- er financial institutions would be wise to follow the framework outlined under Dodd-Frank. A diverse workforce can help attract a diversified customer base and improve your bottom line.