Moving the Spanish-speaking population towards homeownershipMark Brabyn and Arturo Del RioHispanic, homeownership, Spanish-speaking, market, growth
If you aren't currently targeting the Hispanic population with
your marketing efforts, consider these facts:
*According to U.S. Census records, Hispanics accounted for half
of the U.S. population growth since Census 2000 with a growth rate
of almost four times that of the total population.
*One in 10 U.S. residents speaks Spanish at home. The number jumps
to one in four in states such as Texas, California and New
Mexico.
*The U.S. Hispanic population is expected to increase to 63 million
by 2030.
However, it is important to understand that that tapping this
market takes a greater investment than simply hiring a few
Spanish-speaking loan officers and stocking shelves with translated
materials. Brokers who want to develop the Hispanic market must be
committed for the long term. In spite of the numbers, turning
Hispanics into homeowners is a major challenge.
Cultural differences
While American culture stresses values such as individualism and
self-reliance, Hispanic households are embedded in a complex
network of extended family relationships. Though they earn money
individually, more often than not, income is shared among family
members. Close-knit families share housing and rent payments,
borrow freely from each other and cosign loans, making it difficult
to piece together a consistent and verifiable income and credit
history. In addition, Hispanics' perceptions and knowledge about
the home buying process are usually wrong. In Fannie Mae's 2003
National Housing Survey, it was revealed that among
Spanish-speaking Hispanics:
*Forty percent believed that information on buying a home is
only available in English
*Sixty percent believed that you must hire an attorney to purchase
a home
*Almost 80 percent believed that you must have perfect credit to
purchase a home
However, the study also discovered that more than 80 percent of
Spanish-speaking Hispanics feel that owning a home is a very
positive experience and 60 percent believe it's a safe investment
with lots of potential. This leads to the conclusion that with more
education and attention, Spanish-speaking Hispanics comprise a
huge, untapped market. But, if you want their business, youre going
to have to accept the role of educator and exhibit a high degree of
patience and understanding.
Reach them where they are
To succeed in the Hispanic market, you must get out into their
communities and promote yourself. You should constantly educate the
customer, particularly on how the credit system works in America.
One of the best ways to reach them is through counseling agencies
located in neighborhoods where Hispanics already reside. These
agencies can provide a way to access mortgage-ready families.
Consider setting up seminars with translators to teach the basics
of homeownership and credit. Touch base with Spanish-speaking
churches in your area and offer to conduct educational sessions for
their members. You will be viewed as a trusted advisor who knows
the language, has the education and understands the process.
Run ads in your local Spanish-language phone book or newspaper
and distribute flyers in restaurants to get your name out into the
community. Once you complete a successful transaction, ask the
customer if you can use their photo and story in your marketing
efforts. Contact a mail house to purchase mailing labels from zip
codes with high concentrations of Hispanics. Then send out a direct
mail piece in Spanish featuring their story.
Keep the Hispanic culture in mind when creating marketing
pieces. They are "collective" rather than individualistic.
Interaction seeks to preserve harmony and lessen conflict.
Advertising that broadcasts themes of community and family
togetherness will be more effective than ones featuring
self-gratification, ego and prestige.
Speaking their language
The language barrier won't be going away anytime soon. In many
urban areas, product labels, signage, advertising and Web sites are
entirely in Spanish. It is imperative to have translated documents
readily available. Translation services are very affordable,
considering the benefits you will receive. And if you cannot find a
bilingual loan officer, at least hire a loan processor that is
fluent in Spanish.
Operating in a bilingual environment has created a new set of
contingent liabilities. It's important that you make sure the
customer fully understands the terms of the transaction, or you can
be sued for misrepresentation or not disclosing properly. For
example, some states require lenders to provide Spanish-language
translations of legal documents or to have a translator present
during negotiations. Lenders have been sued because the process
began in Spanish but ended in English.
A sure future
The Selig Center for Economic Growth at the University of Georgia
estimates that Hispanic purchasing power in the U.S. will grow 89
percent before 2007 to more than $900 billion. Considering the fact
that Hispanics are already the largest minority group in the
nation, capturing this market is fast becoming a necessity for your
business.
Mark Brabyn is branch president and Arturo Del Rio is a
branch partner of Decision One Mortgage Company LLC in San Diego,
Calif. Mark can be reached by e-mail at
[email protected];
Arturo can be reached by e-mail at
[email protected]. Both
can be reached by phone at (760) 710-3100.
