Rising rates don't mean the sky is falling - Credit analysis, optimization and simulation help lenders close more loans, regardless of what the rates do

Rising rates don't mean the sky is falling - Credit analysis, optimization and simulation help lenders close more loans, regardless of what the rates do

July 5, 2005

Daunting problems persist in breaking barriers to Hispanic homeownershipMortgagePress.comNHI, National Housing Initiative, CHCI, Congressional Hispanic Caucus Institute
An 11-city focus group study conducted in traditional and
emerging Hispanic regions found that while Latino consumers, like
many Americans, want to own a home in a safe neighborhood and
create intergenerational wealth for their children, current
industry practices constitute barriers to them potentially doing
so. The findings also revealed that unless certain institutional
business practices are changed, the Hispanic homeownership rate (48
percent) will continue to lag significantly behind the population
at large (68 percent), and the Latino consumer market may never be
fully realized.
The focus group study was released at a national press
conference by the Congressional
Hispanic Caucus Institute's (CHCI) National Housing Initiative (NHI), a
bipartisan effort designed to increase homeownership opportunities
for Latinos across the country.
"Our message to the industry is that to effectively reach the
Hispanic consumer, corporate messages and innovative product
development must be consistent to what happens on the front line,
said Ron Jauregui, one of three senior housing professionals
participating in the NHI two-year fellowship program. Without a
sincere understanding of the Hispanic consumer's experience and the
trust factor that exists within it, neither the message nor the
product will resonate."
While the industry has recognized that Latinos are critical to
the future of American homeownership and are taking steps to better
serve them, such as hiring more bilingual staff and innovative
product development, focus group findings illustrate a disconnect
from the commitment "at the top" to the actual customer service
many Hispanics in the low- to moderate income category are
receiving. The report stated "that many (loan officers) cannot take
the time needed to 'hold their hand' through the process."
According to the study, despite good faith efforts by the
industry, the lack of special attention reinforces Hispanics' fear
and distrust of mainstream institutions due to predatory lending
practices, pressures to purchase, complex home buying procedures
and lack of flexible and quality loan products.
While "hand holding" may not be part of standard institutional
practices, the findings state a new commitment to help Hispanics
better understand the process, which may be what it takes to get
more Latinos into homes.
During the press conference, NHI Fellows recommended that the
industry reform the way frontline mortgage sales agents are
compensated by increasing monetary incentives for serving consumers
who need more tailored assistance. Also suggested were more
flexible underwriting and credit scoring standards. In addition,
creating a secondary market that will purchase mortgage loans sold
to immigrants with an Individual Tax Identification Number will
help the industry tap the significant "new arrival" community
expected to make up a substantial percentage of the 14-16 million
minority households by 2010. NHI Fellows conducted consumer,
advocate and industry focus groups in 11 U.S. cities, including
Atlanta; Chicago; Durham, N.C.; Kansas City, Kan.; Las Cruces,
N.M.; Las Vegas; Los Angeles; Miami; New York; San Antonio; and San
Juan, Puerto Rico.
For more information, visit www.chci.org.