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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

National Mortgage Professional
Jul 05, 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.
Published
Jul 05, 2005
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