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.
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.