Current industry practices create barriers to Hispanic Americans owning homes in safe neighborhoods, according to a study released during the Congressional Hispanic Caucus Institute’s National Housing Initiative. And unless certain institutional business practices are changed, the Hispanic home-ownership rate, which is currently 48 percent, will continue to lag significantly behind the overall population’s home-ownership rate, which is 68 percent.

The National Housing Initiative is a bipartisan effort designed to increase home-ownership opportunities for Latinos across the country. The group conducted an 11-city focus group study in traditional and emerging Hispanic regions.

“From the consumer to the loan officer, we all share the burden of the Hispanic home-ownership divide,” said Ron Jauregui, one of three senior housing professionals participating in the NHI two-year fellowship program. “However, 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. 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.”

Three NHI Fellows including Jauregui, Alejandro Becerra and Rebecca Villalpando, presented the focus group findings this week.

While the industry has recognized that Latinos are critical to the future of American home-ownership 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 receive.

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 may be what it takes to get more Latinos into homes.

NHI Fellows recommended the industry reform the way frontline mortgage sales agents are compensated by increasing monetary incentives for serving consumers who need more tailored assistance. The group also suggested implementing more flexible underwriting and credit scoring standards. In addition, they said 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.

“It is important to underline that it was with the industry’s support that NHI was created to seek out the solutions necessary to help them effectively reach a community it hopes to serve. While our corporate partners understand that new results only stem from new ways of conducting business, they also believe the notion that institutions must cater to the Hispanic market, not vice versa, if the Hispanic home-ownership rate is going to improve,” Becerra said.

NHI Fellows conducted consumer, advocate and industry focus groups in 11 U.S. cities including Atlanta; Chicago; Durham, N.C.; Kansas City, Kansas; Las Cruces, N.M.; Las Vegas; Los Angeles; Miami; New York; San Antonio, Texas; and San Juan, Puerto Rico.

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Send tips or a Letter to the Editor to jessica@inman.com or call (510) 658-9252, ext. 133.

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