Mortgage lenders find niche in gay, Christian, ethnic groups

Alex Espinoza and his brother began selling real estate to the Hispanic market in 1981. They decided to focus on their own ethnic group because they saw a niche no one was filling at the time in Southern California’s Inland Empire.

“We saw a need to help people,” Espinoza said. “People were buying homes and they didn’t understand the process. They’d have their children helping them out with a major real estate transaction.”

That focus has now extended into a development company and a mortgage brokerage. The Espinoza brothers now do business as De Oro Home Loans, which caters to the Hispanic community. Their story mirrors that of other lenders and mortgage brokers focusing on a specialized niche that they felt traditional companies didn’t understand and weren’t serving well.

Larger lending companies usually are the ones that grab the most attention, while niche lenders quietly go about their business, focusing on the particular group makes sense for them. There are companies that focus on the gay community, Asian American community and others that cater to Christians.

In Boston, Asian American Bank was founded in 1993 by a group of Asian Americans who for several years had seen a pressing need for a community bank in Chinatown. The Chinatown area had been experiencing decline as small businesses could not obtain financing to expand. Non-Chinese absentee owners owned many of the buildings, but did not properly maintain them. People who didn’t speak English were often not treated with respect, so they kept cash at home and handled financial matters through private operators.

Since first opening its doors in Chinatown, Asian American Bank has expanded to include other branches in the Boston area. It has provided financing to many Chinatown businesses, as well as home mortgages for Asian Americans in the Boston area.

The bank is now expanding to offer its services to other new immigrant communities, and has a new loan program aimed at helping new immigrants buy homes.

De Oro has considered expanding beyond the Hispanic market since “there’s a lot of other ethnic groups that are underserved.” But a this point, Espinoza said, the company probably couldn’t serve those other groups as well as it would like to serve them. For now, it’s focus is on serving the Hispanic market.

“It’s the analogy of the laser beam,” Espinoza said. “It’s ordinary light, but it’s focused and concentrated so you can do tremendous things with it.”

About 80 percent of the company’s staff is bilingual in English and Spanish, making it easy to produce its own marketing and informational materials in both languages, Espinoza said. The loan documents are in English, but the staff goes over everything in Spanish with consumers.

“We’re interpreting not only the language, but also where a family fits and what the best program is for them,” Espinoza said.

That also means understanding the culture, which sometimes involves a pooling of resources from extended family and friends for things like down payments. More mainstream companies might not know those possibilities exist with Hispanic customers and might never explore the option, he said.

Focusing on such a niche also has disadvantages. While the Hispanic community is very upwardly mobile, that also means there are a lot of people on the lower rungs of the socio-economic ladder, Espinoza said. The resources they need to buy a home are beyond their reach.

But the company has helped more than 16,000 consumers since its inception – it serviced about $110 billion in loan volume last year. De Oro also has helped homeowners tap their equity for college educations, paying off other sources of consumer debt and other investments.

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