SAN FRANCISCO–The so-called emerging markets of minority and immigrant populations often have intense brand loyalty, and yet they largely remain an untapped source of potential income for the mortgage industry.

To reach those potential home buyers, mortgage lenders must have employees who look and sound like and relate to their communities, California Congressman Xavier Becerra said Tuesday at the Mortgage Bankers Association’s annual convention.

SAN FRANCISCO–The so-called emerging markets of minority and immigrant populations often have intense brand loyalty, and yet they largely remain an untapped source of potential income for the mortgage industry.

To reach those potential home buyers, mortgage lenders must have employees who look and sound like and relate to their communities, California Congressman Xavier Becerra said Tuesday at the Mortgage Bankers Association’s annual convention. Doing so will establish trust with those groups and often earn the company dedicated customers who will refer family and friends.

“They’re out there, they’re ready and they’re looking for people they can partner with,” Becerra said.

Becerra’s comments came as part of a roundtable discussion on “Emerging opportunities: the changing landscape of residential finance.” He was joined by MBA staff members and a host of others involved in various aspects of the mortgage and real estate industries.

Becerra, who is Latino, said referring to minorities and immigrants as ’emerging’ markets is no longer accurate. Those populations have been in the country for years, he said, and are considered ’emerging’ only because companies are starting to recognize their purchasing power. Businesses are realizing they can provide a legitimate and much needed service to these communities while boosting their bottom line.

Demographics show those emerging markets will only become more prevalent. The nation’s Latino population is one of the youngest and fastest growing nationwide. By 2008, it is expected to increase by 30 percent, he said.

That leaves open a wide market of potential home buyers, especially considering that the rate of home ownership among Latinos and other minorities trails that of whites. About 75 percent of white families own their homes; among Latinos, the figure is closer to 48 percent.

In some states, Latinos make up a sizable chunk of the home buyers. In New Mexico, they make up about 30 percent of recent home buyers, said Doug Duncan, MBA’s chief economist and senior vice president. That’s followed by California at about 22 percent and Texas at 21 percent.

Yet the country’s increasing diversity is not limited to certain states or even to urban areas, Duncan said. Small communities across the nation are becoming more ethnically diverse.

“There’s an opportunity out here that we as lenders need to serve better,” said Tim Doyle, MBA’s director of government affairs.

But challenges remain in serving those populations. The list includes a lack of affordable housing, lack of financing and credit issues, among others, Doyle said.

Serving those communities “will take a commitment, but also a change in perspective,” he said. For example, credit reporting is often biased against young, first-time home buyers, which describes many prospective minority buyers. Lenders need to change their view of the origination process by expanding it to include reaching out to those communities before they even contact a real estate agent or loan officer. That means playing more of a counselor role for financial literacy and the entire home buying process, including post-settlement, Doyle said.

Lenders also must continue to expand their product offerings to reach more people within those groups, Doyle said. Some obstacles are outside lenders’ control, such as the lack of affordable housing, but lenders can be strong advocates for changes on those fronts. That includes questioning whether home builders are doing enough to help by building houses that these communities can afford to buy, Duncan said, not just trying to fix everything from the financing side.

***

Send tips or a Letter to the Editor to samantha@inman.com or call (510) 658-9252, ext. 140.

Show Comments Hide Comments
Sign up for Inman’s Morning Headlines
What you need to know to start your day with all the latest industry developments
By submitting your email address, you agree to receive marketing emails from Inman.
Success!
Thank you for subscribing to Morning Headlines.
Back to top
Only 3 days left to register for Inman Connect Las Vegas before prices go up! Don't miss the premier event for real estate pros.Register Now ×
Limited Time Offer: Get 1 year of Inman Select for $199SUBSCRIBE×
Log in
If you created your account with Google or Facebook
Don't have an account?
Forgot your password?
No Problem

Simply enter the email address you used to create your account and click "Reset Password". You will receive additional instructions via email.

Forgot your username? If so please contact customer support at (510) 658-9252

Password Reset Confirmation

Password Reset Instructions have been sent to

Subscribe to The Weekender
Get the week's leading headlines delivered straight to your inbox.
Top headlines from around the real estate industry. Breaking news as it happens.
15 stories covering tech, special reports, video and opinion.
Unique features from hacker profiles to portal watch and video interviews.
Unique features from hacker profiles to portal watch and video interviews.
It looks like you’re already a Select Member!
To subscribe to exclusive newsletters, visit your email preferences in the account settings.
Up-to-the-minute news and interviews in your inbox, ticket discounts for Inman events and more
1-Step CheckoutPay with a credit card
By continuing, you agree to Inman’s Terms of Use and Privacy Policy.

You will be charged . Your subscription will automatically renew for on . For more details on our payment terms and how to cancel, click here.

Interested in a group subscription?
Finish setting up your subscription
×