Posts

NAHREP Releases Comprehensive English – Spanish Glossary of Real Estate and Mortgage Terminology

Today the National Association of Hispanic Real Estate Professionals (NAHREP), released an English-Spanish Glossary of Real Estate Industry Terms during its 2016 National Convention and Latin Music Festival at the JW Marriott-LA Live. Unlike other glossaries, the English-Spanish Glossary of Real Estate Industry Terms provides both the technical translation for each term and colloquial terminology which are most often used by customers and practitioners.

Featured Sponsors:

 

“A home purchase is widely recognized as the most significant financial transaction most people will make in their lives. For individuals who either prefer to speak Spanish or only speak Spanish, this already complex transaction can become overwhelming,” says NAHREP President Joseph Nery. “This glossary is intended to be a guide to corporations, practitioners and governments looking to create Spanish Language resources for their clients and the general public.”

Featured Sponsors:

In a recent NAHREP survey, top producing Latino agents and loan officers indicated that 40 percent of their transactions make use of Spanish at some point in the transaction, and as much as 25 percent of all transactions utilize Spanish exclusively as the means of communication with their clients. In an already complex and increasingly regulated environment, NAHREP responded to the need to provide guidance and consistency on Spanish-neutral translations of the words and phrases used most frequently over the course of a real estate transaction.

Featured Sponsors:

For more information and/or to download a FREE copy of the glossary, visit www.nahrep.org/glossary.

About The Author

Tony Garritano

Tony Garritano is chairman and founder at PROGRESS in Lending Association. As a speaker Tony has worked hard to inform executives about how technology should be a tool used to further business objectives. For over 10 years he has worked as a journalist, researcher and speaker in the mortgage technology space. Starting this association was the next step for someone like Tony, who has dedicated his career to providing mortgage executives with the information needed to make informed technology decisions. He can be reached via e-mail at tony@progressinlending.com.

Visionary Lending Executive Takes New Position

A.W. Pickel, III, a current member of MBA’s IMB (Independent Mortgage Bankers) Executive Council and the Freddie Mac IMB Advisory Board, has joined Houston-based AmCap Mortgage as president of its newly-formed Midwestern Division. As of October 15th Pickel will be responsible for growing AmCap Mortgage’s retail brand and physical presence in the Midwestern states and beyond, through both acquisition and organic growth. Founded in 2002, AmCap Mortgage is currently licensed in 32 states, originates over $2 billion in retail government and conventional mortgages annually, has approximately 800 employees in over 75 branches and services its own loans.

Featured Sponsors:

 

 
Pickel has almost 30 years of experience in the mortgage industry and joins AmCap from LeaderOne Financial, which he founded in 1992 and led to become a national company producing over $1 billion in mortgages per year. A longtime industry advocate and former president of the NAMB, he founded the Kansas Association of Mortgage Brokers and co-authored the state’s first mortgage broker-banker bill in 1995. He serves on several industry advisory boards and has testified numerous times before the U.S. Congress as a leading mortgage industry expert.

Featured Sponsors:

 
Pickel is also keenly interested in fostering entrepreneurism and financial literacy among the nation’s younger generations, interests he will continue at AmCap Mortgage. “I am an entrepreneur and builder by nature,” Pickel said. “I enjoy building organizations and leading companies as they grow and prosper. I very much look forward to being a part of AmCap Mortgage’s success as the company expands its footprint across the nation.”

Featured Sponsors:

 
Under Pickel’s leadership, LeaderOne Financial went from a local two-person mortgage brokerage to a mortgage banking company licensed in 38 states and servicing over $600 millionin residential loans. He also leveraged technology to make his firm one of the first mortgage companies to become paperless in virtually all aspects of the lending process, years ahead of the rest of the industry. An aviation enthusiast, Pickel is a major in the U.S. Air Force Auxiliary and a Civil Air Patrol search and rescue mission pilot.

AmCap CEO Garrett Clayton said, “It is a tremendous pleasure to have an executive of A.W.’s reputation and experience join the AmCap team. His record of achievement, innovation and industry leadership harmonizes perfectly with AmCap’s commitment to growth, organizational excellence and superior borrower experiences across our entire network. We are delighted to have him heading up the new Midwestern Division of our expanding company.”

A Lot Of Homes Regain Equity

CoreLogic released a new analysis showing 548,000 U.S. homeowners regained equity in Q2 2016 compared with the previous quarter, increasing the percentage of homes with positive equity to 92.9 percent of all mortgaged properties, or approximately 47.2 million homes. Nationwide, home equity grew year over year by $646 billion, representing an increase of 9.9 percent in Q2 2016 compared with Q2 2015.

Featured Sponsors:

 

 
In Q2 2016, the total number of mortgaged residential properties with negative equity stood at 3.6 million, or 7.1 percent of all homes with a mortgage. This is a decrease of 13.2 percent quarter over quarter from 4.2 million homes, or 8.2 percent, in Q1 2016 and a decrease of 19 percent year over year from 4.5 million homes, or 8.9 percent, compared with Q2 2015.

Featured Sponsors:

 
Negative equity, often referred to as “underwater” or “upside down,” applies to borrowers who owe more on their mortgages than their homes are worth. Negative equity can occur because of a decline in home value, an increase in mortgage debt or a combination of both.

Featured Sponsors:

 
For homes in negative equity status, the national aggregate value of negative equity was $284 billion at the end of Q2 2016, decreasing approximately $20.4 billion, or 6.7 percent, from $305 billion in Q1 2016. On a year-over-year basis, the value of negative equity declined overall from $314 billion in Q2 2015, representing a decrease of 9.5 percent in 12 months.

Of the more than 50 million homes with a mortgage, approximately 8.6 million, or 17 percent, have less than 20 percent equity (referred to as under-equitied) and approximately 965,000, or 1.9 percent, have less than 5 percent equity (referred to as near-negative equity). Borrowers who are under-equitied may have a difficult time refinancing their existing homes or obtaining new financing to sell and buy another home due to underwriting constraints. Borrowers with near-negative equity are considered at risk of shifting into negative equity if home prices fall.

“Home-value gains have played a large part in restoring home equity,” said Dr. Frank Nothaft, chief economist for CoreLogic. “The CoreLogic Home Price Index for the U.S. recorded 5.2 percent growth in the year through June, an important reason that the number of owners with negative equity fell by 850,000 in the second quarter from a year earlier.”

“We see home prices rising another 5 percent in the coming year based on the latest projected national CoreLogic Home Price Index,” said Anand Nallathambi, president and CEO of CoreLogic. “Assuming this growth is uniform across the U.S., that should release an additional 700,000 homeowners from the scourge of negative equity.”

About The Author

Tony Garritano

Tony Garritano is chairman and founder at PROGRESS in Lending Association. As a speaker Tony has worked hard to inform executives about how technology should be a tool used to further business objectives. For over 10 years he has worked as a journalist, researcher and speaker in the mortgage technology space. Starting this association was the next step for someone like Tony, who has dedicated his career to providing mortgage executives with the information needed to make informed technology decisions. He can be reached via e-mail at tony@progressinlending.com.

CoreLogic: Foreclosures Are Down Over 25%

Data from CoreLogic shows the foreclosure inventory declined by 29.1 percent and completed foreclosures declined by 16.5 percent compared with July 2015. The number of completed foreclosures nationwide decreased year over year from 41,000 in July 2015 to 34,000 in July 2016, representing a decrease of 71.2 percent from the peak of 118,009 in September 2010.

The foreclosure inventory represents the number of homes at some stage of the foreclosure process and completed foreclosures reflect the total number of homes lost to foreclosure. Since the financial crisis began in September 2008, there have been approximately 6.4 million completed foreclosures nationally, and since homeownership rates peaked in the second quarter of 2004, there have been approximately 8.5 million homes lost to foreclosure.

Featured Sponsors:

 

 
As of July 2016, the national foreclosure inventory included approximately 355,000, or 0.9 percent, of all homes with a mortgage compared with 501,000 homes, or 1.3 percent, in July 2015. The July 2016 foreclosure inventory rate is the lowest for any month since August 2007.

Featured Sponsors:

 
CoreLogic also reports that the number of mortgages in serious delinquency (defined as 90 days or more past due including loans in foreclosure or REO) declined by 17.3 percent from July 2015 to July 2016, with 1.1 million mortgages, or 2.9 percent, in this category. The decline was geographically broad, with declines in 47 states and the District of Columbia.

Featured Sponsors:

 
“Loan modifications, foreclosures, and stronger housing and labor markets have each played a role in bringing the foreclosure rate to the lowest level in nine years,” said Dr. Frank Nothaft, chief economist for CoreLogic. “The U.S. Treasury’s Making Home Affordable program has contributed to the decline through permanent modifications, forbearance and foreclosure alternatives which have assisted 2.5 million homeowners with first mortgages at risk of foreclosure since 2009.”

“Foreclosure rates declined year over year in all states except North Dakota, which experienced a 6 percent increase in its foreclosure inventory related to the drop in energy-related jobs,” said Anand Nallathambi, president and CEO of CoreLogic. “Importantly, judicial states like New Jersey and New York have continued to work through their large inventory of homes in foreclosure proceedings.”

About The Author

Tony Garritano

Tony Garritano is chairman and founder at PROGRESS in Lending Association. As a speaker Tony has worked hard to inform executives about how technology should be a tool used to further business objectives. For over 10 years he has worked as a journalist, researcher and speaker in the mortgage technology space. Starting this association was the next step for someone like Tony, who has dedicated his career to providing mortgage executives with the information needed to make informed technology decisions. He can be reached via e-mail at tony@progressinlending.com.

Partnership Helps Home Equity Lenders

First Lenders Data, Inc., an Austin, Texas-based provider of bundled settlement service solutions to the mortgage lending industry, announced a strategic alliance with Dart Appraisal, a nationwide, independent provider of residential real estate valuation services, headquartered in Troy, Michigan.

Featured Sponsors:

 

 
The strategic alliance provides home equity lenders an expanded number of appraisal vendor options when they order the patent-pending FirstClose Report, an instantaneous data delivery solution that gives lending operations title search, flood certification, valuation and property information with $500,000 of A+ XIII rated lien protection insurance – virtually everything they need for decisioning – in just 30 seconds. It offers home equity lenders a proven way to significantly shorten closing times, drastically reduce costs and decrease risk which can help them stay competitive in the wake of the current refinance boom.

Featured Sponsors:

 
Dart Appraisal manages a nationwide panel of state licensed appraisers and is committed to providing the highest quality and efficiency of appraisal management in the industry. Dart’s appraisers typically live and work within eight miles from subject properties, which means they retain local competence while offering nationwide coverage.

Featured Sponsors:

 
“By creating an alliance with Dart Appraisal, we’re giving our customers the ability to choose from among an even greater number of valuation service providers and add intelligence to automatically order property condition reports, desktop valuations, and other supplemental services,” said Timothy R. Smith, Chief Revenue Officer of First Lenders Data, Inc. (FirstClose). “Our participating lenders can now use Dart Appraisal’s services to improve the way they do business and gain a competitive edge.”

Guess What’s New

Hey, guess what’s new? According to Richard Parsons in his August 17th commentary, there is a boom in bank lending. Banks such as Suntrust and JPMorgan Chase are experiencing increases ranging from 15.5% to 23%. Likewise, real estate values are going up and up. The trifecta of this development is of course the re-emergence of loan products that we never thought we would see again.

Featured Sponsors:

 

 
What in the world is driving these trends? Well for one thing the inventory of previously owned homes is still rather low while builders are introducing new community developments in all areas of the country. For another, there are now down payment assistance programs either already available or under discussion and banks and investors are hungry for more yield in this continuing low interest rate environment.

Featured Sponsors:

 
The primary result of all this news is that banks and investors are expanding their risk appetites, and because they believe that loan quality is once again healthy, they are willing to add more risk to their portfolios. This is evidenced by the increasing volumes of lending activity. Of course, the lending activity reflected in the bank’s number do not necessarily include those loans originated and funded by non-bank lenders which would increase those numbers even more. So should lenders break out the streamers and champagne? Are we back to the early 2000s with another round of increased borrowing just around the corner?

Featured Sponsors:

 
Whoa! Wait a minute. Aren’t we still suffering under the regulations that were piled on after the collapse of 2008? While the obvious answer to that is a qualified yes, in reality the industry is starting to realize the opportunities available from these reversals of fortune. The question is not should we take advantage of these opportunities, but have we learned enough to avoid the same cataclysmic result. Let’s take a look at the issues.

Credit risk, in the form of both underwriting policy and product development prior to the crash, was expanding to include some very hazardous policies. Stated income loans had been offered as early as 1988 to employees of companies that moved and were eligible for their relocation programs. In less than 12 months it became evident that even these stellar borrowers were having difficulty making payments on stated income loans. Yet any additional reviews of the potential for inaccurate income to be used in these loans was either never done or not published. Furthermore, credit criteria in the form of debt-to-income ratios were also pushed ever higher without any acknowledged analysis taking place. Now of course, the ATR and QRM requirements are in place for federally regulated institutions but what about those who are not?

Regardless of these issues, the most significant process failure prior to the meltdown was Quality Control. If nothing else was gained from this catastrophe we learned that the program dictated by the agencies was less than useless. Even though the steps were followed, lawsuits focused on this failure has run into the billions. Yet the agencies have done little to change the requirements despite the fanfare surrounding the new dictates.

So, now we find ourselves in an environment with rising home prices, low interest rates and banks taking on more risk. History tells us this does not look good. It would wise for all of us to remember, “those who fail to learn from history are doomed to repeat it.”

About The Author

Rebecca Walzak

rjbWalzak Consulting, Inc. was founded and is led by Rebecca Walzak, a leader in operational risk management programs in all areas of the consumer lending industry. In addition to consulting experience in mortgage banking, student lending and other types of consumer lending, she has hands on practical experience in these organizations as well as having held numerous positions from top to bottom of the consumer lending industry over the past 25 years.

Lenders Speak Out

website-pdf-download

The mortgage industry is changing. Purchases increased to 65 percent of all closed loans in June, up from 62 percent in May according to the latest Origination Insight Report released by Ellie Mae. This is the highest closed loan purchase percentage since August of 2014. Refinances represented 34 percent of closed loans in June, down from 37 percent in May. Additionally, the 30-year note rate dropped to 4.04 from 4.06 in May, the lowest point in over a year.

Featured Sponsors:

 

 
The average time to close all loans increased to 46 days in June, up from 45 days in May. The time to close a purchase rose to 46 days in June, up from 45 days in May, and the time to close a refinance rose to 47 days in June, up from 44 days in May. Similarly, the average time to close FHA loans rose to 47 days in June, up from 45 days in May. Time to close VA loans increased to 50 days in June, up from 49 days in May.

To reflect on the changes going on in mortgage lending we assembled a panel of well-respecting lenders. (Left to right) Daniel Jacobs, the EVP and managing director of national retail lending for MiMutual Mortgage, Joe Detmer, branch manager for Churchill Mortgage Corp.’s San Diego branch, and Jeff McGuiness, chief sales officer for Embrace Home Loans, shared their views on the state of mortgage lending.

Featured Sponsors:

 
Q: How has mortgage lending changed since you first entered the space?

JOE DETMER: I entered the space in 1994. One thing that has changed dramatically is the rates. It is more affordable to buy vs. renting. People are finding safe haven in real estate. Guidelines have also changed that makes it tougher to get a loan and home prices haven’t gone up much, but housing is very affordable. I also think TRID was a good thing because it pushed out the people that were just in the industry to make money vs. those that are interested in taking care of their clients.

JEFF MCGUINESS: First, the most obvious change is that consumers are more educated. There is more accessibility to education around product types and what the implications are.

DANIEL JACOBS: When I got into the business it was very structured and dominated by sophisticated mortgage bankers and then it went wild. Now I think it has returned to the mid 90s. I feel like I’m back in the beginning of my career whereby everyone is older and more educated.

Featured Sponsors:

 
Q: In your opinion, what does a lenders have to do in order to be successful these days?

JOE DETMER: You have to be competitive with rates and products, but there are so many new things available to borrowers. We have to offer world-class customer service. During your lifetime you are likely to have six mortgages, so you want to be their lifelong advisor. You have to have the heart of a teacher because most people don’t know what we know.

JEFF MCGUINESS: It comes down to one word: efficiency. Regulatory compliance is very complex and those that can absorb that efficiently into their process will win the day. We are all selling the same products so you have to be more efficient overall in how you get those products to market.

DANIEL JACOBS: If we go back to talking about how consumers are more educated, everyone is more sensitive to the experience. To be successful you have to focus on the feeling about the experience among both your borrowers and employees. You have to be focused on the end user experience.

Q: How can lenders do a better job reaching out to Millennials and new borrowers?

JOE DETMER: You have to understand their preference of communication. Kids are growing up in a digital world and you have to be respectful. I’m 54 years old so that was hard for me to adapt to at first. I thought that I had to talk to everyone, but they are okay getting texts. Also, there is so much information out there so you have to distinguish yourself.

DANIEL JACOBS: We talk about that every month in our marketing meetings. The habits of the Millennials are different as compared to our traditional borrowers and they always change. You need to use social media and alternate forms of communication. I think my kids communicate one way only to find that method is now out of style and they’ve moved on to another form of communication. These days we have to provide various options for communication.

JEFF MCGUINESS: You also have to address the complexion of our sales force to make sure that they are serving the borrower. We have an aging employee base. So, you have to have people at the front of the process to relate to new borrowers. Our employees don’t necessarily have to be young, but they do have to know how to reach out and engage younger people.

Q: What’s your take on TRID 2.0 and the overall regulatory burden?

JOE DETMER: I love it. For a long time we created the perfect loan process. TRID has created a flight plan for the clients to know what’s going to happen next if it is communicated correctly by the loan officer. TRID has clarified the process. Second, it got the fraud out of the industry. I don’t see the fraudulent actors anymore. The rules have made lending a more professional industry.

JEFF MCGUINESS: The way we choose to handle compliance is to participate in the industry through the MBA and other outlets so we understand what’s going to happen and how we will be impacted. We don’t argue the point, we spend our time getting ready. You can’t wait until the eleventh hour. The other key is understanding the impact on your people. We have very standard roles in our industry and we have to analyze how these new regulations impact their job. These regulations as administered can be burdensome on our people and we’re concerned about potential burnout. We want to be sensitive to the overall process changes around compliance and how our people are impacted.

DANIEL JACOBS: That’s right. We want to be different without being the pioneer that changes roles completely so everyone feels satisfied in their roles. There are timing differences that arise around when something has to be done and checked. So, what does that mean to our employees? This is a question that we’re always asking because we have to have that balance. A lot of what used to done pre-closing is now getting done at the front of the process, which is changing traditional roles.

Q: What new technologies should every lender be embracing?

JOE DETMER: If lenders are not using Mortgage Coach, I think they are missing the boat. The technology has been around, but it gives the borrower the total cost of the mortgage. It allows you to generate a full wealth presentation. I use it with all of our borrowers. I can give every borrower a total cost analysis of the loan now and over the next few years. Also, you need an active database technology to make it easy for you to keep in touch with your clients. There are only so many clients out there, so you want to keep them so they keep coming back to you. These are not new technologies, but not enough lenders use these tools.

DANIEL JACOBS: Lenders need to spend some time deciding how they are going to monitor and control the use of social media by their employees. That is the biggest compliance risk because there isn’t much oversight and regulators are going to start looking closely at this. So, what is the balance between employee privacy and compliance? Every mortgage company needs to focus on this area. Ignoring social media is a dangerous strategy.

JEFF MCGUINESS: Our LOS systems are challenged to do much more as compared to what they’ve ever done prior. We expect so much of them. It used to be that you could use a subpar LOS and work around it, but you can’t do that anymore. The reliance on the LOS is becoming greater and greater.

Q: Looking to the future, how do you think lending will change over the next few years?

JOE DETMER: You will see a consolidation among smaller mortgage banks. The consolidation won’t be of companies, but rather of mindset. People that don’t wrap their minds around the fact that we’re here to serve the clients will be pushed out. You have to truly serve the homebuying and home owning public.

JEFF MCGUINESS: We have been operating at artificially low rates for some time and that will change. There is also a lot of demand for homeownership. So, how do we meet that need without low interest rate? Are we going to see ARMs come back as a result? Coming off an over-dependence on the agencies, I think we’ll see more private capitol coming back into our space over the next few years.

DANIEL JACOBS: In the short term the mortgage industry will be boring and steady, especially as compared to the Presidential Election. But in the future mortgage lenders will have to learn how to compete with each other just like restaurants do. The wave of the future is how to capture market share.

Insider Profile

Daniel Jacobs is the EVP and managing director of national retail lending for MiMutual Mortgage. With nearly 20 years of experience in the mortgage industry, he has previously had senior positions at American Financial Network, Residential Finance Corporation and Freedom Mortgage Corporation. Jacobs can be reached at djacobs@mimutual.com.

Insider Profile

Joe Detmer is branch manager for Brentwood, Tenn.-based Churchill Mortgage Corporation’s San Diego branch. Detmer brings more than 26 years of experience in the financial services industry. Prior to joining Churchill, he worked as a consultant for Land Home Financial and Skyline Homes (previously Rancho Financial), where he established partnerships with local industry affiliates. He has served as regional sales manager for U.S. Bank Home Mortgage and was instrumental in increasing the bank’s production volume by 600 percent in the San Diego region and surrounding counties.

Insider Profile

Jeff McGuiness is Chief Sales Officer for Embrace Home Loans, an approved lender for FHA, VA and an approved seller servicer for FNMA, FHLMC and GNMA. Embrace Home Loans has remained a prominent leader in the industry, having provided hundreds of thousands of individuals and their families with mortgage loans, and now helping banks to provide home financing through its Affinity and Assisted outsourced mortgage solutions.

Good Headlines?

website-pdf-download

Hey, guess what’s new? According to Richard Parsons in his August 17th commentary, there is a boom in bank lending. Banks such as Suntrust and JPMorgan Chase are experiencing increases ranging from 15.5% to 23%. Likewise, real estate values are going up and up. The trifecta of this development is of course the re-emergence of loan products that we never thought we would see again.

Featured Sponsors:

 

 
What in the world is driving these trends? Well for one thing the inventory of previously owned homes is still rather low while builders are introducing new community developments in all areas of the country. For another, there are now down payment assistance programs either already available or under discussion and banks and investors are hungry for more yield in this continuing low interest rate environment.

Featured Sponsors:

 
The primary result of all this news is that banks and investors are expanding their risk appetites, and because they believe that loan quality is once again healthy, they are willing to add more risk to their portfolios. This is evidenced by the increasing volumes of lending activity. Of course, the lending activity reflected in the bank’s number do not necessarily include those loans originated and funded by non-bank lenders which would increase those numbers even more. So should lenders break out the streamers and champagne? Are we back to the early 2000s with another round of increased borrowing just around the corner?

Featured Sponsors:

 
Whoa! Wait a minute. Aren’t we still suffering under the regulations that were piled on after the collapse of 2008? While the obvious answer to that is a qualified yes, in reality the industry is starting to realize the opportunities available from these reversals of fortune. The question is not should we take advantage of these opportunities, but have we learned enough to avoid the same cataclysmic result. Let’s take a look at the issues.

Credit risk, in the form of both underwriting policy and product development prior to the crash, was expanding to include some very hazardous policies. Stated income loans had been offered as early as 1988 to employees of companies that moved and were eligible for their relocation programs. In less than 12 months it became evident that even these stellar borrowers were having difficulty making payments on stated income loans. Yet any additional reviews of the potential for inaccurate income to be used in these loans was either never done or not published. Furthermore, credit criteria in the form of debt-to-income ratios were also pushed ever higher without any acknowledged analysis taking place. Now of course, the ATR and QRM requirements are in place for federally regulated institutions but what about those who are not?

Regardless of these issues, the most significant process failure prior to the meltdown was Quality Control. If nothing else was gained from this catastrophe we learned that the program dictated by the agencies was less than useless. Even though the steps were followed, lawsuits focused on this failure has run into the billions. Yet the agencies have done little to change the requirements despite the fanfare surrounding the new dictates.

So, now we find ourselves in an environment with rising home prices, low interest rates and banks taking on more risk. History tells us this does not look good. It would wise for all of us to remember, “those who fail to learn from history are doomed to repeat it.”

About The Author

Rebecca Walzak

rjbWalzak Consulting, Inc. was founded and is led by Rebecca Walzak, a leader in operational risk management programs in all areas of the consumer lending industry. In addition to consulting experience in mortgage banking, student lending and other types of consumer lending, she has hands on practical experience in these organizations as well as having held numerous positions from top to bottom of the consumer lending industry over the past 25 years.

Handling A Diverse Population

website-pdf-download

Earlier this year, the Pew Research Center announced 10 demographic trends that are shaping the U.S. and the world. At the top of the list was this: “Americans are more racially and ethnically diverse than in the past and the U.S. is projected to be even more diverse in the coming decades.”

Featured Sponsors:

 

An increasingly diverse population means an increasingly diverse homebuyer population, which means lenders must be prepared to keep pace with the evolving marketplace. This presents an opportunity for improvement and in this effort, lenders can be the leaders in expanding the opportunity for homeownership to everyone.

Creating Internal Diversity

One of the best ways to increase home buying accessibility is to develop a more diverse workforce and business approach. This involves leveraging smarter and more effective approaches to recruiting, training and communicating.

>>Recruiting and Training: Lenders should recruit individuals who exercise a clear understanding of the mortgage industry and their role within it, something that is essential for long term success. Certain intangibles are also important to consider because they are as critical to a lender’s success as the measurable qualities. For instance, recruiting individuals that have a true passion for working with and educating individuals ensures that the right people are leading your efforts to establish and maintain relationships with Realtors and referral partners, and positively influence culturally rich environments. For training, knowledge of processes and regulations are without a doubt a top priority, but your employees should possess a thorough understanding of the demographics and population of the local area, as well as the issues or concerns of prospective borrowers.

Featured Sponsors:

>>Communicating: More diversity in your workforce also facilitates the development of fresh ideas. From a marketing and advertising perspective, things are constantly changing and having a healthy combination of experiences and insights ensures that successful business development strategies evolve appropriately. From a consumer-facing perspective, you’d be surprised how something as simple as employing bilingual loan officers can positively impact a lender’s business and reputation, and eliminating the language and cultural barriers expands the channel of communication and demonstrates a strong commitment to helping others.

When these internal approaches are more strategically aligned, a lender is better positioned to serve borrowers from any walk of life and assume a greater role in educating them on the best mortgage options for their current situation.

Educating the Borrower

During the recession, educational resources weren’t available to many groups of homeowners and financial literacy was not prioritized as it should have been. Because of this, many homeowners did not understand their options and were ill-prepared to manage their situations. As the economy strengthens, more individuals and families are in a position to own homes and lenders must strive to be trusted mortgage partners to support home financing needs.

Borrower-facing efforts, such as educational workshops that target various demographics, are powerful in establishing relationships with an increasingly diverse population in communities across the country whose needs are as unique as they are. For some, paying 20 percent down on a 15-year fixed-rate mortgage may be the most practical approach to owning a home, but as demonstrated by many different loan products, there is no “one-size-fits-all” mortgage. As lenders, we should see ourselves as more than mortgage providers. We should recognize that we are consultative partners on the path to debt-free homeownership and that it is a journey – from prequalification to the final payment. Educating the borrower along the way also removes the intimidation factor of the mortgage process, which provides a positive and enjoyable home buying experience.

The Future of Diversity

It’s easy to get caught up in the business of lending, but it is important to recognize each loan as a family, not a file – and then focus on helping one family at a time. The American dream of homeownership is still very real and by prioritizing recruiting, training and communication strategies with multicultural groups, we will make that dream equally accessibility to everyone. I am confident that, with a concentrated effort from our industry and a willingness to adopt new practices, we will see more positive growth in the coming years.

About The Author

Mike Hardwick

Mike Hardwick is founder and president of Churchill Mortgage, a leader in the mortgage industry providing conventional, FHA, VA and USDA residential mortgages across 33 states. For more information about Churchill Mortgage, visit www.churchillmortgage.com or follow the company on Twitter @ChurchillMtg and Facebook at www.facebook.com/churchillmortgage.

Are Lenders Equipped To Handle Today’s Diverse Homebuyer Population?

Earlier this year, the Pew Research Center announced 10 demographic trends that are shaping the U.S. and the world. At the top of the list was this: “Americans are more racially and ethnically diverse than in the past and the U.S. is projected to be even more diverse in the coming decades.”

Featured Sponsors:

 

 
An increasingly diverse population means an increasingly diverse homebuyer population, which means lenders must be prepared to keep pace with the evolving marketplace. This presents an opportunity for improvement and in this effort, lenders can be the leaders in expanding the opportunity for homeownership to everyone.

Creating Internal Diversity

One of the best ways to increase home buying accessibility is to develop a more diverse workforce and business approach. This involves leveraging smarter and more effective approaches to recruiting, training and communicating.

>>Recruiting and Training: Lenders should recruit individuals who exercise a clear understanding of the mortgage industry and their role within it, something that is essential for long term success. Certain intangibles are also important to consider because they are as critical to a lender’s success as the measurable qualities. For instance, recruiting individuals that have a true passion for working with and educating individuals ensures that the right people are leading your efforts to establish and maintain relationships with Realtors and referral partners, and positively influence culturally rich environments. For training, knowledge of processes and regulations are without a doubt a top priority, but your employees should possess a thorough understanding of the demographics and population of the local area, as well as the issues or concerns of prospective borrowers.

Featured Sponsors:

 
>>Communicating: More diversity in your workforce also facilitates the development of fresh ideas. From a marketing and advertising perspective, things are constantly changing and having a healthy combination of experiences and insights ensures that successful business development strategies evolve appropriately. From a consumer-facing perspective, you’d be surprised how something as simple as employing bilingual loan officers can positively impact a lender’s business and reputation, and eliminating the language and cultural barriers expands the channel of communication and demonstrates a strong commitment to helping others.

When these internal approaches are more strategically aligned, a lender is better positioned to serve borrowers from any walk of life and assume a greater role in educating them on the best mortgage options for their current situation.

Educating the Borrower

During the recession, educational resources weren’t available to many groups of homeowners and financial literacy was not prioritized as it should have been. Because of this, many homeowners did not understand their options and were ill-prepared to manage their situations. As the economy strengthens, more individuals and families are in a position to own homes and lenders must strive to be trusted mortgage partners to support home financing needs.

Borrower-facing efforts, such as educational workshops that target various demographics, are powerful in establishing relationships with an increasingly diverse population in communities across the country whose needs are as unique as they are. For some, paying 20 percent down on a 15-year fixed-rate mortgage may be the most practical approach to owning a home, but as demonstrated by many different loan products, there is no “one-size-fits-all” mortgage. As lenders, we should see ourselves as more than mortgage providers. We should recognize that we are consultative partners on the path to debt-free homeownership and that it is a journey – from prequalification to the final payment. Educating the borrower along the way also removes the intimidation factor of the mortgage process, which provides a positive and enjoyable home buying experience.

The Future of Diversity

It’s easy to get caught up in the business of lending, but it is important to recognize each loan as a family, not a file – and then focus on helping one family at a time. The American dream of homeownership is still very real and by prioritizing recruiting, training and communication strategies with multicultural groups, we will make that dream equally accessibility to everyone. I am confident that, with a concentrated effort from our industry and a willingness to adopt new practices, we will see more positive growth in the coming years.

About The Author

Mike Hardwick

Mike Hardwick is founder and president of Churchill Mortgage, a leader in the mortgage industry providing conventional, FHA, VA and USDA residential mortgages across 33 states. For more information about Churchill Mortgage, visit www.churchillmortgage.com or follow the company on Twitter @ChurchillMtg and Facebook at www.facebook.com/churchillmortgage.