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.”
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.
>>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 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.