Florida Home Loan Lenders Need to Expand Into New Consumer Markets
Jorge Caceres is the director of emerging markets for Genworth Mortgage Insurance. By 2010, he says one-fifth of the U.S. population will be Hispanic in recent origin and of that three-quarters will reside in only seven states: Arizona, California, Florida, Illinois, New York, New Jersey and Texas.
With the Sunshine State on that list, lenders need to expand their coverage when it comes to considering possible Florida home loan applicants. This should happen right away, moreover, because this supposedly emerging demographed has, well, already emerged.
“We’re mainstream already,” declares Hernan Guaracao, publisher of Al Dia, a Spanish language newspaper based in Philadelphia.
If buying power is proof, Guaracao is correct. The disposable income of Hispanic immigrants will top $1.08 trillion by the end of the decade, according to the University of Georgia’s Selig Center for Economic Growth.
New methods for a new Florida home loan market
Instiitutional lenders in the U.S. are beginning to question whether their well-honed methods for identifying, measuring and controlling customer behavior will not fit the new breed of customers.
Consider recent comments by the chair of the Mortgage Bankers Association, discussing the industry’s much-prized automated underwriting procedures, used most often by lenders making Florida home loans in conformance with limits set by Fannie Mae and Freddie Mac, currently at a ceiling of $417,000 for single-family home loans.
“I have had controversial discussions with both the GSEs (government-sponsored enterprises) on this,” reports Regina Lowrie, president and CEO of Gateway Funding Diversified Mortgage Services. Lowrie is serving a one-year term as MBA chair, expiring in October.
“We are of a mindset that at the time of application we can run [any] borrower through an AU system and get a decision,” says Lowrie, noting that industry has moved so much to an automated underwriting. But will this have to change?
The approach of new home buyers
Many Hispanic immigrants shy away from mainstream lenders; illegals due to fears of deportation, others simply used to cash transactions, born from decades of financial crises and currency devaluations in Latin America.
“We need to do a better job of serving this customer; finding systems and ways that we can deal with the differences in their credit and their savings and their employment history that are part of a socio-economic culture,” Lowrie says.
“Not only do you have a growing population (but) it’s a young population: 66.8 percent of Hispanics in the U.S. are 34 years old and under,” says Caceres, adding: “We like this because that’s the age of the first-time home buyer; it really falls into that ’sweet spot’ of opportunity.”
Programs are being put in place to help this demographic with its Florida home loans. It’s important to make sure they aren’t being taken advantage of in the market.
