Article from The M Report - Published July 4, 2017 Click here for original article.
Author - David Kittle, President & Vice Chairman of The Mortgage Collaborative
The future of many companies—success or failure—could be decided by one specific characteristic, and it’s not in margin increase or hedging profitability. It’s whether or not companies are committed to entering the diverse minority lending markets.Traveling the country and speaking to mortgage banker groups and State Associations, one thing is clear: most of the audience is over 50, male, and white. There’s very little youth or minority represented in the audience.
Who will be the successors to the mortgage industry, the next generation of leaders? When posing this question to the audience, one response is companies are recruiting and hiring younger, more diverse sales staff. Great! But, why aren’t they sending them to the meetings and conferences? Where’s the long-term investment towards internal practices? It’s important enough for executives and leadership teams to attend, so why not the company’s future as well?
Diversity must be a cultural change inside companies, and not just at the board level. According to the Joint Center for Housing Studies (JCHS) at Harvard University, as many as 17 million new U.S. households will be formed from 2010 to 2025, and as many as 13 million of these new households could be comprised of minority families.
How will lenders communicate with the future borrower—and not just at the origination of the loan, but throughout the entire process all the way to servicing?
Maria Zywiciel, President of the National Association of Hispanic Real Estate Professionals (NAHREP), had this advice:
The JCHS reports that lending demographics will be up to 70 percent Hispanic, Asian-American, and African-American by 2025, and the Home Mortgage Disclosure Act says if companies are not serving these markets, they could be at risk of redlining! This data should necessitate diverse markets as vital company strategy. With many minorities—in particular Latinos—largely being first-time homebuyers, it’s a market that deserves a concerted approach. That would include not only marketing and fulfillment strategies, but also recruiting strategies to reflect the consumer base.
Let’s not forget the reverse side of the youth diversity equation. If reverse mortgage is part of a company’s playbook, then a youthful origination staff can’t develop the relationships necessary to compete in the marketplace. People of age are imperative to the process when discussing an over-62 mortgage product with someone considered a senior citizen. In this arena, hiring age experience goes a long way.
In 2025 the minority will be the majority! Companies must prepare and invest now to successfully engage long-term in diversity, or prepare to be left behind.
TMC - Chief Operating Officer