As published in Scotsman Guide's Residential Edition, April 2007.
We've seen the statistics about the U.S. housing gap: 52 percent of minority households own homes versus 76 percent of white households, according to Harvard University's Joint Center for Housing Studies.
Further, household growth is picking up, thanks to immigrant and minority households. Based on current trends, the United States will add 15 million households in the next decade, and 10 million of them will be immigrant or minority households. In fact, immigrants and minorities already make up nearly 40 percent of the U.S. workforce.
Together, these trends make minority and immigrant households the homeownership opportunity of the 21st century.
So now let me tell you something you may not know: Minority markets are no longer "emerging." They have already emerged. They are now the "new mainstream" market.
Brokers, lenders and government-sponsored enterprises (GSEs) are working together to reach out to the new mainstream. They are finding ways to prepare borrowers through financial education and to help more delinquent borrowers avoid foreclosure, among other things. This collaboration helps to foster diversity by leveling the playing field for minority borrowers. Consider the following ways industry players are working together.
Many mortgage brokers and lenders are investing in community outreach. They also are hiring foreign-language professionals and building trust with immigrant communities, which results in increased business.
Freddie Mac offers its lender and broker partners tools for reaching minority borrowers in their own language. It supported the development of a Spanish translation of nonexecutable mortgage documents to better serve Spanish-speaking consumers. It also is conducting homeownership campaigns for Asian Americans in Los Angeles, Chicago and other cities.
In addition, brokers and other originators can take classes that will train them on doing more business in the minority and immigrant communities.
Personal finance is complicated, and buying a home is even more so. That makes financial education critical to preparing more borrowers -- especially new immigrants who may be unfamiliar with the U.S. system -- for the task of building credit and making wise financial decisions. This is the natural prelude to successful homeownership.
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