The population of multilingual consumers in the United States is steadily increasing, and the mortgage industry has been slow to adapt. To stay competitive and compliant, lenders — whether banks, mortgage companies or credit unions — along with real estate professionals must recognize the growing number of borrowers who prefer to engage in their native language.
This demographic shift presents both a challenge and an opportunity: Lenders and the originators who work with them must evolve their processes and technology to effectively serve a diverse, multilingual borrower base or risk missing out on an expanding segment of potential homebuyers. In a competitive and tightening housing market, ignoring this portion of the borrower pool could be a costly oversight.
Demographic shift
Census data underscores this demographic shift. Today, an estimated 68 million U.S. residents — about one in five — speak a language other than English at home. Among them, approximately 62% are native Spanish speakers, but the linguistic diversity extends far beyond Spanish.
Notably, around 8.2% of the U.S. population has limited English proficiency (LEP), a figure that’s expected to grow to 19% in the coming years. Perhaps even more compelling is that most consumers prefer conducting business in their native language, regardless of their English fluency. For lenders who have not yet adjusted to serve this growing segment, the risk is clear: losing access to nearly a fifth of potential homebuyers, a market share that continues to expand.
Beyond the numbers, this trend is indicative of a broader need in the mortgage industry. Limited English proficiency borrowers, whether first-time homebuyers or repeat customers, often face a frustrating and slow process when applying for a mortgage.
They may encounter language barriers at multiple stages of the process, including when reviewing legally required loan disclosures or attempting to clarify important details. For these borrowers, being able to communicate in their preferred language is not just a convenience — it’s essential for their understanding and engagement throughout a significant financial transaction.
Regulatory pressure
Lenders face not only competitive pressures, but also regulatory ones as demographic changes gain the attention of industry regulators. The Consumer Financial Protection Bureau (CFPB) has increasingly focused on the needs of these borrowers, with the agency reminding mortgage servicers in 2021 of their obligations to assist all borrowers, including those with limited English proficiency. In November 2023, the CFPB took another step forward by releasing its updated Language Access Plan, outlining how it will help consumers with limited English proficiency navigate financial products.
The plan includes translating financial education materials into languages such as Arabic, Haitian Creole, Korean and Vietnamese, alongside Spanish and Chinese. Beyond translation, the CFPB is integrating language access into its supervision and enforcement actions, giving clear signals that financial institutions must step up their efforts in this area. This includes compliance aids designed to help institutions meet the requirements of the Equal Credit Opportunity Act and avoid Unfair, Deceptive, or Abusive Acts or Practices (UDAAP) as outlined by the Dodd-Frank Act.
Failure to comply with evolving language access standards carries significant risks. Recent enforcement actions have seen banks face millions in penalties for not adequately supporting borrowers with limited English proficiency. It’s clear that the CFPB is scrutinizing how well the mortgage industry serves these consumers, and lenders who fall behind are likely to face regulatory consequences.
More broadly, as federal and state regulations continue to develop, the issue of language access is set to become even more critical. Lenders who take proactive steps to meet the needs of borrowers with limited English proficiency today will be far better positioned to navigate any future compliance requirements.
The legal and regulatory landscape also includes other actors beyond the CFPB. State-level regulators and consumer advocacy groups are increasingly vocal about the need for better support of limited-English-proficiency borrowers. As public awareness of this issue grows, lenders will likely face increased scrutiny over how they serve these consumers. To avoid penalties and reputational damage, mortgage lenders must stay ahead of these developments by adopting transparent, scalable and efficient language access solutions.
Operational inefficiencies
Despite growing regulatory pressure and an expanding multilingual population, many lenders are unprepared to meet the needs of borrowers with limited English skills. These consumers are often treated as exceptions, with lenders relying on ad hoc solutions like paper-based processes and limited bilingual staff or translators.
While this approach might work in isolated instances, it cannot scale effectively as the number of these borrowers grow. Lenders who fail to adopt scalable solutions risk operational inefficiencies, higher costs and potential regulatory penalties.
Another common problem occurs when lenders, acting with the best of intentions, prepare materials in languages other than English that contain inadvertent errors or out-of-date information. Although unintentional, this oversight could be considered discriminatory if it leaves these borrowers less informed as their English-speaking counterparts. Moreover, it may result in prolonged mortgage processes and poor borrower experiences, driving potential customers to seek other lenders who are better equipped to meet their needs.
Addressing this operational gap isn’t just a matter of convenience; it’s crucial to building trust and loyalty among consumers with limited English proficiency. Providing clear, accessible information at every stage of the mortgage process ensures that borrowers feel confident in their decision-making. In a competitive industry, borrower trust can often be the differentiating factor that drives repeat business and referrals.
Technology solutions
Adapting to serve a multilingual borrower base need not be daunting. The key lies in leveraging technology to bridge the language gap. Self-service tools and mobile-friendly platforms can empower lenders to deliver a seamless digital mortgage experience for LEP borrowers that mirrors the experience offered to English-speaking clients.
Lenders don’t need to reinvent the wheel here. Many younger borrowers, including those from multilingual backgrounds, are accustomed to using technology for everything, from shopping to banking. Providing a smooth mobile experience is crucial. Native Spanish speakers, in particular, tend to be heavy users of mobile technology and expect the same level of service on their phones as they do on desktops.
Emerging technologies that integrate with mortgage point-of-sale platforms and loan origination systems can automatically deliver educational materials and instructions in borrowers’ native languages. While some documents must legally remain in English, these integrations provide an opportunity for borrowers to access critical information in a language they understand — streamlining communication and reducing friction throughout the mortgage process.
In addition to integrating technology, lenders should consider developing internal best practices for supporting borrowers whose native language is something other than English. This could include regular training for staff on how to handle interactions with these consumers, creating a robust repository of translated materials and offering real-time language assistance. Investing in these areas not only improves borrower satisfaction but also strengthens compliance and operational efficiency.
Competitive advantage
The benefits of embracing support for these borrowers extend beyond regulatory compliance. Offering comprehensive language access tools positions lenders to stand out from the competition. Lenders who make the mortgage process easier for borrowers with limited English proficiency not only grow their potential borrower pool but also demonstrate their commitment to inclusivity and customer service.
Furthermore, investing in these tools today may very well future-proof businesses against upcoming regulatory changes, ensuring lenders are ahead of the curve rather than scrambling to comply. This is not just a compliance issue; it’s a chance to differentiate in an increasingly competitive mortgage market by delivering an exceptional borrower experience for all homebuyers — regardless of the language they speak.
“The U.S. mortgage industry’s ability to adapt to a linguistically diverse borrower base is no longer a‘nice-to-have’ — it’s a must for growth and compliance.”
The U.S. mortgage industry’s ability to adapt to a linguistically diverse borrower base is no longer a “nice-to-have” — it’s a must for growth and compliance. By adopting digital tools, improving mobile accessibility, and offering robust multilingual resources, lenders can capture a growing segment of the market while staying ahead of evolving regulations.
Lenders who prioritize these changes will see the benefits: greater borrower satisfaction, increased retention and a significant reduction in regulatory risk. As the housing market continues to diversify, preparing for a multilingual future will ensure long-term success and a more inclusive approach to homeownership.
