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   ARTICLE   |   From Scotsman Guide Residential Edition   |   March 2006

Know the Nuances of the ‘Underserved’

When marketing to the underserved market, it’s essential for brokers to understand the differences within groups

It seems that everywhere you turn these days, people are marketing to the “underserved market.”

Some believe that the underserved market consists only of low-income, often illegal-status citizens with limited sophistication. This is far from the truth.

The reality is that the underserved market comprises many different groups, such as adults entering the financial market for the first time, recent widows who relied on their husbands’ incomes and immigrants from Spanish-speaking countries and other parts of the world.

One of the largest-growing segments of this market — as well as in our economy — is the Hispanic-American sector. Mortgage brokers who wish to target this market should pay specific attention to some critical issues.

First, it is important to understand that this market is not homogeneous. The culture, customs and level of education vary greatly among the Spanish-speaking countries from which these immigrants come. As such, mortgage professionals who target the Hispanic-American population must understand specific population patterns to determine the best products and options for the market.

Simply offering brochures in Spanish does not display a real commitment to marketing to this segment. It takes much more than translating a document to entice those individuals to do business with you.

Companies must align their products with the particular subsegment they wish to target. Working closely with city, state and federal organizations dedicated to educating segments of the population offers a great benefit to mortgage professionals. They can create a sales force not only with knowledge of conversational Spanish but also with knowledge of the culture and nuances that will help them provide the services clients of various Hispanic cultures will demand.

Another important consideration is whether to target recent or long-term immigrants. While the new-immigrant population is an ever-growing segment, established immigrants comprise 85 percent of this market. As such, unique needs and barriers to homeownership cannot be lumped into one category.

For example, the main barriers for established immigrants with low incomes who came to the United States between 1980 and 2000 are a lack of financial literacy, credit, income, and inability to provide ample down payment. Educating this group on the homebuying process and developing products that diminish these barriers can help these borrowers afford homes.

One reality of dealing with the wealthy Hispanic group, on the other hand, is that many members expect the high level of customer service they were accustomed to in their home country. These individuals are used to being pampered and to having someone walk them through each step of a transaction.

This level of service can be expensive and time–consuming. But it also can be a critical component of achieving customer satisfaction.

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The industry must be flexible in what it views as acceptable and unacceptable documentation when it comes to the Hispanic-American market, as well as the other groups within the underserved market. Keep in mind that these are not your traditional mortgage clients who have a long credit history available. As such, to reach this market, lenders should be far more flexible in what they categorize as acceptable documentation.

Further, this new phenomena will require interdepartmental alignment and will quite possibly cause a culture shock. How will processors and underwriters — the risk decision-makers — accept the information brokers can collect from these individuals?

Selling the product is but one step; being able to close the deal is the most difficult step. It should be clear to all that succeeding in marketing to the underserved market requires a companywide commitment, as well as understanding and willingness to work within this group’s nuances.


 


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