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Residential Department: Q&A: Tino Diaz, National Association of Hispanic Real Estate Professionals: October 2009

 

Q&A: Tino Diaz, National Association of Hispanic Real Estate Professionals

Tino Diaz, Chairman and President, National Association of Hispanic Real Estate Professionals

Having recently celebrated its 10th anniversary, the 15,000-member National Association of Hispanic Real Estate Professionals (NAHREP) holds its annual marketing conference for all types of real estate pros this month in Las Vegas. NAHREP Chairman and President Tino Diaz discusses the Hispanic community and its importance to mortgage brokers and the country's financial future.

How has NAHREP reacted to the downturn of the past two years? Our mission remains ever the same and just as necessary. The need to make sure that we sustainably increase the rate of Hispanic homeownership is critical not just to Hispanics but also to all Americans. Many long-time participants in the mortgage business took for granted that housing people meant housing them sustainably. Greed gave way to practices that were transaction-based as opposed to based on building a community.

According to the Pew Hispanic Center, Hispanics will account for most of the U.S. population growth between now and 2050, when they will comprise 29 percent of the populace. What does this mean for the mortgage industry? Today's Hispanic population is exactly the same kind of population we had right after World War II — a very young population. The baby boomers are the ones who created U.S. expansion and growth in wealth. This is their replacement. It really makes good business sense to help Hispanics and other minority groups make their homes safely and successfully. If we don't, this nation can't expect to have greater wealth or a better future. Wealth creation happens through homeownership — period.

According to some surveys, minority borrowers, including Hispanics, were targeted for subprime lending. What's NAHREP's take on this? Is there targeting? Yes. But I'll tell you, there are factors in there, such as Hispanic borrowers not fitting the U.S. home-lending tradition. For example, many Hispanics don't establish credit because they believe in buying things with cash.

How can the lending industry adjust to that? Alternative credit scores are absolutely critical. We have eliminated the traditional underwriter's authority to make lending decisions based on character with this thing called the credit score. Some of the alternative credit scores being developed use excellent approaches. Assessing borrowers accurately is not an easy problem, but it's one that can be solved with different and better tools. So we are very much behind alternative credit scores being brought into the system.

What challenges face the introduction of new lending tools and methods? A delicate balance needs to be struck. We want to protect consumers at the same time we make sure there's a healthy amount of free-market capitalist creativity going on. Now is a time when we need experimentation — safe experimentation — to help people get into homes sustainably.

How can brokers balance initiatives to increase Hispanic homeownership sustainably with increased scrutiny on borrower qualifications? It’s about implementing a systematic and conscientious effort to educate borrowers; painting a clear picture of how homeownership is within their grasp; educating them on their options; and helping them build a credit-worthy profile and a budget that incorporates all the aspects of homeownership in their lifestyle.


 

Darrick Meneken was an associate editor at Scotsman Guide. For questions on this article, call (800)297-6061 or e-mail articles@scotsmanguide.com.

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