Executive Conversations is a HousingWire web series that profiles powerful people in the financial industry, highlighting the operations and the people that make this sector tick. In the latest installment, we sit down with Deborah Garcia-Gratacos, founder and president of Deval LLC, to discuss the unique requirements for servicing the Hispanic community.
Q: How big is the potential Hispanic market for mortgage lending and servicing?
A: Hispanics are the fastest-growing segment of the American population, with 55.3 million Hispanics in the United States in 2014. And this is projected to grow to 30% of the population by 2060. But the influence that Hispanics have on housing is even bigger than that number suggests, since they accounted for 69% of the total net growth in homeownership in 2015.
And compared to other groups, there is still plenty of space to expand in this sector, since only 45% of Hispanic households own homes, compared to 72% for non-Hispanic households. That’s why many lenders have developed specific programs to appeal to these borrowers. This is the future for our industry, and those who can understand and serve this market are going to reap the biggest benefits.
Q: What challenges do servicers face in meeting the needs of the Hispanic consumer?
A: There are both language and cultural barriers that servicers need to address to serve the needs of this community.
Unfortunately, a majority of the documentation that gets sent to borrowers is in English, which is likely to get discarded if someone’s dominant language is Spanish. Despite abiding by the letter of federal law, many mandated servicer communications will be completely ineffective if they are produced in English-language versions only.
In addition, when borrowers have questions about their loan, especially if that loan goes into default, they often have no one to call who speaks Spanish. These are significant areas that could devastate Hispanic homeownership, because borrowers will not know if and when terms change, or what remediation is available.
Culturally, servicers often don’t understand the multi-generational aspect of Hispanic households, which differs from the typical non-Hispanic household. There may be multiple points of view and multiple decision makers, so a more involved approach is called for.
Q: When it comes to loss mitigation in particular, what are some of the important steps servicers can take to better serve Hispanic consumers?
A: I think there’s an important pivot that servicers who want to reach this market need to make — it’s not just a matter of having communications here or there that can be transcribed into Spanish. It is a full-on effort to provide bilingual single-points of contact for the Hispanic book of business. Servicers can set up dedicated Hispanic loss mitigation and call center personnel supporting these single points of contact. Lenders can hire underwriters and quality control personnel who are fluent in Spanish.
And online tools need to be converted as well, which means providing a Spanish website portal as well as FAQs addressing hardships with step-by-step action points fully translated in Spanish. Servicers also need to be equipped with a complete library of loss mitigation documentation covering all of the alternatives available under loss mitigation.
Q: How is DEVAL equipped to serve the Hispanic community?
A: As a Hispanic-owned organization we built our business from the ground up with a passion to serve the under-served Hispanic homeowner. We have a team of skilled bilingual underwriters, quality control, customer service, and loss mitigation personnel.
We also maintain a complete catalogue of documents fully translated into Spanish to run parallel with the current version of English legal documents.
These efforts underline the significance we see in this borrower segment, and our commitment to serving them well.