Banks in Search of Emerging-Market Specialists
With volume falling in the traditional mortgage market, bankers are seeking employees who can connect them to the newest segment of the market -- consumers who pay as they go with cash, which means they have no credit history.
Credit analytics firm Fair Isaac estimates 50 million Americans lack the traditional credit history needed to qualify for a mortgage, even though they pay their rent, utilities and other bills on time. That's a big market of potential homebuyers, and some of the largest names in mortgage lending, including ABN AMRO Mortgage Group, plan to tap it in the coming years.
The so-called "thin-file" credit market includes Mexican, South American and East European immigrants, as well as older folks who haven't used credit in years and young adults just starting out, says Lisa Nelson, vice president of Fair Isaac Credit Services in Minneapolis. Lenders often refer to these customers as "unbanked," because they have no bank accounts.
To lend in this market, mortgage companies need loan officers with the patience to help consumers prove their cash-payment track records as well as underwriters who can underwrite mortgages manually, since today's automated loan-underwriting systems rely upon traditional credit scores.
Is Working with the Unbanked for You?
To succeed in this space, a loan officer must be conscientious about helping first-time mortgage borrowers make good decisions, says Fran Clemens, senior vice president of emerging markets for ABN AMRO. "The refinance rock stars who dropped in [during the mortgage refinance boom] and made a bundle of money are not going to want to invest the time that's necessary to help a borrower with no credit who may or may not speak English," she says.
And, since many in the unbanked market are Hispanic/Latino, the ability to speak fluent Spanish will help you get on the hiring short list.
Where and What Is the Market?
The 1.8 million Hispanics/Latinos in the Chicago area are the target market of AztecAmerica Bank, which opened in August 2005 and was created to meet the financial needs of Hispanic/Latino customers. Its mortgage department is open evenings to serve working-class borrowers who can't take time off during business hours. A large-screen television showing Spanish-language programming and a play area for kids were added with Hispanic/Latino families in mind.
In Arizona, Desert Schools Federal Credit Union hired intern Amanda Smith, a Hispanic/Latino-American Arizona State University student, to conduct homebuying seminars and perform community outreach to area Hispanics/Latinos. Smith was recruited through a joint initiative between Fannie Mae and Latinos on Fast Track, a collaboration between the Hispanic Heritage Foundation and the Hispanic College Fund. The goal of the internship program is to develop a diverse group of mortgage professionals who can better serve the needs of minority homebuyers.
And Banco Popular North America, the largest Hispanic/Latino-owned bank in the United States, and Mortgage Guaranty Insurance Corp., the nation's largest private mortgage insurer, has added programs aimed at immigrants with ITINs -- identification numbers issued by the Internal Revenue Service to immigrants who don't qualify for Social Security numbers.
Targeting the growing Hispanic/Latino market, as well as consumers without established credit records, could provide a steady stream of future business to a loan originator. The mortgage business is cyclical, with refinances and crazy loan programs like interest-only loans coming and going. But purchase-money borrowers will always be in the market, even when interest rates rise and underwriting standards get tougher.