For Mortgage Industry, Diversity is Not an ‘Option’
WASHINGTON, D.C.–Make no mistake-the mortgage banking customers of tomorrow will be demographically different and younger than the customers of today.
To serve these new customers, the real estate finance industry is changing the way it does business, incorporating a younger, more diverse workforce.
“We’re turning our eyes toward growing our businesses,” said Tamara King, vice president of residential policy ad member engagement with MBA here at the MBA State & Local Workshop. “To do so, we are going to have to diversify.”
MBA projects over the next 10 years, 16 million new households will be created in the U.S., many of which will be minorities. “It’s essential that we view these demographic changes as positives for our industry,” said MBA Chairman-Elect J. David Motley, CMB.
“We need to look at more ways of creating housing opportunities for people of color and other minorities,” said Rep. Pete Aguilar, D-Calif., whip of the Congressional Hispanic Caucus, here at the MBA National Advocacy Conference.
Aguilar acknowledged regulatory issue have plagued the housing industry over the past few years. “We know that you need certainty,” he said. “Regulatory protections are important, but regulatory certainty is just as important.”
Aguilar said providing options for minority home buyers is essential. “In my district, the average house is $100,000 over the FHA loan limit,” he said. “We need FHA to be nimble enough to accommodate the needs of home buyers everywhere.”
Aguilar said lenders need to be prepared to talk about diversity issues, both on Capitol Hill and with their customers. “It’s a questions that will come up–‘how are you addressing diversity?'” he said. “The work you are doing on this is important in moving the debate forward.”
L. Maria Zywiciel, president of NAHREP Consulting Services, a branch of the National Association of Hispanic Real Estate Professionals, said the growing Latino market cannot be ignored. The Latino population now numbers 57 million, with a buying power of $1.4 trillion.
“Latinos represent the largest economic opportunity since the baby boomer generation,” Zywiciel said here at the MBA State & Local Workshop. “You see Latinos becoming the single largest market in California and in many metro areas. In California, the three most common last names in the entire state are ‘Lopez,’ ‘Garcia’ and ‘Hernandez.'”
These hyper-growth markets, Zywiciel said, are in turn driving demand for housing. Latinos represented nearly 40 percent of household formation in 2015. “That’s a huge market growth opportunity,” she said. “This is what is going to fuel homeownership growth and your future business.”
Along with growth in the Millennial market, Zywiciel said, it becomes paramount for mortgage lenders to recruit younger and more diverse employees. “If you have an initiative for Millennials, you have to have in place an initiative for diversity,” she said.
Tony Thompson III, CMB, founder and CEO of the National Association of Minority Mortgage Bankers of America, said his organization came about as he noticed the paucity of diversity among mortgage professionals.
“The industry is going to lose a lot of mortgage professionals who are going to age out over the next 10 years,” Thompson said. “If we don’t replace them with younger, more diverse professionals, we are going to lose a tremendous opportunity.”
NAMMBA held its first conference in April. “Our goal is to attract minority members and serve as a feeder system to your organizations,” Thompson said. “We’re also targeting minorities at the high school level so that when they get to college, they have information about the industry and might consider careers in the mortgage industry.”
Thompson noted few companies are doing it right. “That’s okay,” he said. “It means that the opportunity is there to start doing it now. You need to have a strategy over the next three to five years so that you can tap that market when the need becomes acute.”
King coordinates the MBA Diversity & Inclusion Committee, formed in 2013 to provide leadership and guidance to help the real estate finance industry gain a competitive advantage by increasing diversity in leadership, workforce and suppliers.
MBA encourages its members to support these efforts and to recognize the competitive advantages of embracing a diverse and inclusive workforce and marketplace. For more information about the MBA Diversity and Inclusion Initiative, click https://www.mba.org/who-we-are/mbas-diversity-and-inclusion-initiative/about-mbas-diversity-and-inclusion-initiative.
