Magazine article Mortgage Banking

In Other Words: Lenders Are Finding Ways to Tear Down the Language Barrier That Deters Hispanics from Becoming Homeowners

Magazine article Mortgage Banking

In Other Words: Lenders Are Finding Ways to Tear Down the Language Barrier That Deters Hispanics from Becoming Homeowners

Article excerpt

How are major lenders targeting the growing Hispanic segment of the mortgage market? Most agree on the importance of low down-payment plans and community involvement. But are their Spanish-language services up to snuff?

The Hispanic market has become hard to ignore in the housing market. There are 27 million Hispanics in the United States, of whom only 25 percent use checking accounts and only 11 percent as yet have home loans. They're one of the fastest-growing groups in the country. And in one part of the nation - Los Angeles County - they're by far the fastest-growing group of homebuyers, according to recent figures of Dataquick Information Systems, La Jolla, California.

"Financial institutions are beginning to recognize the need to market their products and services to Latinos aggressively," says Jesse Wilson, executive vice president of San Jose and Associates, Chicago, a marketing and public relations firm. "Since only 37 percent of Latino adults in the U.S. are homeowners as yet, lenders can't afford to ignore this huge opportunity."

Spanish-language marketing communications and services should be part of any aggressive campaign aimed at Hispanics. The most common component of these campaigns appears to be Spanish-language advertising. Frequently, lenders will even hire Hispanics as loan officers and provide Spanish-language brochures. However, a study conducted between 1992 to 1995 indicated that these Spanish-language marketing communications and services are more effective when coordinated through a language plan. Otherwise, the company risks wasting its advertising money or, even worse, offending Spanish-speaking customers.

"Banks and mortgage lenders need to support their Spanish-language advertising efforts at the branch level, or they will drive Latino customers who are heavy word-of-mouth communicators - away," says Ellen Touchstone, adjunct professor of marketing at California State University-Long Beach and president of Touchstone Language Management, a language-planning consulting firm. Touchstone recently completed a three-year study of Southern California banks' and mortgage lenders' minority language services and discovered that, while banks and lenders may be experts at financial planning, they have not yet realized the importance of planning their language resources.

What Is language planning?

While most think of language planning in terms of bilingual education, Touchstone has recently expanded the field of language planning into the business arena. "Most business language planning is extremely haphazard, with headquarters handling non-English advertising, and the retail unit having the choice of providing or not providing all of the support materials and personnel for servicing other-language speakers," she says. "Several times, I visited retail units of the same mortgage lender and found that they had drastically different Spanish-language marketing and servicing capabilities [e.g. Spanish-speaking loan officers, Spanish-translated brochures, and signs in Spanish!, even though they were located in the same community." Here are some examples of the problems caused by poorly coordinated language planning.

* Bilingual loan officers. "Just because an employee speaks Spanish doesn't mean he or she speaks Spanish well enough to conduct business in it," says Touchstone. "Because of the level of education needed for loan officers, those hired are often second- or third-generation Latinos who have lost most of their Spanish, which, according to the 1990 Census, is very common among children or grandchildren of immigrants."

These Latinos probably use English in most areas of their lives and therefore may have only a limited Spanish vocabulary. Touchstone found that most financial institutions do not test their Latino hires' Spanish ability, simply assuming that a Hispanic surname guarantees Spanish proficiency.

This oversight can lead to serious problems in the retail unit. …

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