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Credit unions could do more to reach Hispanic Americans

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Credit unions should be doing a better job of reaching out to Hispanic Americans for mortgages.

That was the message from a panel during the first day of Inclusiv’s annual conference in Los Angeles.

“It seems there are half-hearted efforts to go after Hispanics,” Daniel Garcia-Velez, senior marketing program manager for MGIC, a private mortgage insurance company in Milwaukee, Wis, said on Monday during the conference. “Credit unions should be asking themselves, ‘How do we engage with this demographic?’ If you are a CDFI credit union and you are at this conference, you obviously believe in engagement.”

About 18% of the U.S. population is Hispanic or Latino, according to 2018 data from the Census Bureau.

Mexican-Americans make up 65% of Hispanics nationwide, primarily in California and Texas, Garcia-Velez said, adding Puerto Ricans make up 10% and Cubans 4%. By 2030, Hispanics will make up 56% of new homeowners, Garcia-Velez said.

“Hispanics want to own a home, so if credit unions are not engaging with this demographic, they are missing out,” he added during the discussion. “Hispanics are the only demographic to raise home ownership rates over the past four years.”

Garcia-Velez said there has been plenty of research that has found Hispanics want to work with a reliable advisor they know and trust – even more so than other ethnic groups. He suggested CUs need to leverage their mission-based platform to build a relationship with Hispanics.

“You need to remove barriers, especially a lack of knowledge [or] education,” he counseled. “Don’t assume consumers know what they need to know.”

As an example, Garcia-Velez said 68% of renters believe saving for a down payment is their biggest barrier to home ownership. They do not realize there are more than 2,500 down payment assistance programs available, with 87% of U.S. homes eligible for homeowner programs.

“By telling consumers down payment assistance programs exist, you will become a trusted advisor,” Garcia-Velez said.

Most down payment assistance programs require the homeowner to go through some sort of financial education or coaching. Garcia-Velez said such borrower education is good because it increases savings, reduces debt, increases credit scores and reduces reliance on payday lenders.

“Marketing is important. Let people know they can put down $2,500 on a $250,000 purchase,” he said.

There are also programs such as grants to help fund the purchase, construction or rehabilitation of a home by those who are low income, Thomas Settino, director of sales for the Federal Home Loan Bank of New York, said during the panel. Credit unions are the fastest-growing part of the Federal Home Loan Bank’s Mortgage Partnership Finance program, due in part to a small number of credit unions participating.

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