One of the top Puerto Rican reverse mortgage lenders announced last week that it is moving into the U.S. and is looking to grow its business by focusing on the Hispanic borrower population in the U.S. Money House executives say the Hispanic market here is underserved, presenting an opportunity.
According to 2010 U.S. Census data, nearly 13% of the U.S. population speaks Spanish, with nearly half of that proportion speaking English less than “very well.”
But lenders in the U.S. say that in many cases they are prepared enough to work with Spanish-speaking borrowers, or that the demand is not there to justify the additional resources. Through all stages of the reverse mortgage process, for example, many lenders and others who assist in the process take some measures to ensure they can work with any borrower they encounter.
“Most all of the servicers do have bilingual staff members to assist borrowers who speak Spanish,” says Ryan LaRose, chief operating officer for reverse mortgage subservicer Celink. “We make sure that we have bilingual staff in each of the various areas of the company, so that we can provide that level of service to those whose first language is not English.”
Additionally, LaRose says, the company is prepared for borrowers who speak other languages as well, although its not often they encounter those borrowers.
“We contract with a third-party provider, Language Line, that can provide interpretation in 100-plus different languages, if the need was ever to arise,” he says. “It’s not common that we have to use that service, but we have it in place just in case.”
Urban Financial Group has shown success in working with several Puerto Rican lenders through its wholesale channel and others say they have made efforts as well.
In some regions, lenders are particularly tuned in to needs of borrowers who speak Spanish primarily, including lenders whose originators work over the phone and may interact with borrowers in many different states.
“AAG caters to the U.S. Hispanic population by retaining specific loan officers in certain states with Spanish as their first language,” says Teague McGrath, director of Marketing for American Advisors Group. “In addition, we are analyzing the market opportunity to this often undervalued demographic. Of course, we are also based in California where we think a lot of growth could occur.”
But actually marketing to customers in Spanish comes with a set of regulations that can come with additional costs, such as providing all documents in Spanish when marketing materials are presented in the language. Some lenders say the marketing is not necessary, although being able to speak Spanish is.
In Texas, where an estimated 34% of the population speaks Spanish, Reverse Mortgage USA sees that offering services in the language is essential and has a loan officer designated for Spanish-speaking customers.
“Here in Texas, this is a big deal,” says John Mitchell, founder and CEO. “It really is a must.”
But whether lenders are seeing demand for reverse mortgages from the hispanic population is another story.
“But here’s an interesting observation,” Mitchell says. “The people that speak only Spanish have not really seemed to be really good candidates for reverse mortgages. Often times viable reverse mortgage candidates can read and speak English but some prefer to deal with a processor and loan officer that speak Spanish.”
It comes down to whether to actually market to the Spanish-speaking borrower or simply work with him or her through the borrowing process.
“The net effect of that is you don’t really have to market in Spanish but you have to be able to accommodate people that prefer to deal with you in Spanish.”
Written by Elizabeth Ecker