With their ranks and prosperity growing at a rapid clip, Southern California’s Latino population is a natural for mortgage lenders. But with many newer immigrants wary of banking institutions and concerns that the mortgage application process will invite scrutiny concerning their residency status, banks have had difficulty attracting Latino customers. Metrociti Mortgage Corp., an Encino-based firm that claims to be the largest privately-held mortgage lender in Southern California, thinks it has found a way to overcome those obstacles. Late last year, Metrociti formed an alliance with an unusual retailer in a deal that will allow the company to set up retail mortgage lending offices at the stores. Dearden’s, with six locations in Los Angeles including one in Van Nuys, sells furniture, jewelry and electronics in stores that also serve as de facto neighborhood service centers where customers can pay phone bills, send money orders, cash checks and make travel arrangements. Thanks to the range of services available, Dearden’s attracts a loyal following of repeat customers, many of whom are the very Latinos Metrociti hopes to attract. “It seemed a perfect fit because they already had the clientele we want to serve,” said Paul Wylie, president of Metrociti. Although the Mortgage Bankers Association of America has no specific data on the number of home loans made to Latinos, the trade group said lenders have recently begun to seek out these consumers, in part because changes in federal fair lending reporting requirements have increased the number of institutions open to government scrutiny. While Latinos account for about 39 percent of the population of Los Angeles County, 6.9 million people and about $69 billion in annual spending power, according to Spanish language newspaper La Opinion, only about 30,000 of the loans made by the FHA in the county in 1999 were issued to Latino families. “We didn’t see anybody out there that was focusing on the segment, and we also saw a lot of abuse with companies providing loans at extremely high interest rates and for extremely high fees,” said Wylie. Metrociti began its quest to tap this elusive market about two years ago by forming a separate division, MetroAmerica Mortgage, under the direction of Adriana Bassin, an Argentine native whose background includes a stint at Banco Popular. Wylie estimates that since the effort began, Metrociti loans to Latinos have grown to account for about 15 percent of the company’s business. Metrociti makes about 6,000 loans a year, closing in excess of $1.5 billion in volume, Wylie said. The company hopes mortgages to Latinos will grow to represent 25 percent of the business in the next three years. But getting the company’s name out into the community is not enough to draw prospects. The Latino community poses a number of obstacles to marketing efforts besides the typical issues associated with first-time homebuyers. Those from politically-torn South and Central American countries are often distrustful of banking institutions. Others worry that the mortgage application process will invite scrutiny over their residency status. And most new immigrants prefer doing business face to face. “There are some large lenders that have tried (to target the market) but, because they’re so big, the customer gets lost,” said Bassin. “The other thing they miss is, our culture means face-to-face,” Bassin said. Bassin, who was charged with rolling out the program, set up outposts in each Dearden’s store equipped with computers and marketing materials in Spanish. Customers can handle the entire transaction, from getting pre-qualified for a loan to finding a real estate broker to help with their house hunting, at the store. While consumers are free to shop around for the best loan rates available, Metrociti says it provides competitive rates and services not available from most other lenders. The staff of Spanish-speaking loan officers is experienced in dealing with the needs of recent immigrants, who may not have a credit history or even a valid Social Security number. Unlike other banks where there is often an unwillingness to deal with these specialized situations, loan officers for Metrociti navigate through many of these problems, including accommodating a co-signer for loan applicants who need them. The company is even working on a program that will factor in non-resident status to the loan application. While some of the marketing materials are the same as those used in the general market, Bassin said, other aspects of the firm’s marketing is tailored to the Latino community. “I try not to be very sophisticated when I put things in writing,” Bassin said. “I translated the booklet on how to go about finding a property and a lot of the things in English, I didn’t put into Spanish.” For example, a new homebuyers’ brochure with a checklist on what to look for asks consumers to consider whether they want a fireplace and how many bathrooms they want. Latinos typically don’t care whether their home has a fireplace or whether it has more than one bathroom.
