With Hispanics constituting the fastest growing firsttime homeowner group in the U.S.A., the mortgage lending market is warming up to the substantial economic opportunity they represent. In 2005, the Hispanic mortgage lending market was worth $235 billion. By 2010, up to 40% of new buyers will be Hispanic, and a low estimate forecasts 2.2 million new units will be bought by Hispanics in the same period.
“The biggest barrier to first-time home-buying among Hispanics is the lack of informational assistance available to them in Spanish, says Margo Dannemiller, Director of Hispanic Loans for LendingTree.com, the online loan marketplace based in Charlotte, NC. As a result of this knowledge gap, Lending Tree is launching a direct mail educational piece that will seek to de-mystify the home-buying process by explaining the various factors involved. LendingTree's Hispanic ad-agency is Miami-based Black Sheep.
A bilingual piece to accommodate the range of language preferences that may exist within a home.
The launch will take place in two cities, one on the East Coast and one on the West Coast. This initial phase will consist of a single drop of 50,000 pieces in each city.
Dannemiller says that the piece will be front-and-back bilingual to accommodate not just a single household member and his/her language preference, but to accommodate the range of language preferences that may exist within a home: “One spouse may prefer to read in Spanish, while the other might prefer English; or their son/daughter who takes care of their finances might have a language preference, so bilingual is really the way to go here.”
Other mortgage lending companies also take the informative marketing approach. Countrywide Financial has partnered with Telemundo to air educational vignettes once a month on the station's morning show, “Cada Día.” For example, one month the theme might be “The importance of credit.” Viewers will be directed to the show's website, where they will also find a link to Countrywide's site. As Eva May, Managing Director of Español Marketing puts it, “The whole category is one where there is still much educating to be done of the consumer base.”
Breaking away from the abundance of poorly-translated direct mail pieces, Countrywide is using neutral Spanish in their adaptation of English-language documents. According to Ms. May, the company has amassed a list of mortgagerelated terms and phrases that are readily understood among Hispanics from different backgrounds. Countrywide does inhouse direct-mail lists, so they expect their response rates to be higher than the Hispanic average. “for in-house lists, they would typically be targeting current mortgage clients who might be interested in additional services that Countrywide offers, or who might be able to take advantage of refinancing their loans or a home equity product,” says Ms. May.
In terms of future growth in the market, it is cultural sensitivity that will determine who dominates the Hispanic mortgage-lending landscape, according to the Mortgage Bankers Association of America:
“Successful lenders in this space will develop advertising strategies that are sensitive to different groups' cultural experiences and borrowing patterns, and will thoughtfully incorporate these types of understandings into effective overall marketing practices. Many immigrants will be more dependent on loan officers who can speak their language. Cultural sensitivity to these types of differences will be a primary driver of success in these lending markets.”