Editor's Note: This feature appeared in the June issue of MReport, out now.
Success, especially in mortgage lending, is cultivated by a challenge. These challenges make us stronger leaders and overall, a better industry. Today, mortgage leaders face the primary challenge of an increasingly diverse homebuyer market. In fact, earlier last year the Pew Research Center announced 10 demographic trends shaping the U.S. and the world. At the top of the list was: “Americans are more racially and ethnically diverse than in the past, and the U.S. is projected to be even more diverse in the coming decades.”
Not only has the landscape changed, but the buyer has changed, forcing the industry to seek better ways to communicate and work with borrowers who are vastly different than before. Unlike in the past, today’s consumer needs to relate and connect with the person they’re working with, especially for such a big, life-event purchase.
To overcome this challenge, and cultivate a successful organization—drive innovation, improve decision-making and better serve the customer—mortgage leaders must embrace diversity, and make it a focus within their organization to better relate to today’s borrowers. They must create a more inclusive workplace through recruiting efforts and do so with a more holistic approach by looking beyond the standards of age, gender, and ethnicity. Lenders now have the unique opportunity to be the leaders in successfully expanding homeownership opportunities to everyone.
1. Look Within
We all know that borrowers are changing. For example, millennials are getting married and starting families, which means they’re forming new households, and single millennials are buying homes at faster rates than previous generations. According to a 2016 report on the State of Hispanic Ownership by the Hispanic Wealth Project, Latinos are also buying homes at a rapid pace and are expected to represent 40 percent of the entire market soon. Another important thing to consider beyond age or ethnicity is that certain borrower segments require unique communication styles; for instance, those in the hearing-impaired community require a lender fluent in American Sign Language.
While these are just a handful of examples, they point to the need for mortgage leaders to incorporate diversity within their teams. Doing so enables them to work responsibly and connect with the communities they serve through authentic, meaningful communication that is relatable as well as comfortable for all borrowers.
The reality is this—borrowers who are not as intimidated are more likely to get further along in the home buying process; obviously, this is good for the business, but, as a whole, it makes the industry much more approachable. Eliminating language and cultural barriers expands the channels of communication and demonstrates a strong commitment to helping others.
Successful leaders know to be responsibly mindful of current borrower dynamics because each one brings a unique mindset to home buying that must be understood and respected. The goal of every successful lender should be to provide superior, consumer-friendly service to everyone as a trusted advisor. By embracing diversity and creating a melting pot within your organization, you can create relationships with first-time homebuyers, a family whose native language is not English, someone nearing retirement and so on.
2. Workforce Reflects Community
Achieving success within mortgage lending goes beyond simply embracing diversity to improve how borrowers relate to us. To facilitate better communication, we must actively recruit diverse mortgage professionals—pulling from all ages, genders, skill sets, and ethnicities. It’s essential to examine the following questions: What are your company’s needs? Does your workforce resemble the communities you operate in? Does your workforce match the demographics you serve or want to serve? If not, develop a hiring strategy to ensure you are meeting these needs. You’d be surprised how something as simple as employing bilingual loan officers can positively impact your business and reputation.
Now, more than ever, mortgage leaders have a unique opportunity to see the world differently and with the perspective of different individuals based on their own unique experiences, thereby allowing them to interact with borrowers in a more impactful and personal way. No longer can we apply a one-size-fits-all approach to appeal to all borrowers. Instead, we must seize opportunities to learn from each other to collectively provide better service.
From there, we must have solid ongoing training and mentoring programs to foster trusted interactions with borrowers continually. Today’s mortgage leaders must evaluate how we are coaching the next generation of leaders. What are the hard-won lessons, both good and bad, that we have learned and can apply to our training? Which of our own experiences can we pass down? What mentorship programs can we provide?
3. Diversity in the Broad Sense
Mortgage leaders must also broaden their idea of what defines “diversity,” and instead take a more holistic approach. Diversity is not driven solely by age, gender or ethnicity; instead, it is driven by all experiences an individual has, and much of that comes from past careers. Recruiting individuals who may have had previous careers outside of mortgage lending can be the key to achieving a well-rounded, diverse workforce.
To build a truly dynamic team, leaders must recruit and leverage the vast knowledge of “career reinventors”—those who have had several different careers throughout their life—and embrace their unique experiences to better relate to borrowers. These ‘reinventors’ may have unique sets of skills applicable to mortgage lending by taking pieces of inspiration and wisdom from past involvements.
With unemployment levels the lowest we’ve seen in the last decade and more individuals looking to buy homes, the mortgage lending market is strong and we’re optimistic it will stay strong. The challenge, however, will be how mortgage leaders adapt to not only a different landscape but a completely different borrower.
As an industry, we must tap into the unique experiences of everyone—whether it be related to their cultural experiences or career changes—and transform those experiences into a meaningful, personalized interaction for borrowers. Lenders must help serve and treat everyone with the same excellent service no matter what; every adjustment, big or small, must be made to ensure borrowers are provided with the best home buying experience. The American Dream of homeownership is still very real and by embracing diversity, we can make that dream equally accessible to everyone. Those who ignore diversity will lose out.
Join the inaugural Diversity and Inclusion Lab at the Five Star Conference on September 18 to learn more about how lenders can reach a diverse set of buyers. To register for the event and learn more about the D&I Lab, click here.