Mortgage Lenders Told To Adjust

INDIAN WELLS, Calif. - The mortgage lending industry must change to meet new challenges, specifically the hundreds of thousands of families flocking to the U.S. who have money and have good jobs, but do not speak English and do not understand the American financial system, so they rent when they could buy, according to one expert.

That was the message from Craig Nickerson, vice president of expanding markets and housing and community investment for Freddie Mac.

He said there are many new opportunities available to those in the mortgage industry.

Nickerson said he has seen many developments in his years working in the financial world, but never has witnessed the volume of change as in the past few years.

"There are new products, millions of first-time home buyers, and new opportunities if we can seize them," he said. "Of course, there also are new challenges."

The face of first-time homebuyers is changing, also, Nickerson said. Studies have found members of minority groups will make up two-thirds of household growth between now and the year 2020. "This will change the way we approach the market," he said. "Many of these newer residents are younger, and most will strive to become homeowners any way they can."

To break into these new markets, and to overcome a "gap" caused by fear or lack of trust, Nickerson said CUs should partner with a variety of "trusted intermediaries," including real estate professionals, faith groups, community-based non-profit organizations, and employers. He said Freddie Mac has developed a program known as "Workforce Home Benefit" to allow credit unions access to companies, and therefore be the one to tell their employees homeownership is attainable.

Credit unions are "constructed for loyalty," Nickerson continued, which makes them an excellent fit for these new, prospective homebuyers looking for someone they can trust.

"Outreach and education are vital," he said.