BALTIMORE - With demand for home loans projected to decline this year, lenders are searching for untapped markets.

At the national real estate lending conference of America's Community Bankers, several speakers focused on how to lend to minorities and people with lower incomes.

William A. Donius, a vice president at Pulaski Bank of St. Louis, told how his thrift decided to target this market a couple of years ago. Pulaski had become a passive player in the St. Louis market, and company executives were trying to turn that around.

They stumbled upon a handful of government programs that made it easier to lend to low-income borrowers, Mr. Donius said, and decided to market their willingness to do low-income loans.

Mr. Donius said the strategy has paid off handsomely. Pulaski Bank has been able to differentiate itself from its competitors. It has gained valuable access to real estate agents, who know they can bring their hard- to-do loans to Pulaski's loan officers.

Not only is affordable-housing business up, Mr. Donius said, but overall business also has increased because realty companies are referring larger, more profitable loans to the thrift as well.

Sondra Thiederman, president of Cross-Cultural Communications, San Diego, talked about how to acknowledge and understand cultural differences that can get in the way of doing business with borrowers from other cultures.

Ms. Thiederman spoke of such simple matters as eye contact.

For example, she told the audience, when Asian immigrants avoid looking you in the eye, you might think they are shifty, In fact, she said, they are showing respect.

When some borrowers respond indirectly when asked if they understand the complexities of a mortgage, they probably don't, Ms. Thiederman said. But in their cultures, it would be rude to come right out and say so.

At a lunch talk, Nicolas P. Retsinas, assistant secretary for housing and federal housing commissioner, said the rate of homeownership among minority Americans was far lower than among whites. Whereas 70% of white households own homes, the figure is only 45% for blacks and 43% for Hispanics.

Mr. Retsinas said the administration's plan to push homeownership to record levels by the year 2000 depends on narrowing the homeownership gap between minorities and whites.

With the federal government cutting back, the "heavy lifting" must be done by lenders, Mr. Retsinas said.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.