"We are in the throes of a recession," former Fed Chairman Alan Greenspan said on a CNBC business-news show. The next day, former Treasury Secretary Lawrence Summers said, "It is overwhelmingly likely that the U.S. economy is in recession."
The degree of recessional severity varies by economist: We're either in, near, or far from a recession. With so much varying economic opinion, how is this information being interpreted by the Multicultural real estate and financial professional in the marketplace?
New Trends
Many of the Multicultural professionals have shifted their focus to the foreclosure market. With the foreclosures spiking in recent months, foreclosures have become a new business vertical for many real estate professionals. Many real estate and lending professionals who entered the industry in the last five years have discovered a new frontier.
To get a pulse on the thoughts of Multicultural professionals and the challenges they face, a recent survey was conducted by three U.S. real estate Multicultural trade groups. The survey consisted of members of the National Association of Hispanic Real Estate Professionals (NAHREP), the Asian Real Estate Association of America (AREAA), and the National Association of Real Estate Brokers (NAREB). At issue was a growing concern that, given the current mortgage foreclosure crisis, minorities will face even greater barriers to homeownership.
Key highlights of the survey (which included Multicultural real estate agents, brokers, mortgage professionals, and settlement service providers) revealed the following:
• 55 percent say that 2 out of every 3 customers must be turned down because they owe more than their homes are worth;
• 69 percent say that for every transaction they close, they turn away 2-4 customers that are unable to qualify for a mortgage under declining market guidelines;
• 34 percent believe legislation aimed at modifying existing mortgage loans could be effective in curbing current foreclosures;
• 48 percent favor creating a national foreclosure fund to help distressed borrowers with realistic loan modifications and workouts including the use of soft seconds;
• 65 percent say they know at least five real estate professionals who had to find outside work due to a failed real estate or mortgage-based business;
• 64 percent say these job losses will result in increasing barriers to homeownership for minorities;
The three organizations introduced a five-point plan to address these and other issues related to the challenges in the real estate lending market. One of those points was to increase Multicultural counseling and outreach, and require that lenders provide loss mitigation options in the language that the borrower is most proficient in.
Other surveys found that the GSE's (Fannie Mae and Freddie Mac) and most lending institutions lack the Multicultural training in their loss mitigation departments to help Multicultural customers avoid delinquency
and foreclosure.
Knowing how to communicate with Multicultural customers in their language of choice and accommodating cultural nuances can create value for these organizations.
At the Gonzales Group we provide the Multicultural training support to build strong cultural awareness and profitable connections with the multicultural consumer.
