Congressional Hispanic Caucus Institute Study Reveals How a More Responsive Housing Industry Increased U.S. Hispanic Homeownership; More Gains Needed

WASHINGTON, Sept. 12 /PRNewswire/ -- A new study released today by the Congressional Hispanic Caucus Institute's (CHCI) HOGAR (Spanish word for home) Initiative suggests that a combination of factors that complement Hispanics strong desire for homeownership and strong work ethic, have helped increase the U.S. Hispanic homeownership rate; from 46.1% in September 2003 to 49.7% in March 2005.   

The main recommendations of the study suggest that in order to nudge theHispanic homeownership rate higher, mortgage loan interest rates must remainat historic low levels; Hispanics must continue to make substantial gains inpopulation, education, and income; and the housing industry, in turn, mustaccurately measure the credit worthiness and capacity to save of Hispanics,while allowing for their pooling of incomes and resources."The results of this study are important because it provides acomprehensive view on everything being done that touches upon Latinohomeownership, and presents it as a one-stop shop of findings andrecommendations," said CHCI President and CEO, Esther Aguilera.

The study, which focused on 63 Congressional Districts across the U.S. andPuerto Rico, credited the housing industry with helping more Latinos becomehomeowners through new flexible mortgage loan products, and widerdissemination of information on supplemental financial homeownershipassistance from local and state governments for eligible low- and moderate-income individuals and families. The study also indicated that the mortgageindustry's response of hiring an increasing number of bilingual andculturally-sensitive housing professionals who can gain the trust of thousandsof prospective new Latino homebuyers, has helped increase Hispanichomeownership.

The study, which forecasts that 60% of Latinos will own their homes by theyear 2010, states that Hispanics represent an increasing portion of the agegroup where most home sales occur - 26 to 46 years of age.  Accompanying this demographic change are the income gains made - more Latino families have annual incomes over $40,000, increasing by 80 percent from 1980 to 2000 - three times the rate of the increase of the overall middle class.

 The findings also caution the mortgage industry that more work is neededto achieve a greater rate of Hispanic homeownership by the end of the decade.Three HOGAR fellows who presented the results of the study - AlejandroBecerra, Ron Jauregui, and Rebecca Villalpando, say that the findings indicatethat despite these good-faith efforts by the mortgage industry, the lack ofspecial attention or "hand-holding" reinforce Hispanics' fear and mistrust ofmainstream institutions due to predatory lending practices, pressures topurchase, complex home buying procedures and lack of flexible and quality loanproducts.

"Still at stake is the industry's ability to fully tap its most emergingconsumer market and Hispanics' ability to realize the American dream of owninga home," said HOGAR Fellow Ron Jauregui.

While "hand holding" may not be part of standard institutional practices,the study confirms prior findings that show that a new commitment to helpHispanics better understand the process may be what it takes to get moreLatinos into homes. The fellows also contend that there continues to be a realdisconnect from the real commitment that exists "at the top" to the actualcustomer service many Hispanics in the low-to-moderate income category arereceiving.   

"Many loan officers cannot take the time needed to serve their Latinocustomers and 'hold their hand' through the process," said Alejandro Becerra,HOGAR Fellow. "This is because Latinos tend to apply for smaller loan amounts,take longer to process, and their loans are harder to close, on average."

The study also recommends that because immigrants are expected to make-upa substantial percentage of the 14-16 million minority households by 2010,that there needs to be increased introduction of more flexible underwritingand credit scoring standards.

According to Becerra, "increasing a secondary market that will purchasemortgage loans sold to immigrants with an Individual Tax Identification Numberis recommended to help the industry tap the significant 'new arrival'community."

The study includes the identification of several homeownership strategiesand best practices that will help increase the rate of Hispanic homeownershipnationwide.  More information on the study can be obtained by visiting theCHCI website at http://www.chci.org under the section "Site Highlights."