At a time when diversity and inclusion is receiving increasing attention in businesses across the world, the housing sector is still further behind than the country as a whole. While sustainable homeownership has been one of the main drivers of wealth accumulation, there still remains a socioeconomic inequity when it comes to the mortgage sector.
The onus rests largely on lenders as a community to take the necessary steps to recognize the disparity and work towards creating inclusion. As lenders lead the way in helping dreams come true, they can also lead the way in fostering diversity as well — one that reflects the world we live in today.
Diversity, a reality
The need for this move is imperative now given that the American marketplace is becoming more and more diverse with people of different ethnicities, cultural backgrounds, gender, and age groups soaring to higher ranks at their workplaces and enjoying better lifestyles.
According to the National Association of Minority Mortgage Bankers of America (NAMMBA)over the next five years, 75 percent of all first-time homebuyers will be women, millennials, or people of color. The three largest diverse borrower groups (Asians, African-Americans, and Hispanics) likely generated more than $292 billion of purchase opportunities in 2020, which amounted to 24.2 percent of all purchase dollar opportunities.
These numbers are testimony to the fact that the clientele for the mortgage industry is getting more and more varied, creating an urgent need to embrace diversity. It is upto the lenders to ensure the necessary focus on promoting sustainable homeownership opportunities for one and all and create a positive impact on consumers. Recently, even President Biden made it clear that lenders will be given the task of providing more affordable housing options to underserved communities.
After all, giving a great home buying experience to clients is not just a box to tick as complete, but requires thoughtful discussion, education, and the willingness towards continuous learning.
What lenders need to do to gear up
With that said, as we get into 2022, it’s time that lenders are geared towards the common goal of building a stronger, more inclusive, and diverse industry through necessary steps to serve the underserved communities.
Here are a few measures that can be taken:
- Offering employees and staff with opportunities for open dialogue about diversity, equity, and inclusion as well as additional education and mentoring resources. This will be a key step to creating a holistic environment, catering to both employees as well as to end customers.
- Building partnerships with associations that effect positive change to the housing needs of underserved communities and the development of a more diverse mortgage workforce. For example, organizations like the National Association of Minority Mortgage Bankers of America (NAMMBA) have a strong commitment to diversity and inclusion.
- Focussing on hiring based on competency and skills instead of parameters like color, creed, race, etc. in order to ensure that employees performing the same jobs are paid fairly, regardless of gender, race, and ethnicity.
- Increasing the diversity within the workforce, especially leadership, to better represent the communities in which they serve. Having employees with different ethnicity and cultural backgrounds is a great way to understand the audience better and hence offer custom services for creating intuitive Web/Mobile interfaces and advertisements, identifying brokers and DSA channels.
- Developing communication that promotes mortgage as an inclusive industry. The messaging should not remain limited to employees but should extend to partner companies, vendors, and other aspects of the organizational ecosystem.
- Creating opportunities for lender outreach to diverse communities to provide those communities with information about the mortgage industry. The need is to now create new messages, and in some cases, new messengers, to speak to diverse homebuyers.
- Finally, promoting the fact that every individual in this world has the right to dream of a home and work towards realizing this dream in their lifetime, irrespective of their gender, age, race, sexual orientation, cultural background, and so on. With this in mind, it will be easier to create an enhanced home buying experience for people regardless of where they come from or what their sexual preference is.
To put things into perspective, the mortgage industry is a largely customer-oriented industry where lenders often need to focus on the humane aspect as much as the business aspect. Taking the necessary steps to serve the underserved communities by introducing inclusion and diversity will help prospective homebuyers enjoy complete freedom of home buying irrespective of their cultural or racial background.
Even with all the above-mentioned initiatives on the agenda, change may not happen overnight. Yet, being the frontrunners in fair housing and working directly with home buyers every day, it is up to lenders to be agents of change in communities.