Options for New Wave of Foreign-Born Homebuyers
Increased demand from foreigners buying residential properties in the United States is catching the attention of some mortgage lenders.
Residential Finance Corp. is offering the “Foreign National Loan Program” designed to meet the special needs of foreign-born buyers.
Data confirm foreign buyer interest in “securing home loans, particularly in coastal areas” keeps growing, says Mark Fowler, chief revenue officer at Residential Finance.
According to the Mortgage Bankers Association “Immigrant Contributions to Housing Demand” report, due to “a steady upswing” over the past three decades the number of foreign-born homeowners in the United States has increased from 800,000 new immigrant homeowners during 1980-1990, to 2.1 million in 1990-2000, reaching 2.4 million in 2000-2010.
Between 2010 and 2020 the MBA projects the number will increase by another 400,000 to 2.8 million.
The new mortgage program compares favorably to those available to domestic borrowers, executives say, because it allows for a loan-to-value ratio of up to 65%, does not charge prepayment penalties and is open to self-employed borrowers.
The program includes both fixed-rate and adjustable-rate mortgage options at a maximum cap of $600,000 for both home purchase loans and refinancing for single-family homes, condominiums, townhouses and second homes.
“The program balances our desire to help potential homeowners with a careful and well-thought-out approach to underwriting,” Fowler said. And due to the unique qualifying features of these loans, “each loan is manually underwritten.”
Earlier this year Wells Fargo started catering to the growing presence of Korean middle-market companies in the U.S. with a new commercial banking unit lead by an experienced Korean-American banker who speaks the language.
The unit is based in in Southern California where many Korean-American businesses are located.
California is South Korea’s ninth-largest trading partner. More than a quarter-million Koreans live in Los Angeles County, with nearly half in the three-mile radius of Koreatown, “making it one of highest-density neighborhoods in the United States,” according to the Korean American Chamber of Commerce of Los Angeles.
Wells selected Sungsoo Han, a 22-year veteran of Hamni Bank and Wilshire State Bank, as the new senior vice president and senior regional director of Wells Fargo’s Korean Division.
The choice was driven by indications that Korean companies are more comfortable doing business with Korean-speaking bankers, Han said. Wells Fargo is investing in local Korean bankers not only because they are fluent in their language, “but more importantly” because they understand both the American and the Korean culture, he said.
The new unit will focus on developing long-term, professional business relationships with both Korean multinational subsidiaries and domestic Korean enterprises.