Only a few years back lenders were aggressively pursuing Hispanic borrowers to originate loans. Now it is up to servicers to do the very same thing for a very different reason: to clean up the mess.
Spanish-speaking delinquent borrowers are in dire need for assistance.
And at least one provider is bringing back to them the industry focus through a new loss-mitigation service designed to assist lender-servicers with significant numbers of Hispanic borrowers in their books.
Stewart Lender Services, the Houston-based subsidiary of Stewart Title Co., said it is part of the firm’s nationwide effort to cater to the needs of underserved communities. It includes the hiring of
Spanish-speaking mortgage professionals, such as loan counselors and underwriters who will staff Stewart’s loss mitigation call center.
Stewart’s subsidiary, Home Retention Services Inc., offers loss mitigation solicitation, borrower outreach and underwriting services for lenders in both English and Spanish.
Currently 40% of the firm’s staff is proficient in Spanish. And many of these professionals are serving distressed communities in the high delinquency states of Florida, California, Arizona and Nevada.
Stewart said it developed “a specific offering” that targets this demographic in response to industry data showing this group has a disproportionate share of defaulting and foreclosed properties.
For example, according to the Center of Responsible Lending, approximately 8% of Hispanic borrowers who received loans from 2005-2008 have lost their homes to foreclosure. Also, Hispanic borrowers account for an estimated 21% of all owner-occupied loans 60 days or more delinquent.
In addition, Stewart Lender Services findings show that approximately one out of every five borrowers counseled prefers talking to a Spanish-speaking loan counselor.
Services include counseling for the Home Affordable Modification Program, traditional modification programs, short-sale solutions and other workout options.
Jason Nadeau, president of Stewart Lender Services, says his company “recognized early on” during the foreclosure crisis “the importance of being able to connect with Spanish-speaking customers upon their first call,” especially in states with the highest delinquency and foreclosure rates.
He says that in addition to bilingual counselors, a strategy that has proven itself in the marketplace is that of eliminating “the complication of a call transfer.”
Furthermore, providing all documentation, letters and other correspondence in Spanish appears to increase the level of confidence in borrowers making it easier for them to contact their lender or servicer.
In many cases it eliminates the need for the borrower to place a phone call or obtain other assistance in order to understand the requirements of the various loss mitigation programs, he says.
The first most important step, however, is to initiate contact in Spanish.
Executives attribute to direct mail written in Spanish the significant increase they have seen in borrower response during the crisis. Many delinquent borrowers picked up the phone to call only after they received Spanish-language mailings sent by Stewart’s in-house mail center.
Both the recent past and future expectations indicate bilingual centers are cost effective.
Other statistics showing that almost one-quarter of the current U.S. workforce is Hispanic and is expected to soar to 55% of the nation's workforce by 2050 indicate that many more mortgage clients will be Hispanic.
This growth, however, is associated with language barrier problems that affect businesses as much as these Hispanic speakers. Axzo Press—a Rochester, N.Y.-based provider of professional courseware titles, reference materials and custom business and professional development skills solutions—reports that over half of Hispanic workers state they do not speak English very well. It means “there is a huge and growing potential for errors caused by miscommunication or misunderstanding,” Axzo says.
That challenge can easily translate into additional costs both from the employer and the client perspective.
It is the reason why Axzo Press and KAMMS Worldwide, founder of English on the Job materials and learning solutions for the Hispanic workforce, recently started collaborating on bringing “essential workplace skills to the Hispanic audience.” Their new series of learning materials combines relevant workplace topics with essential English skills.
Stacey Kammerman, the CEO of KAMMS Worldwide, says costly language barriers risk mistakes, low productivity and customer service issues especially in the retail and hospitality industries that have a high concentration of Hispanic workers—many of which could turn into prospective mortgage borrowers.