A lot of discussion in mortgage originator circles has been about how the industry can meet the needs of the next generation of customers, a.k.a. millennials.
However, a conversation your editor overheard recently on the New York City subway quickly reminded me that like society as a whole, the millennial generation consists of a diverse group of people.
There were two young women speaking rather loudly. One of them commented they need to teach basic financial skills in high school. Young people need to be taught about paying a mortgage, paying taxes and more, she said.
Based on their conversation, it appeared they were both headed to low to moderate income paying jobs. And while it wasn't clear whether these women had high school diplomas, it wouldn't be a stretch to say there are plenty of others like these young ladies — people who have the potential to be homebuyers if they get the right guidance and handholding from mortgage professionals.
Even among a younger generation that has grown up around technology, millennials use technology differently. For example, there is a gap in mobile technology and Internet usage based on education level, according to a U.S. government study, which found that among mobile phone users age 25 and older, 57% of college graduates said they checked or sent email and 54% browsed the Internet on their mobile phones, compared with 19% and 21% of those without a high school diploma.
Low to moderate income borrowers represents a large opportunity in what is expected to be a tight market. Single-family home loans made to borrowers with incomes less than 80% of the median income in their local area was 26% of the total originations in 2013, recent Home Mortgage Disclosure Act numbers show.
And the low-mod demographic is an even greater segment overall population. More than 30 million of the 78.6 million families in the U.S. in 2011 — about 38% — were classified as low or moderate income, according to the Kansas City Federal Reserve Bank.
While the loan officer of the future needs to prepare to deal with the social media-oriented, highly knowledgeable consumer, they also must have the skills to connect with customers who are less technologically sophisticated.
That is the skill set that many successful current originators already have. They have the ability to listen to the client's story and find some appropriate products to offer to them.
In loan officers' efforts to show they can meet the needs of one set of millennials, they shouldn't forget about the other buyers that can be helped.