Easing the Way for Latinos to Buy Homes
Times Staff Writer
The word escrow doesn't exist in Latin America. Neither do real estate agents.
So for Latino immigrants like Julio Arroyo, navigating California's complicated real estate market can be unendingly frustrating.
Arroyo, along with his sister and her husband, are looking for a three-bedroom, two-bath home, preferably with a guest house, in Pasadena or the San Fernando Valley. It's taken six months and two agents, and the three still haven't found anything that fits their $225,000 price range.
"They fired their other Realtor and canceled escrow after that Realtor bullied them into it," said Michael Baietti, an agent with Jim Dickson Realtors in Pasadena. "Some of that resulted from a language barrier; they never would have signed that document had they been sufficiently proficient in English."
Baietti, who speaks fluent Spanish, conducts business with Arroyo and Olga and Marcos Zegarra in their native tongue, and uses documents translated into Spanish by his firm. Arroyo and his sister are from Guatemala; Marcos Zegarra is from Peru.
The agent participates in a program designed by Jim Dickson Realtors for Latino home buyers. The 6-month-old effort is part of a growing push by real estate agents, lenders and others in the real estate industry to help Latinos become homeowners.
It's not just because it's the right thing to do. Targeting Latino home buyers is good business. Latinos are expected to make up half of California's population by 2020--making them the fastest-growing segment of the state's housing market.
Latino immigrants from 25 to 34 years old made up about 27% of new entrants to California's housing market in 2000, compared to non-Latino whites and American Indians, who represented only 8% of new entrants, according to a report by John Pitkin, president of Analysis & Forecasting Inc., a Cambridge, Mass.-based research firm.
That's not all. Immigrant home buyers in this age group--the peak age for first-time home buyers--will start to decline in the next 20 years, and American-born Latinos and other ethnic groups will begin to take their place, Pitkin said.
"The opportunity that's out there is tremendous," said Gary Acosta, chief executive of the National Assn. of Hispanic Real Estate Professionals. "The Hispanic community in this country and the proliferation of it in terms of numbers and buying power is like nothing we've seen since the baby boomer generation."
Latinos must not only navigate a home-buying process that confounds many who grew up here, but cope with discrimination and a mounting shortage of affordable housing.
Only 35% of Latinos in Southern California own their own homes--about half the homeownership rate here for whites. Nationally, about 46% of Latinos own a home, compared with 71% of whites, according to a third-quarter 2000 homeownership survey conducted by the Census Bureau.
Groups such as the National Assn. of Hispanic Real Estate Professionals, or NAHREP, a year-old trade group, are introducing programs with the goal of increasing homeownership rates for Latinos.
These new programs are designed to overcome barriers to homeownership that confront immigrant home buyers. The leading barrier for Latinos is lack of education about the home-buying process, according to a survey of the San Diego-based association's 5,000 members. About 80% of Latinos are first-time home buyers, said Acosta, the association's chief executive.
To counteract this trend, the association is working to establish a Spanish-language glossary of real estate terms. The lack of a standard glossary has kept many real estate professionals from aggressively translating materials into Spanish, Acosta said.
This is important because at least 50% of Latino home buyers prefer to conduct negotiations in Spanish, he added. The association expects to release the glossary--which will be upward of 75 pages--sometime this spring.
Other organizations are also making homeownership education and financing opportunities for Latinos a priority.
The California Assn. of Realtors is summarizing the state's residential purchase agreement in Spanish, Chinese and Korean. It also created an ambassador program last year that encourages real estate agents to partner with minority groups, said Toby Bradley, CAR's treasurer.
Freddie Mac and the National Hispanic Housing Council announced a $40-million program last spring that will help nonprofits build housing for Latinos in five states, including California. The program will help Latinos obtain affordable rehabilitation mortgage financing.
Freddie Mac is also helping NAHREP develop courses for real estate agents to be delivered on the association's Web site at RealEstateEspanol.com.
Last fall, Countrywide Home Loans announced a Spanish-language version of its first-time home-buyer site at Firsttimebuyer.countrywide.com. The site provides a toll-free number at (888) SU-CASA5 that connects consumers with Spanish-speaking loan experts.
The Calabasas-based lender was one of the first organizations to reach out to Latinos by opening offices in minority communities, hiring a Spanish-speaking staff in many branch offices, and partnering with Spanish-language radio, TV and newspapers.
The Mortgage Bankers Assn. of America and the National Council on Economic Education announced a pilot home-buyer education program last fall that targets adults and students in Alabama, California, Illinois, Massachusetts, Virginia and the District of Columbia.
The program will be conducted by state mortgage bankers' associations and will be offered in Spanish. It will focus on abusive lending practices and knowledge needed for homeownership.
This recent spate of home-buyer programs for Latinos is the second time the real estate industry has made a concerted effort to reach out to this group. The first push by lenders and others to attract Latino home buyers occurred in the late 1990s.
This earlier effort made some inroads.
Bank of America credits an initiative that allows zero down payment, together with a program that allows use of utility and rent payments instead of a credit history, with doubling the number of loans it made to Latinos in Southern California in the last two years.
Fannie Mae dropped a requirement that home buyers have a two-year work history to qualify for a mortgage because immigrants "piece together a panoply of jobs," said Barbara Zeidman, director of Fannie Mae's Los Angeles partnership office.
This effort and others helped the mortgage-financing giant increase the number of loans it purchases from Latino households in the Los Angeles area from 25% to 33% of the total number of loans made to minority households, Zeidman said.
And Pasadena real estate agent Baietti said Dickson's program has saved his clients money.
"I've had clients tell me they would have lost money were it not for the assistance I was providing," he said.
But housing advocates say these programs haven't gone far enough in bridging the gap between wages and spiraling median home prices that stymie Southern California home buyers at many levels.
A report expected this month from the Greenlining Institute, a San Francisco-based public advocacy group, shows only 10% of conventional home loans issued in California in 1999 went to Latinos, said Robert Gnaizda, the institute's policy director.
"The crisis is more now than a racial one. It doesn't matter if institutions have no discrimination policies or no down-payment requirements," Gnaizda said. "They don't have [the] impact they would have in Nevada, or in Nebraska, relative to population percentages. More Latinos own homes throughout the Midwest than they do in California."
Programs targeting immigrant home buyers also may not guarantee that greater numbers of Latinos will become homeowners because this group approaches homeownership differently.
"In Los Angeles County, Hispanics as a group less frequently use forms of support for home buyers than do other ethnic groups," said Fannie Mae's Zeidman.
This isn't news to those in the Jim Dickson Realtor's bilingual homeowners program. The group of six bilingual agents, one bilingual escrow officer and one bilingual lender has translated documents and recruited bilingual title companies, termite inspectors, appraisers and others.
But the six-month effort has yet to attract a large number of Latino home buyers, said Diane Hardie, director of business development at Jim Dickson. She said the company plans a marketing push this spring to promote the program.
"Our phones are really not ringing that much yet," Hardie said. "These programs don't happen overnight. It's one thing to develop them, and another thing to actually put them in the community."
* * * Target Market
Latinos, the fastest growing ethnic group in California, are becomingincreasingly affluent and are expected to make up a larger share ofCalifornia's housing market in the next 20 years.The percentage of Latinos living in California is growing faster thanany other group and is expected to buy homes at an increasing rate.
* * * New entrants to the housing market among native born, ages 25-34, inlatest reporting year
* * * Latino surnames make up 60% of the list of top home buyers in 2000.
* * * Source: Analysis & Forecasting, DataQuick, USC California HousingFutures
So for Latino immigrants like Julio Arroyo, navigating California's complicated real estate market can be unendingly frustrating.
Arroyo, along with his sister and her husband, are looking for a three-bedroom, two-bath home, preferably with a guest house, in Pasadena or the San Fernando Valley. It's taken six months and two agents, and the three still haven't found anything that fits their $225,000 price range.
"They fired their other Realtor and canceled escrow after that Realtor bullied them into it," said Michael Baietti, an agent with Jim Dickson Realtors in Pasadena. "Some of that resulted from a language barrier; they never would have signed that document had they been sufficiently proficient in English."
Baietti, who speaks fluent Spanish, conducts business with Arroyo and Olga and Marcos Zegarra in their native tongue, and uses documents translated into Spanish by his firm. Arroyo and his sister are from Guatemala; Marcos Zegarra is from Peru.
The agent participates in a program designed by Jim Dickson Realtors for Latino home buyers. The 6-month-old effort is part of a growing push by real estate agents, lenders and others in the real estate industry to help Latinos become homeowners.
It's not just because it's the right thing to do. Targeting Latino home buyers is good business. Latinos are expected to make up half of California's population by 2020--making them the fastest-growing segment of the state's housing market.
Latino immigrants from 25 to 34 years old made up about 27% of new entrants to California's housing market in 2000, compared to non-Latino whites and American Indians, who represented only 8% of new entrants, according to a report by John Pitkin, president of Analysis & Forecasting Inc., a Cambridge, Mass.-based research firm.
That's not all. Immigrant home buyers in this age group--the peak age for first-time home buyers--will start to decline in the next 20 years, and American-born Latinos and other ethnic groups will begin to take their place, Pitkin said.
"The opportunity that's out there is tremendous," said Gary Acosta, chief executive of the National Assn. of Hispanic Real Estate Professionals. "The Hispanic community in this country and the proliferation of it in terms of numbers and buying power is like nothing we've seen since the baby boomer generation."
Latinos must not only navigate a home-buying process that confounds many who grew up here, but cope with discrimination and a mounting shortage of affordable housing.
Only 35% of Latinos in Southern California own their own homes--about half the homeownership rate here for whites. Nationally, about 46% of Latinos own a home, compared with 71% of whites, according to a third-quarter 2000 homeownership survey conducted by the Census Bureau.
Groups such as the National Assn. of Hispanic Real Estate Professionals, or NAHREP, a year-old trade group, are introducing programs with the goal of increasing homeownership rates for Latinos.
These new programs are designed to overcome barriers to homeownership that confront immigrant home buyers. The leading barrier for Latinos is lack of education about the home-buying process, according to a survey of the San Diego-based association's 5,000 members. About 80% of Latinos are first-time home buyers, said Acosta, the association's chief executive.
To counteract this trend, the association is working to establish a Spanish-language glossary of real estate terms. The lack of a standard glossary has kept many real estate professionals from aggressively translating materials into Spanish, Acosta said.
This is important because at least 50% of Latino home buyers prefer to conduct negotiations in Spanish, he added. The association expects to release the glossary--which will be upward of 75 pages--sometime this spring.
Other organizations are also making homeownership education and financing opportunities for Latinos a priority.
The California Assn. of Realtors is summarizing the state's residential purchase agreement in Spanish, Chinese and Korean. It also created an ambassador program last year that encourages real estate agents to partner with minority groups, said Toby Bradley, CAR's treasurer.
Freddie Mac and the National Hispanic Housing Council announced a $40-million program last spring that will help nonprofits build housing for Latinos in five states, including California. The program will help Latinos obtain affordable rehabilitation mortgage financing.
Freddie Mac is also helping NAHREP develop courses for real estate agents to be delivered on the association's Web site at RealEstateEspanol.com.
Last fall, Countrywide Home Loans announced a Spanish-language version of its first-time home-buyer site at Firsttimebuyer.countrywide.com. The site provides a toll-free number at (888) SU-CASA5 that connects consumers with Spanish-speaking loan experts.
The Calabasas-based lender was one of the first organizations to reach out to Latinos by opening offices in minority communities, hiring a Spanish-speaking staff in many branch offices, and partnering with Spanish-language radio, TV and newspapers.
The Mortgage Bankers Assn. of America and the National Council on Economic Education announced a pilot home-buyer education program last fall that targets adults and students in Alabama, California, Illinois, Massachusetts, Virginia and the District of Columbia.
The program will be conducted by state mortgage bankers' associations and will be offered in Spanish. It will focus on abusive lending practices and knowledge needed for homeownership.
This recent spate of home-buyer programs for Latinos is the second time the real estate industry has made a concerted effort to reach out to this group. The first push by lenders and others to attract Latino home buyers occurred in the late 1990s.
This earlier effort made some inroads.
Bank of America credits an initiative that allows zero down payment, together with a program that allows use of utility and rent payments instead of a credit history, with doubling the number of loans it made to Latinos in Southern California in the last two years.
Fannie Mae dropped a requirement that home buyers have a two-year work history to qualify for a mortgage because immigrants "piece together a panoply of jobs," said Barbara Zeidman, director of Fannie Mae's Los Angeles partnership office.
This effort and others helped the mortgage-financing giant increase the number of loans it purchases from Latino households in the Los Angeles area from 25% to 33% of the total number of loans made to minority households, Zeidman said.
And Pasadena real estate agent Baietti said Dickson's program has saved his clients money.
"I've had clients tell me they would have lost money were it not for the assistance I was providing," he said.
But housing advocates say these programs haven't gone far enough in bridging the gap between wages and spiraling median home prices that stymie Southern California home buyers at many levels.
A report expected this month from the Greenlining Institute, a San Francisco-based public advocacy group, shows only 10% of conventional home loans issued in California in 1999 went to Latinos, said Robert Gnaizda, the institute's policy director.
"The crisis is more now than a racial one. It doesn't matter if institutions have no discrimination policies or no down-payment requirements," Gnaizda said. "They don't have [the] impact they would have in Nevada, or in Nebraska, relative to population percentages. More Latinos own homes throughout the Midwest than they do in California."
Programs targeting immigrant home buyers also may not guarantee that greater numbers of Latinos will become homeowners because this group approaches homeownership differently.
"In Los Angeles County, Hispanics as a group less frequently use forms of support for home buyers than do other ethnic groups," said Fannie Mae's Zeidman.
This isn't news to those in the Jim Dickson Realtor's bilingual homeowners program. The group of six bilingual agents, one bilingual escrow officer and one bilingual lender has translated documents and recruited bilingual title companies, termite inspectors, appraisers and others.
But the six-month effort has yet to attract a large number of Latino home buyers, said Diane Hardie, director of business development at Jim Dickson. She said the company plans a marketing push this spring to promote the program.
"Our phones are really not ringing that much yet," Hardie said. "These programs don't happen overnight. It's one thing to develop them, and another thing to actually put them in the community."
Latinos, the fastest growing ethnic group in California, are becomingincreasingly affluent and are expected to make up a larger share ofCalifornia's housing market in the next 20 years.The percentage of Latinos living in California is growing faster thanany other group and is expected to buy homes at an increasing rate.
2000 2020Non-Latino white 50% 40%Latino 31% 39%Asian, Pacific Islander 12% 14%Black 7% 6%American Indian 1% 1%
