Why the language barrier is holding back Hispanic buyers
Every mortgage broker has encountered customers who require additional assistance in understanding mortgage documents.
For some, the process is very easy to understand, but others require extra time to understand what they’re filling out on the front end and what they’re getting in loan estimates and closing disclosures.
These experiences occur even when the customer is reading these documents in their native English. But for those who speak Spanish as a first language, an extra barrier stands between them and understanding the most important financial transaction they will experience.
While some mortgage companies offer documents in Spanish, there are many others that do not. One mortgage broker is shining the spotlight on this issue in hopes that there will be more industry-wide adoption of document translation.
Ashlin Endter (pictured top), founder and mortgage broker at 4MG Mortgage, said that with so many Hispanic buyers forecasted to enter the market soon, companies need to be ready to help them with translated documents.
“In the next five years, Hispanic buyers are going to be 70% of the people who are purchasing homes,” Endter told Mortgage Professional America. “One of the biggest problems we have is that the industry is still very old school, as much as we have AI. Documents are still in English only.”
Overcoming banking stigmas
Endter said that by companies only providing documents in English, they give one more reason for Hispanic buyers to avoid the mortgage process. She said that there are cultural misconceptions about banking in general, and this just throws up one more roadblock.
“Our borrowers already come with a chip on their shoulder,” Endter said. “In our culture, they talk about how credit is bad, how cash is king, how you shouldn't have debt, how buying a home is a scam. Working with a mortgage broker is a scam. Don't trust those people. And then when they come, and they're like, ‘I want to buy a house,’ but then they don't understand that they need to provide us with their private personal information so we can do our job.”
She said that while some companies offer a Spanish-translated application, the loan estimate and closing disclosure arrive in English.
“What happens when I send a loan estimate out that's in English?” she said. “What happens when they need to sign their loan documents? That's in English, and there's only so much that I can explain to someone, and there's only so much that you can run through ChatGPT. But imagine if our documents worked in their language.
“We're asking people for $10,000, $20,000, $30,000, sometimes $100,000 of their money, depending on the home that they're purchasing, but we can't even give them their documents in the language that they speak and read.”
She also noted that one company she spoke with said they had documents in Spanish, but they charge points on the loan to translate them. So Spanish-speaking customers have to pay more than their English counterparts.
“They're like, ‘Yeah, we know our rates are higher, but that's the cost of it for them to be able to read in their language,’” Endter said. “They're like, ‘Yeah, we charge two points almost on every deal.’ And I was like, ‘So what you're telling me is, your way of helping them is by sending them to a lender that does docs in Spanish so that they can charge $20,000 more?’”
Buyers being scammed
Endter is on the board of the Hispanic Organization of Mortgage Experts (HOME), which is working to encourage more companies to use Spanish documents. When those aren’t available, it opens up borrowers to getting scammed during the loan process.
“Just last year, I had a client who got $48,000 stolen from her mom,” she said. “She didn't understand the buying process. She found a house that she loved that had a for sale sign on it. Spoke to the realtor. The realtor also owned a title company. I guess she referred her to work with some loan officer, and they kept just asking her for money. Mind you, nobody sat with her. Nobody educated her on the process.
“Her realtor is in cahoots with everyone that's going on. Three months into the buying process, and she can't get into her home, and she doesn't understand why, and they just keep asking her for money. She drives by the house, and there's a family moving into the house.”
Endter was able to help her recover $40,000 back and get her into a home. But even then, Endter is having to help her through the English documents to get the deal closed.
“Again, we had no Spanish documents,” she said. “She didn't know what she was signing. I'm telling people, ‘Hey, sign here. I know what I'm telling you, everything's okay.’ So we need this. There's a huge need for this, especially since there is a huge number of people who are buying houses and they're Hispanic.
“I think the problem is we need awareness. We need awareness of what's going on. Why are more people not advocating for this? Because if we start with Spanish, how hard is it to translate into all the other languages? That's really what I think we need to be talking about.”
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