Mortgage lender scraps program aimed at Latinos.

In recent years a number of mortgage lenders have made strides in marketing to Latinos, but tapping into the market is proving more complex than many first thought.

Many Latinos prefer to do business with people they know and because they do, the Internet strategies many of the larger lenders have developed are not as effective for that market as they are for the general consumer population.

Even face-to-face strategies may not be the best avenue for the diverse population of Latinos in Southern California, where many Latinos are newly arrived and have not established credit, or even residency in some cases, Metrociti Mortgage Corp., for example, has scrapped a program to market to potential Latino homebuyers by setting up outposts in a local furniture chain after finding that the many of the store's customers were not good loan prospects.

"We had some challenges there," said Virginia Martinez, 1st vice president and district manager for Encino-based Metrociti. "Their typical client base was not ready for home ownership yet."

The difficulty in targeting the Hispanic population is perhaps reflected in the numbers of Latinos that have bought homes.

A study released late in June showed that while the number of homeowners has increased among the Hispanic population, the gap between all minority homeowners and white homeowners has not changed much over a 10-year period.

Slightly more than 47 percent of Hispanics nationwide owned their own homes in 2002, up from 40 percent in 1993, according to the study conducted by the Joint Center of Housing Studies of Harvard University. But the gap remained at about 25 percent during that same period.

The problems, experts say, range from lower income levels to a lack of marketing materials in Spanish and the cultural preferences of more newly arrived Latinos.

When the National Association of Hispanic Real Estate Professionals (NAHREP), a trade group in San Diego, conducted a study on barriers to home ownership among Hispanics, the group was surprised to learn that the biggest obstacle was not money, but a lack of education about the home buying process.

"Even among the top tier, government sponsored (lending) entities, you don't find the type of translation that's necessary," said Ruben Garcia, vice president of business development for the NAHREP.

Retail presence

Metrociti, about two-and one-half years ago, set up outposts complete with computers, Spanish-language marketing materials and Spanish-speaking loan officers in Dearden's a Los Angeles chain of furniture, jewelry and electronics stores that caters to Hispanics.

After about a year, Metrociti scrapped the program in favor of a network of alliances with real estate brokers, builders and accountants the company said are far more effective as marketers for its services. "A large part of the Latino homebuyer market will be influenced by the real estate agent," said Martinez. "The real estate agent will direct them to (companies for) financing."

Metrociti now works with Pinnacle Estate Properties Inc., R.R. Gable and other real estate brokers who, Martinez said are very good at marketing throughout the San Fernando Valley and, in particular, to Latinos.

Other mortgage lenders have also beefed up marketing efforts to Latinos. The largest companies, like Wells Fargo, Countrywide Financial and Bank of America all provide Spanish-language Web sites offering everything from step-by-step discussions of how to buy a home to worksheets that help buyers compute what price home they can afford.

But Internet-savvy consumers of all kinds constitute a smaller percentage of the market for mortgage lenders, and that is especially so for Latinos, experts say.

Perhaps more important, Latinos tend to be more comfortable conducting business face-to-face.

"In the Hispanic community when you sell to a family and make them happy, you're not just selling that one family," said Garcia. "The majority of Latinos tend to go with referrals. It's la familia."