Do You Speak My Language?

By Shannon Hicks

like an odd question for most english-speaking reverse mortgage professionals but reverse mortgages have a broad cross-cultural and international reach. While HECM counseling is the gate prospective borrowers must pass through to qualify for a reverse mortgage, language barriers can close that opportunity for many.

DebtHelper is helping break down these barriers, offering reverse mortgage counseling in Spanish, Portuguese, French and Creole. Beginning with Spanish in 2006, DebtHelper added more languages in 2008. These services are absolutely essential to insure non english-speaking borrowers are making are informed financial decision. In the last decade banks have made a concerted effort to reach underserved borrowers with ads in their language. Yet these efforts often fell short when no translation services were provided for disclosures and counseling. For the Home Equity Conversion Mortgage Program (HECM) to effectively grow we must effectively serve our foreign language speaking prospective borrowers in all aspects.

Confusion in Every Language?
Exploring financial objectives, loan particulars and personal finances requires an in-depth and detailed conversation. Language barriers aside, financial products like reverse mortgages have their own vocabulary where confusion can abound. I experienced this first hand six years ago when I spoke with the Spanish-speaking daughter of a potential borrower on the phone and agreed upon a time for a meeting in her parent’s home. I arrived just after dinner that evening and began my presentation with the daughter translating. Four hours and two cups of coffee later, I was enlightened to the need to match prospective borrowers with loan officers and counselors fluent in their language “We are talking about a huge life changing financial decision here, without the counseling in their own language, the probability of having these homeowners having the perfect understanding of this program is significantly reduced. There are many technical terms that make more sense in one’s own language,” said Claudia Fehribach, Total Quality & HECM Manager at DebtHelper.

Contract law in the United States generally provides that a person who signs a contract without knowing its contents will be bound by the terms and ignorance will not relieve them of their obligation except in cases of fraud or misrepresentation. Federal disclosures, like the Truth in Lending Act (TILA) or the Good Faith Estimate (GFE), are undermined and can be rendered useless with language barriers. Transparency in the lending process requires understanding. That transparency must be matched with advertising, counseling and disclosures in the borrower’s native language.

An Unreached & Untapped Market
After years of declining loan volume due to the housing collapse, reverse mortgage lenders and loan officers are looking for creative ways to gain marketshare. Making inroads with Realtors for HECM purchase transactions and building relationships with financial planners is just the beginning. But are we overlooking an even larger market while focusing on unique applications of the HECM? By the year 2020, the Asian American population is projected to grow by 94% and the Hispanic by 111%. Our industry has a tremendous opportunity to both reach underserved markets while increasing our overall marketshare. When asked about the non-english speaking market Fehribach said, “It’s an almost untouched market. We direct our effort to the Spanish community (which is huge), but we overlook the potential of other communities that could be taking the benefits of a HECM in their senior years.”

To address this growing need DebtHelper has plans to expand counseling services for Vietnamese, Russian and Chinese. According to the agency most Portuguese counseling requests originate from Florida and New York / New Jersey and Massachusetts. In fact a new counseling center was opened in Boston to better serve the Portuguese speaking population.

Coupled with counseling is the need for more foreign speaking reverse mortgage loan officers. These uniquely skilled individuals are well suited in reaching foreign-speaking communities who may have never heard of the reverse mortgage program. Equipped with a cultural understanding and fluency in the language these professionals would begin to serve a motivated and accepting audience.

Reverse mortgages are truly a world product. India, China, Australia and Germany all have similar programs to name a few. More importantly we have several untapped foreign speaking markets within our own borders. Bilingual reverse mortgage professionals have a tremendous opportunity to reach specific markets with little competition. The demographic trends show massive increases in non-english speaking populations, many who are homeowners. Perhaps we will see the emergence of national lenders specializing in specific non-English speaking markets bridging the gap for future borrowers. After all, success requires both identifying and meeting consumer need. Counseling agencies have begun making inroads, now it’s our turn.