Latino homebuyers are most likely to use risky financing, survey finds

Latino homebuyers are most likely to use risky¹ financing, survey finds

Transcript²

More than a third of the Latino households surveyed by the Pew Research Center said they'd used something other than a traditional mortgage. Alternative financing can come with high costs and risks.

A MART?NEZ, HOST:

Last year, about half of Latino households in the U.S. were homeowners. And according to the Urban Institute, this group could make up 70% of new homeowners over the next two decades. But new findings suggest Latinos are more likely than any other ethnic³ group to use risky home financing. More than a third of those households surveyed by the Pew Research Center said they tapped something other than a traditional mortgage to purchase a house. And that alternative financing can come with steep costs and also high risks. Joining us to discuss what this could mean for U.S. homeownership long term is Lot Diaz. He's vice⁴ president of Housing and Financial Empowerment with the Latino advocacy group UnidosUS. Lot, welcome to the show.

LOT DIAZ: Thank you.

MART?NEZ: All right. Now, when most Americans buy a house, they take out a traditional 30-year mortgage. But there's a whole world of alternative financial products out there. Some have some pretty significant risks. Lot, tell us about how these products work and what they are.

DIAZ: People get into these products for two reasons. One, they're not aware there's other options. A typical family gets an FHA or conventional mortgage that is priced at appropriate levels. Families need to know how to apply for those, get into those. Many times, they're sold for products that are not these types. They're higher cost. So that's the - one reason. And the second reason - they have not protected their credit. And so when they start to apply for a conventional or FHA loan, they can't beat the filters, and they get denied. They seek other avenues. And there's plenty of marketing⁵ for these alternative products that are more costly⁶ and can present a risk over time to a family to maintain their home.

MART?NEZ: When it comes to just simply qualifying for a loan to purchase a home, when it comes to that, are Latinos maybe behind the eight ball a bit? Are they not getting approved as much?

DIAZ: The data seems to indicate that's the case. What we've seen within our partners in the market is that they tend to get declined (ph) at a greater rate. And many times, it's really because they don't fully⁷ understand or respond to the lender in a way that the lender's expecting, or they're asking for documentation and other items that are required that is difficult for them to get because their income is not maybe a strict salary. It could be a small business. There could be two or three income sources that they're drawing from, and that just doesn't conform to a typical mortgage origination system.

MART?NEZ: Yeah. According to the National Association of Hispanic Real Estate Professionals, Latinos are 81% more likely to be denied than non-Latino counterparts. I mean, so considering that Americans really derive⁸ most of their wealth from real estate - typically the homes that they own - what does this mean when so many of the country's would-be homeowners, aspiring⁹ homeowners, can't access traditional mortgages?

DIAZ: Well, if you've seen the dialogue in more recent periods around the wealth discrepancies¹⁰ between communities of color and the white population, homeownership has always been the driver of families' wealth for all races and ethnicities. So if Latinos are shut out or discouraged from becoming homeowners, that has a huge impact on the collective family wealth in the community. So the biggest thing - and wealth is - what does wealth do for you? It gives you the ability to borrow at affordable¹¹ rates. It allows you to make money available for college, for health emergencies, for a lot of other things that many families just take for granted.

MART?NEZ: Yeah. And when you see gentrification happening in areas where there are - typically, Latinos have been living there for decades, for generations. And if their ownership and their wealth is not tied to the real estate, especially the place that they live in, that's when these neighborhoods all of a sudden change drastically.

DIAZ: That's absolutely true. And there's just a gazillion examples of that across the country. There's two things that happen. Pricing is driven up by a variety of factors. And if families are not owning and renting, what goes up - when real estate price goes up, rents go up, and they are forced out of the neighborhood. Ownership is the only thing that can protect them in these kinds of situations.

MART?NEZ: And this country, just in general, is also in the grips of a national housing shortage. How is that affecting Latino homebuyers in particular?

DIAZ: If you talk to anybody in real estate, they always say a lack of inventory¹² is a big problem because - why? - it increased prices and makes it harder for families, particularly families buying their first home, to enter the market and start the process of homeownership.

Interesting thing - foreclosure crisis happened. Over 10 million families lost their home during that crisis. A majority of those homes were bought by investors¹³. And then when they went back into the market, they became a home to rent rather than a home to own. So that shrunk the market. The pandemic and other factors have made the things that you need to build homes more expensive. And it's resulted on the moderate income-priced home that gets shut out. The higher-end homes still get built because people with more wealth can buy those homes. So it's the moderate income-priced home that's been kind of impacted a lot by the increased cost.

And then the federal government has not increased its investment in housing, even though the population has grown substantially over time.

MART?NEZ: And you mentioned starter homes, those homes that are or used to be affordable for young families - because that's how it used to work. A young family would be able to look for a starter home, and then as their family grew, along with their savings¹⁴ and their wealth, they could look for a bigger house to meet their growing family's needs. And many experts now think that, really, starter homes are not realistic for anyone in particular. But if that's the case generally, Lot, I mean, what do you think this might specifically mean for Latinos who aspire¹⁵ to be homeowners?

DIAZ: Homeownership is a ethic¹⁶ that is really emphasized in our community. And so what that means - they will go to all lengths to kind of become a homeowner. So what that means is, really, they going to have to be much more prudent¹⁷ consumers. We, as - the commercial entities¹⁸ in this country have to make sure that they're providing services that will put Latinos into homeownership in an affordable way and, as we like to say, sustainable over time. There are down payment assistance programs in some localities. There's organizations, like ones we support, that offer families a path to kind of get there. So it's really accessing either support services, programs that support homeownership - but most importantly, always seeking more information before you enter the process rather than responding to an ad or someone who says, I know someone who can give you an affordable mortgage if you can find a house.

MART?NEZ: That's a Lot Diaz. He's vice president of Housing and Financial Empowerment with the Latino advocacy group UnidosUS. Lot, thank you very much.

DIAZ: Thank you very much. It was a pleasure.

(SOUNDBITE OF MARK PRESTON'S "BLUE HILL")

1 risky   

adj.有风险的，冒险的

参考例句：

• It may be risky but we will chance it anyhow.这可能有危险，但我们无论如何要冒一冒险。
• He is well aware how risky this investment is.他心里对这项投资的风险十分清楚。

2 transcript   

n.抄本，誊本，副本，肄业证书

参考例句：

• A transcript of the tapes was presented as evidence in court.一份录音带的文字本作为证据被呈交法庭。
• They wouldn't let me have a transcript of the interview.他们拒绝给我一份采访的文字整理稿。

3 ethnic   

adj.人种的，种族的，异教徒的

参考例句：

• This music would sound more ethnic if you played it in steel drums.如果你用钢鼓演奏，这首乐曲将更具民族特色。
• The plan is likely only to aggravate ethnic frictions.这一方案很有可能只会加剧种族冲突。

4 vice   

n.坏事；恶习；[pl.]台钳，老虎钳；adj.副的

参考例句：

• He guarded himself against vice.他避免染上坏习惯。
• They are sunk in the depth of vice.他们堕入了罪恶的深渊。

5 marketing   

n.行销，在市场的买卖，买东西

参考例句：

• They are developing marketing network.他们正在发展销售网络。
• He often goes marketing.他经常去市场做生意。

6 costly   

adj.昂贵的，价值高的，豪华的

参考例句：

• It must be very costly to keep up a house like this.维修这么一幢房子一定很昂贵。
• This dictionary is very useful,only it is a bit costly.这本词典很有用，左不过贵了些。

7 fully   

adv.完全地，全部地，彻底地；充分地

参考例句：

• The doctor asked me to breathe in,then to breathe out fully.医生让我先吸气，然后全部呼出。
• They soon became fully integrated into the local community.他们很快就完全融入了当地人的圈子。

8 derive   

v.取得；导出；引申；来自；源自；出自

参考例句：

• We derive our sustenance from the land.我们从土地获取食物。
• We shall derive much benefit from reading good novels.我们将从优秀小说中获得很大好处。

9 aspiring   

adj.有志气的；有抱负的；高耸的v.渴望；追求

参考例句：

• Aspiring musicians need hours of practice every day. 想当音乐家就要每天练许多小时。
• He came from an aspiring working-class background. 他出身于有抱负的工人阶级家庭。 来自辞典例句

10 discrepancies   

n.差异，不符合（之处），不一致（之处）( discrepancy的名词复数 )

参考例句：

• wide discrepancies in prices quoted for the work 这项工作的报价出入很大
• When both versions of the story were collated,major discrepancies were found. 在将这个故事的两个版本对照后，找出了主要的不符之处。 来自《简明英汉词典》

11 affordable   

adj.支付得起的，不太昂贵的

参考例句：

• The rent for the four-roomed house is affordable.四居室房屋的房租付得起。
• There are few affordable apartments in big cities.在大城市中没有几所公寓是便宜的。

12 inventory   

n.详细目录，存货清单

参考例句：

• Some stores inventory their stock once a week.有些商店每周清点存货一次。
• We will need to call on our supplier to get more inventory.我们必须请供应商送来更多存货。

13 investors   

n.投资者，出资者( investor的名词复数 )

参考例句：

• a con man who bilked investors out of millions of dollars 诈取投资者几百万元的骗子
• a cash bonanza for investors 投资者的赚钱机会

14 savings   

n.存款，储蓄

参考例句：

• I can't afford the vacation,for it would eat up my savings.我度不起假，那样会把我的积蓄用光的。
• By this time he had used up all his savings.到这时，他的存款已全部用完。

15 aspire   

vi.(to，after)渴望，追求，有志于

参考例句：

• Living together with you is what I aspire toward in my life.和你一起生活是我一生最大的愿望。
• I aspire to be an innovator not a follower.我迫切希望能变成个开创者而不是跟随者。

16 ethic   

n.道德标准，行为准则

参考例句：

• They instilled the work ethic into their children.他们在孩子们的心中注入了职业道德的理念。
• The connotation of education ethic is rooted in human nature's mobility.教育伦理的内涵根源于人本性的变动性。

17 prudent   

adj.谨慎的，有远见的，精打细算的

参考例句：

• A prudent traveller never disparages his own country.聪明的旅行者从不贬低自己的国家。
• You must school yourself to be modest and prudent.你要学会谦虚谨慎。

18 entities   

实体对像； 实体，独立存在体，实际存在物( entity的名词复数 )

参考例句：

• Our newspaper and our printing business form separate corporate entities. 我们的报纸和印刷业形成相对独立的企业实体。
• The North American continent is made up of three great structural entities. 北美大陆是由三个构造单元组成的。