Homeownership Often Begins with a Banking Relationship and Credit History; Focus Group Study of Latinos Outside the Banking System Shows Need for Better Information About the Path to Homeownership

6/16/2004

From: Karen Kay Speer, 202-354-8205 or kkspeer@homeownership-updates.com, or Bill Mashek, 202-354-8275 or bmashek@homeownership-updates.com, both of the Homeownership Alliance

WASHINGTON, June 16 -- The path to homeownership in the United States often begins with the establishment of a banking relationship and the development of a credit history. However, because of a number of barriers and limitations, many Latinos in the United States do not immediately establish these relationships, according to research recently conducted for the Homeownership Alliance by Bendixen & Associates.

"One of the clearest findings from the focus groups shows that these Latinos fully embrace the 'American Dream' of homeownership and the possibilities that it can bring to themselves and their families. When focus group participants were asked how many dream of owning a home in the U.S., all hands went up, except for a couple of participants who already owned homes-and even they dreamed of owning a better home in the future," said Sergio Bendixen, president of Bendixen & Associates, the nation's leading independent polling firm in assessing Latino public opinion.

The new research, based on two focus groups -- one in Mobile, Alabama and one in Las Vegas, Nevada -- sheds light on Latinos' banking experiences and explores their attitudes toward establishing bank accounts and becoming homeowners.

"Language barriers serve as one of the greatest obstacles to opening a bank account for many Latinos in this study. Additionally, the fear of bank fees, the lack of money for a minimum opening deposit and the lack of proper identification documents rank as top concerns when opening a bank account," said Bendixen.

"Most participants seem to understand the value of establishing a credit history for the purposes of homeownership, yet some are unaware of what is needed to establish a 'good' credit history," said Bendixen.

The focus group results provide insight on Latinos' opinions about banking and homeownership. Specifically:

-- In both focus groups, Latinos were "worried" about their financial situations. The participants are still adapting to a new country and the economic insecurities that come with being relatively new immigrants.

-- Generally, Latinos in Mobile and Las Vegas are intimidated by banks, and language barriers serve as one of the greatest obstacles to opening a bank account for Latinos in both cities.

-- Latinos in both Mobile and Las Vegas have strong desires to become homeowners, despite the fact that some view homeownership more as a fantasy than as an achievable dream.

-- Interest from the participants suggested that the Latino communities in Mobile and Las Vegas would react well to a banking product that included the acceptance of their foreign identification documents, receiving a number of free checks monthly, a flexible minimum deposit requirement, the ability to send money to their families through the bank and direct deposit services.

These results regarding the reluctance of Latinos to utilize U.S. bank services are reinforced by a larger study conducted by Bendixen & Associates for the Inter-American Development Bank (IDB), which found that Latin American immigrants in the U.S. will send an estimated $30 billion back home in 2004.

"Previous Bendixen research confirms that Latinos are reluctant to utilize U.S. bank services. Instead of using U.S. banks, more than 90 percent of Latinos use money transfer companies, people traveling or the mail to send money to their families back home according to his research, " said Rick Davis, president of the Homeownership Alliance.

More Americans own homes today than at any other time in our nation's history. However, according to the US Census Bureau, minority families have a homeownership rate of 49 percent, compared to one of 74.6 percent for white families. "We have an opportunity in the next decade to increase minority homeownership and significantly reduce the minority homeownership gap," said Davis.

"This report shows that we must work to educate Latino communities in the U.S. about the importance of a banking relationship and a credit history," said Davis. "The future of the housing market rests heavily on the economic success of minorities. Homeownership is likely to grow faster among minority Americans in the next decade if all the stakeholders in the housing industry work together to make it happen. The Homeownership Alliance is working toward this goal."

The results of the focus groups on Latinos, homeownership and banking were released today at the National Press Club in Washington, D.C. To download the study, go to http://www.homeownershipalliance.com.

Bendixen & Associates conducted one focus group of Latino females in Mobile, Alabama on April 23, 2004 and one of Latino males in Las Vegas, Nevada on April 30, 2004. The two focus groups were conducted in Spanish by professional moderators and lasted approximately two hours. Each group session included 10 participants who self-identified as un-banked, meaning that they had neither checking nor savings accounts. The participants were a representative sample of the Latino communities in their respective cities.

Sergio Bendixen is recognized as the preeminent expert in Latino public opinion research in the United States and Latin America. With more than 25 years of polling experience, Bendixen is an expert in public opinion research. He has mastered research methodologies and has implemented detailed techniques to formulate studies and polls that accurately gauge public opinion. Drawing from his experiences in most Latin American countries and throughout the rapidly growing Latino populations in the U.S., Bendixen specializes in gathering information about Latino public opinion.

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Based in Washington, D.C., the Homeownership Alliance is a coalition of more than fifteen organizations committed to ensuring support for the American housing system. Members include Consumer Federation of America, The Council of Insurance Agents & Brokers, The Enterprise Foundation, Fannie Mae, Freddie Mac, Habitat for Humanity International, Independent Community Bankers of America, Independent Insurance Agents & Brokers of America, Local Initiatives Support Corporation, National Association of Federal Credit Unions, National Association of Hispanic Real Estate Professionals, National Association of Home Builders, National Association of Mortgage Brokers, National Association of Real Estate Brokers, National Association of Realtors(r), World Floor Covering Association, National Bankers Association, National Council of La Raza, and National Urban League.