When it comes to mortgage denials, minorities are leading the pack: Black and Latino homebuyers are less likely to be approved for mortgage loans than their White counterparts.
While it’s easy to see how the impact is great for minorities, mortgage lenders suffer as well.
Every time someone is denied a mortgage loan, the loan officer doesn’t get paid, the lender doesn’t make money and the industry’s reputation is maligned. Consumers who are denied a mortgage loan end up feeling dismayed, disconnected, and discouraged. This is especially problematic for banks because these unhappy consumers are your present and future customers.
Since nobody wins when a mortgage loan is denied, we can all benefit from the work of counseling organizations who can help stop mortgage denials in their tracks. Counseling organizations work with consumers to assess their readiness for homeownership and if they’re not ready, we work with them until they are.
The impact of denials is great, but counseling organizations can mitigate some of those denials and maximize closings. We have looked at a multitude of mortgage programs and we understand what consumers must do to be prepared. As a result, consumers are financially ready to buy a home before they come to the lender. Then they are more likely to be approved and successful in their quest to buy a home.
In a world with more mortgage approvals, lenders are happy, real estate professionals are happy and most importantly consumers are happy. Successful homebuyers believe that the lending community is working with them, which helps the industry as a whole.