Taking the Lead: Advancing Diversity and Inclusion in the Mortgage Industry

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MBA Hosts the 4th Annual Summit on Diversity and Inclusion

“Building a culture of inclusion leads to broader ideas and greater success in our companies,”
Rodrigo López, CMB, 2017 MBA Chairman

 “This is about math. Two-thirds of all new household formations over the next decade will be minority, rental and owned, a mirror opposite to the pre-recession decade,”
David H. Stevens, CMB, President and CEO of the Mortgage Bankers Association

Do you know the most popular surnames in California? No, they are not “Smith, Johnson, or Jones” but “Garcia, Hernandez, and Lopez,” according to a study by Ancestry.com. The country’s demographics have changed, with more changes to come, and many in the industry have taken notice. Companies are focused on how to market to, underwrite, and service new consumers. This new reality creates opportunity for the industry and the Mortgage Bankers Association (MBA) has responded by hosting the leading industry event for promoting diversity and inclusion within the residential mortgage and commercial/multifamily industry. The 4th Annual MBA Summit on Diversity and Inclusion (Summit) is in Washington, D.C. on December 4-5, 2017 at the Capitol Hilton.

The Summit draws attendees from throughout the industry, including large, national depositories, independent mortgage bankers, community groups, government agencies, and companies that support the mortgage industry, such as law firms and consultants. It is an event where you see senior executives (heads of production, servicing, operations, human resources), leaders of community groups, and policymakers networking and attending sessions to learn about and discuss how to increase lending in diverse communities, improve corporate culture to attract and retain more young and diverse talent, and reduce the homeownership gap between minority and white families. These participants know that if you are not leaning in strong on diversity and inclusion in this industry, then you are not maximizing your company’s potential, and you are potentially limiting your company’s future growth. In fact, if you are not specifically developing your strategic plan right now to expand your lending and your workforce to a diverse population, then you are setting yourself up to forgo lending opportunities in the fastest growing market segments and to pass up the most talented workforce.

Top Four Reasons to Attend the Summit

The business case for diversity and inclusion is clearer than ever, so this year the Summit will focus on how to develop the programs, products, and culture to execute an effective diversity and inclusion program. Spoiler Alert: They all impact your bottom line.

  1. Companies with comprehensive outreach strategies to diverse markets have a competitive advantage. It is well known by now, but bears repeating: focusing on diversity and inclusion is not just about good ethics or even compliance, but increasingly about maintaining a competitive edge. As demographic trends continue to alter the makeup of our country, companies who don’t take this reality seriously—or worse, stick their heads in the sand in denial—will lose market share to those who do. As the Millennial Generation sheds its student debt, this group will emerge as the largest and most diverse market in the country. About 44% of Millennials are non-white, and they are just beginning to enter prime first-time homebuyer age.

And yet, only 46% of Hispanic and 43% of African American households own their real estate compared to 72% of White households in the US. While there are challenges to addressing this problem, this gap represents a significant market opportunity for companies willing to address these groups’ needs. If your company isn’t actively pursuing these underserved markets, someone else probably is and will be better positioned to be the lender of choice for these borrowers.

  1. New HMDA Requirements = Increased Focus on Minority Lending. The new Home Mortgage Disclosure Act (HMDA) reporting requirements, which become effective in January 2018, are influencing the way some lenders are viewing their diversity and inclusion plans. With the new, more detailed reporting requirements, mortgage lenders will face heightened transparency and scrutiny of their lending patterns. Strategic lenders will be assessing the picture created by the new required HMDA reporting fields and aligning their programs and products to meet the needs of these growing populations. A serious commitment to diversity and inclusion – or a lack thereof — will be evident in your HMDA data and may be an opportunity for growing your business and garnering positive recognition.
  2. Companies Need to Walk the Talk. Successful outreach to diverse communities begins at home, with a diverse and inclusive work culture. An inclusive culture is also one of the workplace features Millennials care about most. This youngest generation of employees are not just more diverse themselves, but also much more aware of diversity, and seek an equally aware, inclusive employment experience. If your company is serious about attracting top-notch young employees, you must take an honest look at how you are communicating with and incorporating all types of people into your company from entry-level to your most senior managers.

Successful companies, like Pulte Mortgage, MBA’s 2017 winner of the Diversity and Inclusion Leadership Award for Organization Diversity, know the importance of being intentional and genuine in this area. “It all begins with building an inclusive culture,” according to Deb Still, President and CEO of Pulte Mortgage. “Inclusion means creating a trusting environment where everyone feels they belong. Since we all need the ability to recruit and retain future talent we must have the organizational competency to understand, enjoy, and celebrate our differences. And, by including everyone, diversity will happen.”

  1. Network, Network, Network. A top reason for attending the Summit is the opportunity to spend a day with colleagues from all parts of the industry who are thinking about and trying to solve the same tough issues. Sharing best practices and making connections are key attractions to the program. Attendees leave with additional tools in their arsenal to tackle outreach and workforce challenges, as well actionable ideas they can use to create or improve winning diversity and improvement programs.

A Dynamic Program Designed for Executives and Practitioners

The Summit addresses all of these issues with business sessions such as, getting your product and program mix right to penetrate new markets, working with community partners to increase origination pipelines, and understanding how the new HMDA data can help you tell a positive story about your company’s efforts. The program will touch on residential production, servicing, workforce diversity, and leadership best practices.

Featured speakers will inspire attendees to expand their thinking of how to advance diversity and inclusion within their companies, and they will offer practical guidance that can be implemented immediately. The Honorable Melvin L. Watt, Director of the Federal Housing Finance Agency, and Marc Morial, President and Chief Executive Officer of the National Urban League, are well-known leaders who will give industry insights. External speakers, such as Erika Irish Brown, Global Head of Diversity, Bloomberg LP will offer practical “Leadership Lessons” and Lissah Taylor Hundley, Vice President, Workforce Diversity and Inclusion, Military Housing and University Relations at Comcast, will talk about “Managing Unconscious Bias and Creating High-Functioning Teams.”

New this year is a pre-Summit networking event entitled, “Empowering Women to Lead,” hosted by mPower, MBA Promoting Opportunities for Women to Extend their Reach, on Monday, December 4 before the Summit’s opening reception. mPower is exclusively for women in the real estate finance industry (an underrepresented group in this business) and provides opportunities for women to strengthen their networks, achieve professional growth and development, and to exchange ideas and information about our industry and the broader economy. Marcia Davies, MBA’s Chief Operating Officer and founder of mPower states, “At MBA’s many events and conferences across the country we saw a need for an inclusive space for women at all levels of the real estate finance industry. We started small with some informal events, and soon saw such interest we brought them to more and more conferences and meetings, including state association meetings. While mPower’s meetings and online community are focused on addressing the needs of women in our industry, specifically, we share the broader value of embracing the strength that diversity of all types brings to an organization, and the need for specific strategies to make sure women and minorities in your workforce feel included.” Ms. Davies will interview Kim Lanham, Senior Vice President of Marketing and Client Services at Digital Risk’ and Kristin Messerli, Chief Executive Officer of Cultural Outreach Solutions, on advice for various stages of a woman’s career. mPower is a natural complement to the Summit and enhances the experience of the event for all attendees (men are welcome and encouraged to attend and support).

Forward-thinking companies know that including diversity and inclusion considerations within their strategic plans is not optional. They have moved beyond knowing that there is a business imperative to diversity and inclusion and have started to take concrete steps toward implementing market outreach and workforce initiatives to make themselves more competitive. MBA’s Summit will provide lenders the opportunity to network, learn about resources, and gain practical tips on improving their diversity and inclusion efforts. Whether you think your business is ahead of the curve or behind, you are guaranteed to leave with a better understanding of how diversity and inclusion will position your company for success.

 

Tamara King

Tamara King is the Vice President of Residential Policy and Member Engagement for the Mortgage Bankers Association and leads their efforts in Diversity and Inclusion. Joe Palank, Assistant Director, Member Engagement at the MBA also contributed to this article.

 

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