HispanicTrending

February 29, 2008
By MAURA POSSLEY

Understanding what makes a consumer tick is the key to a good advertisement, but companies often don’t have a clue when it comes to the nation’s fastest growing minority market.

To give businesses knowledge about the Hispanic market, the Association of Hispanic Advertising Agen- cies has launched a Latino Cultural Identity Study.

The study aims to dig deep into what drives Hispanic consumers, helping businesses effectively reach that segment of the marketplace, said Jose Lopez-Varela, chair-elect of the Virginia-based organ- ization.

"In the past, it’s all sort of been defined by language," said Lopez-Varela, chief executive officer of the Coral Gables advertising company ADN Communications. "Language is just one aspect of being a Latino."

A 2005 study by the association of the nation’s top advertisers found that while spending on Hispanic print and television advertising grew 4.7 percent from 2003 to 2004, the amount allocated for Hispanic media compared to total advertising budgets dropped nearly 1 percent for that same period.

On the Gulf Coast, businesses have reacted to the growing market but have yet fully invested in Spanish-language media or English advertising targeted at Hispanic consumers, said Pedro Perez, of the Sarasota-based Nuevo Advertising.

"Everybody is dabbling in it but no one is doing it well," he said. "They’re looking for guidance."

The study will look at four pillars that the association said defines cultural identity: interpersonal orientation, time and space perception, spirituality and gender perception.

The project begins with focus groups to allow "a Latino to decide what makes a Latino," Lopez-Varela said.

The study seeks to present a uniform look at the Hispanic market and advertising industry, according to the association.

But distinguishing differences between the Spanish-speaking countries is necessary, said Elizabeth Cuevas-Neunder, president of the Puerto Rican Chamber of Commerce of Sarasota-Manatee counties.

"They cannot market the same to Puerto Ricans as they would to Mexicans," she said. "We are a great source of purchasing power, but we all have different behaviors."

Businesses have begun to seek exposure by climbing aboard Latin chambers, said Manuel Chepote, president of the Gulf Coast Latin Chamber of Commerce.

The opportunity to engage the local Hispanic market is everywhere, Chepote said, everything from faith-based festivals to soccer games.

Source: Bradenton Herald

February 29, 2008 03:41:32 AM
By EUNICE MOSCOSO

The Latino community has been hit hard by the subprime mortgage crisis and the situation could get worse, the president of a Latino civil rights group told Congress on Thursday.

Janet Murguia, president of the National Council of La Raza, told a key House panel that Latinos are vulnerable to abuse in the housing market because of many factors, including a lack of banking and credit history, and often are steered into high-risk loans even when they qualify for better rates.

About one in 12 mortgages to Latinos in 2005 and 2006 will end up in foreclosure, she said, citing a report by the Center for Responsible Lending, a nonprofit consumer advocacy group.

The Northern San Joaquin Valley has been ground zero for foreclosures. Stanislaus, Merced and San Joaquin counties are at the top of the list of areas with the most foreclosures in the country.

Experts attribute this in part to the high percentage of subprime loans that were made in the valley. One study put that figure at more than 46 percent. It also found that more than 60 percent of Latino home buyers in the valley received subprime and other high-cost mortgages.

"NCLR is deeply concerned that a generation of Latino wealth is under attack," Murguia told the House Appropriations Subcommittee on Financial Services.

Nearly half of Latinos are homeowners

Latinos have made strides in homeownership in recent years, from 42 percent in 1995 to nearly half in 2005, but those loans were often at higher rates.

Murguia said Latinos were 30 percent more likely than whites to receive a high-cost mortgage and twice as likely to receive an "option-adjustable rate mortgage" known as an ARM.

The latter has been used in predatory lending in which the homeowners begin with a low monthly payment and are unknowingly adding a balance to their mortgage each month. Eventually, the payment increases significantly, which is known as a "reset," and many homeowners can’t afford to pay.

Because of upcoming resets, the peak of foreclosures for Latino households will be in 2009 and 2010, Murguia said.

She urged lawmakers to take action because "we know this is on the horizon," she said.

Murguia recommended creating a community-based financial counseling network to help consumers manage their finances and learn how to avoid unmanageable debt.

In addition, she said, federal agencies, credit card companies and local consumer protection agencies should partner with community-based organizations to raise awareness of financial scams.

Donna Gambrell, director of the Commu-nity Development Financial Institutions Fund at the Treasury Department, also testified before the panel.

1.8 million mortgages will reset

She said that 1.8 million ARM mortgages are scheduled to reset in 2008 and 2009 and her agency is trying to get ahead of the problem.

Gambrell touted the HOPE NOW Alliance, a partnership between the government, mortgage lenders and nonprofit counselors, to help consumers avoid foreclosure.

The effort, started in October, has sent 1 million letters to at-risk homeowners offering help, and a nationwide foreclosure prevention hot line, 888-995-4763, receives 4,500 calls a day.

"Homeowners must take responsibility and respond to this outreach," she said. "Struggling homeowners must actively engage with their lenders and demonstrate that they want to keep their homes in order for our initiatives to be effective."

Rep. Jose Serrano, D-N.Y., chairman of the subcommittee, asked the witnesses whether the government should have seen the mortgage crisis coming.

Lydia Parnes, director of the Bureau of Consumer Protection at the Federal Trade Commission, said that it was a "hard issue."

"We saw specific issues with specific companies. We did not see a prevalent practice across the industry that would have flagged this," she said. "It was hard to crystal-ball that."

Source: The Modesto Bee

February 27, 2008
By Dan Grech

Construction went from being a leading contributor to employment growth to a leading source of unemployment. Dan Grech reports from a community near Miami that the Latino population has suffers a particular loss.

Doug Krizner: Later this morning, we’ll get the numbers on new home sales for January. It’s likely we’ll see more evidence of a building industry still in the dumps.

Just a year ago, this business was a goldmine, especially for Latino construction workers. Two out of every three new construction jobs were filled by Hispanics. Cities like Las Vegas, Phoenix and Miami became meccas for tens of thousands of recently arrived immigrants. So how are they biding their time these days? From the Americas Desk at WLRN in Miami, we sent Marketplace’s Dan Grech to find out.

Dan Grech: At its height, the construction industry employed 1 in 4 Hispanic workers. That’s 3 million people with well-paying jobs — 3 million families that could, for perhaps the first time, aspire to some middle-class comforts. What a difference a year makes.

Rakesh Kochhar is a researcher with the Pew Hispanic Center:

Rakesh Kochhar: The construction sector went from being a leading contributor to employment growth to a leading source of unemployment. Whatever gains they had appear to have been wiped away in the space of this past year.

Homestead is a sprawling bedroom community near Miami. When the economy was healthy, Homestead was the fastest growing city of its size in the nation, and a magnet for Hispanic laborers. Now, it’s a way station for ex-construction workers like Tomas Diaz.

Diaz laid floors and built roofs for $14 an hour — enough to get married and start a family. Now, he now cuts lawns for $8 an hour.

    Diaz (voice of interpreter): I don’t know what to do with all these bills that keep coming month after month. You start to think, do I pay this bill, or do I buy food?

Many ex-construction workers in Homestead have turned to farm work. Others are day laborers or landscapers.

Hector Sales manages a run-down apartment building on the edge of town. He spent a recent morning trying to salvage some old electric coil ovens. The building once teemed with workers. Now, it’s almost empty.

Jonathan Fried runs We Count!, a Homestead community organization:

    Jonathan Fried: People need to move to survive. And if they don’t find work here, they’re gonna move elsewhere.

Pew’s Rakesh Kochhar says some Hispanics are getting a new start.

    Kochhar: One small surprise is the growth of Hispanic employment in education and health services — more white-collar work.

Kochhar says Hispanics often work the lowest paying jobs in those industries. Still, there are opportunities to move up.

Source: American Public Media’s Market Place

February 28, 2008
By Binyamin Appelbaum 

An annual report on mortgage lending in Massachusetts finds that black and Latino borrowers were disproportionately the recipients of loans with high interest rates in 2006. Perhaps the more interesting question is what the 2007 report will show.

The lending industry has changed dramatically since 2006. Lending at high interest rates has all but dried up. The five companies that made the most subprime, or high-rate, loans in Massachusetts in 2006 all have suspended lending, including New Century Financial Corp. and Fremont Investment & Loan.

The question is whether other institutions are now making loans to people formerly served by the subprime industry, or whether some neighborhoods risk a return to the underserved days of redlining.

"We’re hoping that some of the responsible lenders step forward and replace them in an aggressive way," said Tom Callahan, a board member of the Massachusetts Community & Banking Council, which issued the report. "All banks – big, medium, and small – should be really licking their chops here."

The report does not just underscore the racial pattern of high-rate mortgage lending. It also underscores just how pervasive subprime lending became.

One in every five home-purchase loans in Massachusetts in 2006 carried a high interest rate. And, the report found at least one high-rate loan was made in every community in Massachusetts.

This is the 14th annual report for the council authored by Jim Campen, a researcher at the University of Massachusetts at Boston. It is titled "Changing Patterns," but it reports very little change: Blacks, and to a lesser extent Latinos, remained largely unable in 2006 to borrow money at the same interest rate as whites.

Just 26 percent of black applicants for a home-purchase loan got an interest rate near the market average. About a quarter were rejected and the rest got loans with high interest rates. By contrast, 64 percent of white applicants got loans with market rates.

The report found that companies specializing in lending at high interest rates continued to concentrate their lending in minority neighborhoods.

And it found fresh evidence of a particularly striking pattern: The study reports that 53 percent of black borrowers in the Boston area making at least $98,000 a year got mortgage loans with high interest rates, compared with 13 percent of white borrowers.

A high interest rate is defined as a rate about two percentage points, or more, above the prevailing market rate.

The study estimates that the average recipient of a high-rate loan actually was four percentage points above the market rate – an average rate of 10.44 percent compared to an average market rate of 6.5 percent. On a $325,000 loan, that’s a difference of about $900 a month.

Campen’s study is based on data that lenders report to the federal government under the Home Mortgage Disclosure Act. The federal government releases raw data for the previous year in late summer. Data for 2007 will be released later this year.

The federal data do not include significant information about a borrower’s financial circumstances, such as savings, debts, and credit history. The lending industry argues that makes it impossible to conclude that disparities are the result of discrimination by lenders, rather than economic circumstances. Major industry trade groups oppose reporting that data, calling it an unnecessary burden.

Kathy Schreck, a past chair of the Massachusetts Mortgage Bankers Association and a board member of the council that issued the report, said she supported further inquiry.

"It’s very important for lenders and for regulators to look at the trends and see why minorities are getting higher-priced loans," said Schreck, also a regional sales manager for Mortgage Network Inc., one of the largest mortgage lenders based in Massachusetts. "I want to know why."

Source: The Boston Globe