The Zamora family established a credit history and moved up to a bigger home in Vista. From left are: Jonathon, Belen, Jose, Alejandro, Jose Jr. (photo/alandeckerphoto.com)

Jose Zamora’s job at a carpentry shop is a matter of necessity. But it’s a labor of love that keeps him busy evenings and weekends, digging ditches for sprinklers and drainage, building retaining walls, laying cement and landscaping the yard of his Vista home. “It’s for the family. I have a big family,” says Zamora, a native of Hidalgo, Mexico, who came to the United States in 1986. He and his wife, Belen, a stay-at-home mom, have three boys, ages 3, 8 and 11. Six years ago, the couple bought their first home, in Oceanside. Because they had no credit history, a friend co-signed for the loan. In November they moved up to a larger home in Vista, and this time, Zamora qualified for the loan on his own.

In San Diego County, thousands of Latino families like the Zamoras toil day and night to build capital for a home or startup business. Increasingly, the region’s banks and credit unions are recognizing this emerging market and many now are aggressively courting Latino customers.

“The 2000 census, all the alarms went off, that here was this huge market that nobody knew anything about,” says Ernie Reyes, a San Diego Realtor who co-founded the National Association of Hispanic Real Estate Professionals. The association is based in San Diego, and its 14,000 members across the United States represent a broad cross-section of the real estate industry, from mortgage brokers and real estate agents to title officers, appraisers and builders.

Latinos who emigrate to the United States usually have little knowledge or trust of financial institutions because they are used to paying in cash for everything from food and clothing, transportation and the roof over their heads. In Mexico, Reyes says, the home ownership rate is 90 percent, but nearly all home sales are in cash or the paper is carried by the home seller.

Because of their personal experience, he says, Latinos may be unwilling to trust their savings to a bank or credit union. Financial institutions in turn may be loath to loan them money because they lack a credit history. In determining who qualifies for a mortgage, lenders look at the FICO score, a credit rating that gives heavy weight to a track record of borrowing money and paying it back on time.

Margy Rice, vice president of Financial 21 Credit Union, says the credit union is reaching out to Latinos. (photo/alandeckerphoto.com)

If a smaller percentage of Latinos own homes than their Anglo counterparts, it’s certainly not from a lack of desire, Reyes says: “They almost have a genetic makeup that says, ‘I gotta own my own home versus being a renter.’ Latinos don’t buy a home because it’s a good investment. They do it because it’s the right thing for their family. It’s a safe environment, it’s a stable environment.”

Credit unions and banks are aware of the gap between themselves and the Latino market, and they are using a variety of methods to bridge it. Financial 21 Credit Union launched an outreach effort to connect with Latino customers last year at its South County branch at Terra Nova Plaza in Chula Vista. The program was the result of strategic planning and research that showed the credit union’s largest potential for growth was in the Latino community, says Marjorie Rice, vice president of marketing for Financial 21.

The credit union began with focus groups to find out exactly what Latinos wanted from their financial institution. Financial 21 then began beefing up its bilingual staff, printing brochures and other materials in Spanish and English, and directed staff to get involved in all manner of community events, from blood drives to Boys & Girls club fund-raisers.

“Our thought process was, we want to be able to meet their needs specifically, because it is such a growing element,” Rice says. This year, Financial 21 will expand its Latino outreach efforts to its Vista branch.

Latinos now account for 28 percent — or 841,000 — of San Diego County’s 2.96 million residents. By 2030, when the overall population of the county is projected to reach 3.85 million, Latinos will represent more than 36 percent of county residents, or 1.4 million people, report the U.S. Census and the San Diego Association of Governments.

Banks also are trying to capture a bigger share of the Latino market. Rigoberto Herrera, vice president and loan officer with Seacoast Commerce Bank in Chula Vista, said bringing in Latino business is his key focus. The bank also is trying to hire bilingual tellers, loan officers and other staff, and has a Latino board member, National City Mayor Nick Inzunza.

Having bilingual employees is very important, says Herrera, because even if Latinos speak English, “they feel more comfortable reading, speaking, communicating in Spanish.” But simply being bilingual isn’t enough, he says. Latinos want to deal “not only with someone who speaks the language, but understands their way of doing things.”

It’s about attitude and understanding the culture. “The way that you move. It’s a feeling that I cannot put into words,” Herrera said.

Latinos are likely to establish a banking relationship much differently than Anglos. Rice, of Financial 21, says Anglos come in to get a loan, and open an account because it’s required by the credit union. For Latinos, “usually it starts out with them finding a place where they feel comfortable with their savings and then finding out about the loans we have to offer.”

Trust, and establishing personal relationships with their bankers, are crucial to Latino customers, say bank and credit union officials. Other steps financial institutions are taking to recognize what Reyes calls “the idiosyncrasies of the Hispanic market” include:

• Considering factors besides credit history to determine eligibility for a loan, such as utility and rent payments, and installment purchases.
  
  
• Allowing multiple families to purchase a home together, when a single family’s income doesn’t qualify for a home mortgage loan.
  
  
• Providing education in Spanish about banking, loans, mortgages and other financial matters.
  
  
• Creating space within branch offices where extended families can speak with staff members in Spanish, and children can play while their parents conduct business.

Larger lenders, such as Bank of America, have national advertising campaigns targeted at Latinos.

“The message is Bank of America understands the needs of Hispanic customers. We are here to build a relationship and advise you in building your financial nest egg,” says Javier Palomarez, vice president for marketing and multicultural initiatives.

The ads promote such things as the bank’s program of placing new banking centers in predominantly Latino areas, and a package called “Nuevo Futuro” that links savings and checking accounts with a service that allows customers to electronically transfer money to the bank accounts of relatives in Mexico.

Bank of America is remodeling a branch in San Ysidro to enhance its appeal to Latinos, down to a waiting area with a television playing CNN in Spanish and “People” magazine in Spanish on the coffee table.

Local banks are just as determined to bring Latino customers through their doors, but they have a more “grassroots” approach, says Gordon Boerner, senior vice president at San Diego National Bank. Branch managers at the bank’s San Ysidro, Chula Vista and Southeast San Diego branches are encouraged to get involved in the communities they serve, whether it’s sitting on an economic development council or helping organize a Chicano gala.

“The goal is to talk to, interact with and shake hands with as many of the entrepreneurs as you possibly can so you can identify what their needs are and how you can help them,” Boerner says.

Business Loans

Bringing in Latino business is his key focus, says Rigoberto Herrera, vice president and loan officer with Seacoast Commerce Bank in Chula Vista. (photo/alandeckerphoto.com)

Bankers are eager to make small business loans to Latinos, which sometimes just takes a willingness to take things a little slower.

Herrera, of Seacoast Commerce Bank, says he seeks to identify Latinos who qualify for federal Small Business Administration loans. “If you have someone who takes them through the whole process step by step, it would improve the likelihood they would go through that program.”

The push by lenders to woo Latino customers is helping to reverse past inequities in the home mortgage market, although more work remains to level the playing field, says Anne Marie Tallman, president and general counsel of the Mexican American Legal Defense and Educational Fund. Tallman, whose grandparents were Mexican migrant workers, spent the past decade as an executive with mortgage lending giant Fannie Mae before joining the group earlier this year.

It is in the best interests of banks and businesses in general to embrace the Latino community, Tallman says, because when the rapidly growing Latino population moves into an area, “they create economic opportunity.”

The real estate market is just one of many sectors of the economy that can benefit from Latino buying power.

“We aspire to the American dream of home ownership,” Tallman says. “That aspiration and working to achieve that goal is something that individuals and families put a lot of energy into in the Latino community.”

Even as Jose Zamora transforms his Vista property with the help of his relatives, he’s meeting with his bilingual loan officer to talk about future plans. He wants a bigger house, up on a hill with a view, and also is considering the purchase of an investment property. Smiling, he says, “It’s a Mexican dream, too.”