Shalecia Callaway: The Critical Importance of Diversity in Mortgage


PERSON OF THE WEEK: Diversity, equity and inclusion (DEI) is a high priority in 2022 as mortgage lenders work to increase access to homeownership and develop a workplace that reflects our communities’ diversity.

To learn more about this critical initiative, MortgageOrb spoke with Shalecia Callaway, senior vice president of system support for Financial Industry Computer Systems Inc. (FICS), a mortgage software company that provides flexible loan origination and mortgage servicing software. 

Callaway explains why DEI is important in the mortgage industry and how technology can help lenders achieve it.

Q: What is diversity in lending? How is it achieved?

Callaway: At its most basic, DEI refers to building diverse, equitable and inclusive workplaces that best represent the communities lenders serve. Diversity in lending means providing fair and equal access to mortgage services to individuals without discriminating based on gender, age, race, religion, disability, and sexual orientation. Workplace inclusion means valuing all employees and giving them equal access to resources and career growth opportunities. 

Achieving DEI is the responsibility of individual companies and their owners. Federal agencies [such as the U.S. Department of Housing and Urban Development (HUD), Federal Housing Finance Agency (FHFA) and the Consumer Financial Protection Bureau (CFPB)] enforce regulations—such as the Home Mortgage Disclosure Act (HMDA) and Community Reinvestment Act (CRA)—that promote fair lending practices in accordance with the Fair Housing Act.   

Truly embracing DEI, though, means going beyond regulatory compliance to look for ways to improve access to mortgages, lending industry jobs, and leadership positions. Lenders are taking creative steps, such as exploring untraditional means to evaluate borrowers (e.g., considering rent payments as part of borrowers’ credit histories), to allow more people to achieve the American Dream of home ownership. They are also investing in programs that give every employee equal growth and advancement opportunities.

Q: Why is diversity so important in the current mortgage climate?

Callaway: Achieving growth objectives will be challenging if lenders don’t cultivate a more diverse customer base. Our population is becoming more diverse; and if lenders don’t keep pace, they will be competing for a smaller part of the market. When 44 percent of Millennials—the largest generation of potential homebuyers—are minorities, reaching diverse markets of potential homebuyers is essential to stay competitive.

Between 2010 and 2020, the buying power of Asian Americans grew by 111%, with the buying power of other ethnicities also increasing: Hispanics (87%), Native Americans (67%), and African Americans (61%). Together, these groups make up more than 28% of the buying power in the United States. 

Home ownership was a far-fetched dream for many minorities in the recent past. Now equity is a high priority, and many people (across all racial, gender, and sexual orientation lines) have the education, jobs, income, and credit scores that make homeownership possible. There are fewer excuses to hold people back through traditional lending practices.

Fortunately, diversity is an idea that is finally gaining traction. The mortgage industry, which limited leadership to white males for years, has become more diverse. We are seeing more women and people of color advancing in financial careers. However, there is still much work to be done. Equal Employment Opportunity Commission (EEOC) data show that across all financial services, white men made up more than half of all executive and senior-level positions in 2018. 

Q: What does diversity look like from both the lender and borrower’s perspective?

Callaway: Lenders should make sure their employees represent their customer base – or go beyond that if that base isn’t as varied as it should be. To attract more diverse borrowers, lenders should employ a diverse, representative staff. With a better idea of what people in their communities consider a satisfying home buying experience, these employees can meet borrower expectations. 

Most borrowers will look at the lender’s staff to gauge the institution’s diversity. Potential borrowers may feel uncomfortable—and avoid homeownership—if they cannot work with someone who is like them. When a borrower walks into a branch staffed by a diverse group of helpful people, homeownership may seem more attainable. This is especially important for customers who speak other languages. Eliminating language barriers is one important strategy to build a stronger, broader customer base.

Borrowers will also look for signs of diversity in lending in their own community. Prospective borrowers who don’t know many homeowners who look like them may assume they cannot qualify for a mortgage. By reaching out to consumers in underserved areas, lenders can demonstrate their willingness to serve them. 

Q: How does technology support a more diverse mortgage industry?

Callaway: The best way to empower the people we employ and those we serve is through better information. That makes our technological resources and advancements particularly important. Consumers from all backgrounds rely on online resources for information. We have to offer borrowers easily accessible information explaining the complicated mortgage process. Fortunately, today’s technology makes it possible to create documentation in any language, making it easier for borrowers with limited English proficiency to interpret and understand. Eliminating this language barrier is the first vital step in reaching out and effectively serving these communities.

Technology also makes it easier to help diverse customers feel comfortable and respected. Today, borrowers from all backgrounds embrace electronic capabilities (e.g., eSign, eClose, and eMortgages). Receiving electronic documents prior to closing gives borrowers time to review them and makes it easy to share them with family members and trusted advisors. Electronic options may alleviate fear of the unknown and get more borrowers to the closing table.

Technology makes it convenient to educate borrowers. Rent vs. buy, mortgage comparison and other calculators help borrowers make decisions and find the best products and rates. Videos, video chat and online help resources explain the complex home buying process. 

Lenders can use software to examine their loan data to look for gaps in their service. HMDA data provides a straightforward way to benchmark a lender’s performance against peers and look for ways to expand services or eliminate unintentional biases. Lenders can also use underwriting software that removes bias from underwriting decisions by making sure applications are not altered based on borrower characteristics. 

Ultimately, everyone wins when there is balance, diversity, equity, and inclusion. More variety leads to broader knowledge and insight. Lenders should keep in mind that “My experience is not your experience.” People think and see things differently. Considering other perspectives opens more doors and opportunities. Lenders can recruit well-qualified talent in the workforce and expand their customer base and offerings. Borrowers can gain access to opportunities that were once closed to them when lenders understand that everything isn’t always black or white.

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