The housing industry is undergoing a major shift as millennials, Gen Z, and increasingly diverse communities become the dominant force among first-time homebuyers. Long-term success will belong to real estate professionals and mortgage lenders who invest authentically in these markets by prioritizing cultural competence, accessibility, and trust over quick fixes or performative outreach.
To learn more about the importance for lenders in serving diverse markets, and how it can create new competitive advantages, MortgageOrb interviewed Jeremy Davis, president of mortgage for Southern Bancorp.
Q: With millennials, Gen Z, and increasingly diverse communities now dominating the first-time homebuyer market, what’s the biggest strategic mistake you see mortgage leaders making when it comes to capturing this business?
Davis: The biggest mistake is confusing visibility with trust. I see it constantly: Lenders set up a booth or table at a community fair or sponsor a local event, then wonder why the phone does not ring. They treat emerging markets like a campaign instead of recognizing them as the industry’s future.
Meanwhile, the barber two blocks from our office has been cutting hair in that same chair for 12 years. Guess who the community trusts when they are ready to buy their first home?
These borrowers, millennials, Gen Z, first-generation Americans, and other underserved communities, are not hard to reach. They are just tired of being misread. They can smell performative outreach from a mile away. When your “community engagement” disappears the moment a grant cycle ends or quarterly numbers do not look right, communities notice. And they remember.
The fundamental mistake is thinking you can scale trust. You cannot. Trust comes from memories, not marketing budgets.
Q: You argue that authentic investment in diverse markets beats quick fixes. Can you quantify this for executives, what is the actual long-term value difference between a lender that invests authentically versus one that relies on performative outreach?
Davis: The numbers do not lie. Loan officers embedded in communities for years do not just close loans, they create generational pipelines. Their borrowers refinance with us, bring their cousins, and come back when their kids are ready to buy. That is lifetime value you cannot fake.
Compare that to the “campaign approach.” Lenders drop six figures on ads, close a handful of loans, then lose those borrowers the minute someone else offers a refi. Meanwhile, our loan officer who shows up at the same church potluck for two years straight? She is closing eighty loans a year, mostly referrals.
Here is the kicker: In markets where we have invested authentically, our acquisition cost is 46% lower and retention is 68% higher than competitors who parachute in with campaigns. Performative outreach burns money and trust. Authentic investment compounds into revenue, innovation, loyalty, and most importantly, generational wealth for families.
Authenticity is not charity. It is the smartest business strategy in housing today.
Q: How should mortgage executives think about cultural competence—is this a compliance issue, a customer service enhancement, or a fundamental competitive differentiator in today’s market?
Davis: It is a competitive differentiator, full stop. Anyone still treating cultural competence only as compliance is already losing the long game.
Here is what I mean: Imagine a young couple, both teachers but with Spanish as their first language, trying to buy their first home. They had been to two other lenders who technically met all the compliance requirements. They provided Spanish translation, followed fair lending practices, and checked every regulatory box. But both lenders kept pushing products that did not fit their situation and timeline.
When they visit a lender who is invested in building cultural competence, they immediately find someone who understands they were using a combination of down payment assistance, family gifts, and teacher loan forgiveness programs. She knew which programs stacked well together and which community partners could expedite their documentation. She did not just process their loan, she navigated their reality.
That is cultural competence as a competitive advantage. It is not about having the right forms in the right language. It is about having people who understand how financial decisions actually get made in different communities. It is knowing that in some families, the “tía” (or “aunt”) who does not appear on any paperwork might be the real decision-maker. It is understanding that trust is not built in one conversation. It is built over time, through consistency.
Q: What operational changes do successful lenders make beyond marketing to truly serve diverse borrower segments? Where should executives be investing their transformation dollars?
Davis: Start with your people. I cannot stress this enough – hire from the communities you want to serve. Not just front-line staff, but underwriters, processors, and managers. When your team reflects your borrower base, everything else gets easier.
Structure the loan process around flexibility. Traditional lending assumes borrowers have W-2 income, perfect credit histories, and family wealth for down payments. Many borrowers are gig workers, small business owners, or are building credit from scratch. So invest in systems that can handle non-traditional income documentation, alternative credit scoring, and complex down payment assistance layering.
But here is where most lenders miss the mark. They think technology will solve this. We see competitors rolling out AI chatbots in multiple languages, thinking that is innovation.
Technology is important, but it is more important to have a loan officer who can sit down with a family and explain why their credit score dropped when they co-signed their nephew’s car loan and how to fix it.
Where should transformation dollars go? Into people who understand these communities from the inside out, systems that accommodate non-traditional borrowers, and partnerships that put you in front of families before they know they are ready to buy. Everything else is just window dressing.
Q: Looking ahead 5–10 years, what will separate the mortgage lenders who dominate the diverse homebuyer market from those who get left behind?
Davis: The winners will be the lenders who stopped trying to bring today’s emerging markets to their branch and started showing up where trust already lives.
Ten years from now, the mortgage industry will look completely different. The lenders who will dominate understand something fundamental: you cannot scale trust, but you can scale authentic relationships. They will have built what I call “community networks” made up of loan officers who are not just bilingual but bicultural, partnerships that go deeper than event sponsorships, and systems designed around how real families make real financial decisions.
Here is what I see coming: The most successful lenders will look less like traditional banks and more like community institutions. They will have loan officers who have been in the same neighborhoods for a decade or more.
In ten years, when a young family walks into a mortgage office, they will not just be asking about interest rates. They will be asking, “Do you know my community? Can you help me build wealth? Will you still be here when I am ready to help my kids buy their first home?”
The lenders who can answer “yes” to those questions are the ones that will own the future.