The Eagle is about to land for Latino families who are interested in home ownership.

Under a new alliance with Freddie Mac, Hispanic families in about a dozen markets will be offered affordable home loans designed specifically at helping members of the nation's fastest growing minority become owners.

The first partnership is in the Southern California area, where the De Oro Group, a relatively small Hispanic-centric lender based in Ontario, will team with U.S. Bank Home Mortgage, a subsidiary of the eighth largest financial services holding company in the country.

Under the initiative, U.S. Bank will serve as the aggregator for De Oro's mortgages and will sell them to Freddie Mac, thereby insuring a continuous supply of funds for additional borrowers.

The alliance was fostered by the National Association of Hispanic Real Estate Professionals, a San Diego-based trade group of mostly small mortgage brokers and bankers with 13,000 members in 44 states. The group's largest members are called "Eagles."

The organization's mission is to promote housing and community development for Hispanics, said spokesman Gary Acosta, a mortgage broker in San Diego. The goal is to reach a loan volume of $1 billion within the first year and $5 billion annually within three to five years.

Similar partnerships are planned for Florida, Colorado, Illinois, Nevada and other areas where the group's 18 largest members, known as "Eagles," have a strong presence. Collectively, the Eagles account for some $5 billion in real estate transactions a year, mostly involving Hispanic customers.

Though the Eagles are "not obligated" to participate in such an arrangement, said Acosta, "many have expressed an interest" in being part of one.

Under the Southern California initiative, which covers Los Angeles, San Diego and Phoenix, De Oro will offer a low-downpayment mortgage that caters to Latinos, who tend to earn their livings from non-traditional sources and have limited credit files.

The 30-year, fixed-rate loan allows borrowers to qualify with only a small amount of stated income and will be underwritten manually instead of electronically so any credit issues will be reviewed and judged on a case-by-case basis.

"The product and process will be tailored to the unique characteristics of the Latino community," said De Oro partner Steve PonTell, noting that half the firm's clients have a low credit score or no score at all.

"When your whole life is measured by a credit score, you need a whole lot of compensating factors to make your case."

Normally, relatively small firms like De Oro, which writes about 150 loans a month, don't have direct access to mortgage investors because their loan volumes are not large enough, so the amount of money they can lend is limited. But in this case, U.S. Bank will collect the loans made by De Oro and two San Diego brokers, Acosta's firm, SD Frontier, and Mission Home Loans.

The mortgage banker also will provide second mortgages for borrowers who don't have enough cash of their own to cover the downpayment, closing costs and prepaid items.

The ownership rate among Latinos is lower than that of most other minorities, largely because they face many hurdles, not the least of which is very little understanding of the home buying process.

Research by Fannie Mae has found that six out of every 10 Hispanics are uncomfortable with home buying terminology, half think they need perfect credit and less than that are not aware lenders are not required by law to give them the lowest rate possible.

"The lack of awareness is a huge barrier," said De Oro's PonTell. "It's unrealistic to expect (most Latinos) to visit a lender or real estate broker of their own because they don't know anything about the process."

Another factor that tends to limit Latinos' home buying opportunities is their lack of trust in realty professionals whom they don't know personally or have not been recommended to them by someone they do believe in.

"There is no national enterprise that serves the Latino market or is controlled by Latinos," said Acosta.

But Freddie Mac's Paul Peterson said Hispanic-owned firms like De Oro, which also has a Century 21 franchise as well as title and remodeling divisions, provide mainstream lenders access to the Latino community they can't gain on their own.

Through 11 offices in Southern California and Arizona, the company, which employs 140 people, many of whom speak Spanish, has assisted 15,000 families realize the American dream.

"This alliance is opportunity to be intelligent about lending to the Hispanic community," said PonTell.

Published: July 23, 2003

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When Lew Sichelman first started writing about housing in 1969, he was the youngest real estate writer in the country. Now, 37 years later, he's one of the oldest -- and most decorated. He has been rated the top housing columnist in the country by the National Association of Realtors as well as by his peers in the National Association of Real Estate Editors. Indeed, NAREE has recognized his work on numerous occasions. One year - due to his advancing age, he can't recall which one - he earned top honors in the annual NAREE Journalism Contest in three out of the four major writing categories. It was the first time one writer has won so many NAREE awards in a single year. Known for his ability to make even the most difficult topics understandable, Sichelman also has been honored by the National Association of Home Builders and the Mortgage Bankers Association. He began providing in-depth coverage of and consumer-oriented information about housing and housing finance at the Washington Daily News, where he was real estate editor. He held that same position for nine more years at the Washington Star, which purchased the News in 1972. The Star, a so-called "writer's newspaper" which also had the misfortune of being an evening paper, was put out of its misery in 1981, and Sichelman, who had begun self-syndicating his column in 1978, decided to become a full-time columnist. Today, his column, "The Housing Scene," is distributed by United Media to newspapers throughout the country. He also is on the staff of National Mortgage News, an independent newspaper which is considered the bible of the mortgage business. And he writes for numerous other publications, including MarketWatch.com, where he answers readers questions once a week, Sports Illustrated (don't ask), RealtyTimes.com, BigBuilder and others. Sichelman is married, the father of five and grandfather of eleven.