The population of homebuyers and homeowners in this nation becomes more diverse by the day. In order to serve the needs of these families and grow our communities, we as an industry must genuinely commit ourselves to a culture of inclusiveness that diversifies our workforce and business partners. Without it, we will miss the opportunity to enrich our communities and industry in so many ways.”

-DAVID STEVENS, president and chief executive officer, Mortgage Bankers Association

As mortgage banking becomes more competitive and lenders look to expand their businesses, companies are discovering that the real opportunities for growth lie in diverse markets. Today, according to the Council of Economic Advisors, millennials (born between about 1982 and 2004) are the most diverse generation in American history. Based on data from Costa Mesa, California-based Experian’s fall 2013 Simmons’ National Hispanic Consumer Study, 44 percent of millennials identify as a racial or ethnic minority, and one out of every five millennials is Hispanic. To continue to gain market share and compete in increasingly diverse housing markets, lenders must evaluate their own workforces, marketing strategies and company cultures to determine if all levels of their companies reflect this new American identity. Homeownership is being embraced by more people from different backgrounds than ever before. In order to capture this market, lenders need to establish proactive strategies to attract this new customer.

What the research shows

According to Mortgage Bankers Association (MBA) data, the number of households headed by those over the age of 18 reached 122.6 million in 2014. Of these households, 47.6 million were households with individuals between the ages of 18 and 44, an age bracket where home purchases are most common. Contributing to this total were 8.9 million Hispanic households, 6.6 million African-American households and approximately 3 million Asian households.

MBA research finds homeownership demographics will only continue to change, projecting that the United States will see a total of 15.9 million additional households across the country over the next decade-with nearly 70 percent of this growth coming from non-white households (see Lynn Fisher and Jamie Woodwell’s July 2015 MBA report, Housing Demand: Demographics and the Numbers Behind the Coming Multi-Million Increase in Households).

The Hispanic population alone is projected to contribute 5.7 million additional households to the total decade’s increase-a 36 percent increase from 2014.

MBA also projects there will be 2.4 million more African American households and 1.9 million more Asian households by 2024.

Significant changes in the demographics of the United States coincide with the need for significant adjustments to the housing industry to reflect a shift in the needs of the American population.

In 2013, MBA’s board of directors created a Diversity and Inclusion Committee as a means for industry senior executives to identify and share best practices others can incorporate into their business strategies and workforce cultures to quickly embrace changing homebuyer demographics.

MBA made a conscious decision to become an industry leader in the elevation of diversity and inclusion issues within the business of housing finance. MBA believes that the promotion of diversity and inclusion within the mortgage industry is not only the right thing to do, but is critical to the industry’s future financial success.

Good for business

The sweeping changes implemented since 2010 under the Dodd-Frank Wall Street Reform and Consumer Protection Act have significantly impacted the housing finance industry and the way the mortgage industry operates.

One often-overlooked component of these reforms is Section 342 of the Dodd-Frank Act. Section 342 broadly mandates the creation of agency diversity standards and the creation of an Office of Minority and Women Inclusion (OMWI) to establish standards and implement diversity and inclusionary policies and practices within regulated agencies and their respective entities.

The Final Interagency Policy Statement Establishing Joint Standards for Assessing the Diversity Policies and Practices of Entities Regulated by the Agencies (standards), published in June 2015 by the Office of the Comptroller of the Currency (OCC), Board of Governors of the Federal Reserve System, Federal Deposit Insurance Corporation (FDIC), National Credit Union Administration (NCUA), Consumer Financial Protection Bureau (CFPB) and Securities and Exchange Commission (SEC), is now effective. (For more information on Section 342, see Jay Patel’s article, “Reinvention,” in Mortgage Banking’s October 2014 issue.)

Contrary to some common assumptions, diversity and inclusion, as supported by Section 342 and MBA, is not affirmative action. It is about change.

Fostering a more inclusive environment and embracing diversity as a business strategy helps companies be more innovative through exposure to a variety of thought and experiences.

A diverse workforce culture ultimately encourages employees to maximize their growth and potential in the creation of enhanced offerings to untapped markets.

According to current MBA Chairman and former Diversity and Inclusion Committee Chair Bill Emerson, chief executive officer (CEO) of Detroit-based Quicken Loans Inc., “Our companies should look more like the communities we serve today and will continue to serve in the future. Not only does it help us meet the needs of more consumers who dream of owning a home, it makes our companies better.

“We must focus on turning the page in this important aspect of our business to thrive in the future. It’s the right thing to do and it makes complete business sense,” Emerson says.

MBA’s Diversity and Inclusion Committee sees three key factors as critical for building a successful business: 1) innovation, created by a diverse and inclusive workforce that facilitates different perspectives, ideas, cultures, lifestyles and goals to expand company growth and stability; 2) market share growth, developed by hiring leadership to reflect diverse consumers to better understand their needs for new products and different types of services; and 3) recruitment and retention of top-tier employees, achieved by educating young, diverse talent about the housing finance industry.

About the committee

The Diversity and Inclusion Committee reports directly to MBA’s board of directors as a sign of the association’s serious commitment to diversity and inclusion issues.

Per committee charter, MBA’s chairman-elect is the chairperson of the Diversity and Inclusion Committee. This requirement directly ties the committee’s organizational structure to that of the larger association to ensure that MBA’s leadership is invested in the committee’s goals and mission.

Previous committee chairs include Debra W. Still, CMB, president and CEO of Pulte Financial Services, Englewood, Colorado, who chaired the committee during its inaugural year; and current MBA Chairman Emerson. The current committee chair is MBA Chairman-Elect Rodrigo Lopez, CMB, executive chairman of NorthMarq Capital Finance LLC, a subsidiary of NorthMarq Capital, Omaha, Nebraska.

Each year the committee consists of 12 to 16 members who are appointed by MBA’s chairperson (For a list of current committee members, see sidebar, “Diversity and Inclusion Committee Members 2015-2016”).

Members serve a staggered two-year term, and must represent both residential and commercial/multifamily members as well as various types of business models, including independent mortgage companies, mortgage insurance companies, banks and industry vendors.

Accomplishments and contributions

During its 2014-2015 term, Diversity and Inclusion Committee members focused on three major themes: education, supplier diversity and recruitment.

The committee worked to support MBA in its efforts to educate diverse populations on opportunities within the mortgage industry. By the end of the term, the committee had raised $26,000 to support scholarships for students from underrepresented communities to participate in MBA’s Mortgage Banking Bound (MBB) program.

The MBB program is an MBA Education program targeted at professionals seeking career changes and students who are considering careers in real estate finance. (For more information on the MBB program, visit

With money raised by the committee, MBA was able to offer several Path to Diversity & Inclusion Scholarships. These scholarships provide candidates with the opportunity to enroll in the MBB program at no cost. By supporting the MBB program, the Diversity and Inclusion Committee has demonstrated its dedication to the education and recruitment of a young, talented and diverse workforce.

According to one previous student, Thomas Boston, “Mortgage Banking Bound provided me with great insights into how the real estate finance industry operates. The course simplified many aspects of mortgage lending and financial markets that is perfect for all learning levels.”

Boston added, “Mortgage Banking Bound is an efficient and engaging way to network and learn more about various career opportunities in real estate financing. I came away more confident and determined than ever to make real estate financing my career path.”

The committee hopes to continue to diversify the MBB student body to further the recruitment of a more diverse industry workforce in 2016. In Bisnoiv’s February special report, “How 3 of the Country’s Most Successful Hispanic Real Estate Titans Got Their Start,” current Diversity and Inclusion Committee Chair Lopez stated, “To achieve diversity you have to be inclusive-not only with the people that we hire but in the customers we seek.” Lopez advises, “Seek out those stars that have a different ethnic background, a different national background and think differently.”

The committee also prioritized the promotion of supplier diversity by helping lenders locate and encourage business arrangements with minority- and women-owned businesses.

According to 2012 census data, minority and women owned businesses have been on the rise, with 8 million minority-owned firms nationally (up from 5.8 million in 2007) and 9.9 million women-owned firms nationally (up from 7.8 million in 2007). Out of these firms, 3.3 million were Hispanic owned, 2.6 million were African American-owned and 1.9 million were Asian-owned.

To help the industry identify diverse vendors within MBA’s membership, the committee supported an effort by MBA to encourage associate members to self-identify in the MBA Industry Vendor Directory if they qualify as a minority-owned, women-owned or lesbian, gay, bisexual or transgender (LGBT)-owned business. This directory consists of all MBA industry vendor members and is available to both members and non-members (to view MBA’s Industry Vendor Directory, visit tools/buyersguide.aspx).

The committee most recently highlighted the benefits of supplier diversity at the 2015 MBA Annual Convention and Expo in San Diego. MBA hosted a supplier diversity event where speakers discussed the benefits of considering diverse suppliers and best practices on how to find and conduct business with these suppliers. MBA and the Diversity and Inclusion Committee hope that these efforts will make it easier for lenders to connect with diverse vendors and foster long-lasting business relationships.

Finally, the committee focused on helping MBA’s membership comply with Section 342. This effort revolved around the anticipated issuance of the standards and compliance with the final standards.

Over the last 18 months, MBA has held multiple conference sessions and a webinar to detail the steps businesses should take to comply with Section 342. Significantly, the committee and MBA worked with VRM Mortgage Services, Carrollton, Texas, to create a self-assessment tool to assist the industry in executing comprehensive reviews of the performance and success of their initiatives. (For more information on this tool, see sidebar, “Diversity and Inclusion Self-Assessment Tool.”)

MBA partnered with law firm Baker-Hostetler in finalizing a Section 342 Diversity and Inclusion Compliance Essentials Guidebook. Expected to be released in 2016 as part of MBA’s suite of Compliance Essentials, this guide will provide a clear picture of what companies need to do to comply with the standards.

The diversity/Section 342 guide will be editable for companies to implement the policies and procedures and fit them into their compliance management system. The guide will incorporate checklists for companies to benchmark themselves on how their diversity/Section 342 policies and initiatives compare with industry and regulatory standards.

Integrating diversity and inclusion Into MBA events

The Diversity and Inclusion Committee has been instrumental in supporting MBA’s conscious effort to incorporate diversity and inclusion content throughout all of MBA’s events.

The association has included diversity events at conferences such as the MBA Annual Convention and Expo, MBA Commercial Real Estate Finance (CREF)/Multifamily Housing Convention and Expo, MBA Legal Issues and Regulatory Compliance Conference, and MBA Independent Mortgage Bankers Conference.

The committee is currently providing programming input for a diversity session that will be offered at the 2016 MBA National Technology in Mortgage Banking Conference and Expo in April.

MBA’s Diversity and Inclusion Committee also has played a significant role in the development of the annual MBA Strategic Markets and Diversity Summit. The first summit was held in June 2014, and attendance has steadily increased, reaching more than 200 registrants in 2015.

Over the past two years, this conference has featured industry experts, housing stakeholders, community groups and consumer advocates to share their ideas and opinions on diversity and inclusion.

MBA specifically develops its Strategic Markets and Diversity Summit with a business focus. The summit’s primary goal is to educate MBA membership on how to increase their business, attract new customers and stay relevant in the current marketplace by advancing diversity and inclusive practices in their companies. The next Strategic Markets and Diversity Summit will be held in Washington, D.C., on Nov. 16-17.

Current committee member and former MBA Chairman Bill Cosgrove, CMB, CEO and owner of Union Home Mortgage Corp., Strongsville, Ohio, finds that “attending the summit is valuable for me and my senior staff because it provides practical tools and insights into developing strategies that help position my company to be more competitive.” He adds, “I am not only preparing my company for the market of the future, but also for the market that exists today.”

Last year, conference sessions featured current data, trends analyses and business strategies to help companies meet consumer needs. At the 2015 conference, McKinsey & Company revealed that companies in the top quartile for gender or racial diversity are more likely to have financial returns above national industry medians.

MBA also invites panelists from both inside and outside the housing industry to speak on hiring and retaining a diverse workforce, developing community partnerships to foster business growth, and explaining why diversity and inclusion policies are a smart business strategy.

Previous summit speakers have included Marc Mortal, president and CEO of the National Urban League, New York; Jerry Ascencio, performer in 53 Million & One theatrical presentation, and chairman of the National Association of Hispanic Real Estate Professionals (NAHREP), San Diego; and John Hope Bryant, CEO and founder of Operation HOPE Inc.

Other speakers have included Apoorva N. Gandhi, vice president of multicultural affairs for Marriott International Inc., Bethesda, Maryland; and well-regarded human resource consultants.

MBA is committed to growing this conference to help its members serve a housing market that continues to become ever more diverse.

The committee’s 2015-2016 term

During the 2015-2016 term, current committee chair Lopez says his goal is “to provide leadership and guidance to support MBA’s efforts to help the industry gain a competitive advantage by increasing diversity in leadership, workforce and business partners ”

The current committee has established four pillars of focus this year: education, recruitment and retention, marketplace awareness and the 2016 Strategic Markets and Diversity Summit.

The first pillar is education. The committee assembled a task force to continue initiatives to support educational programming from the previous year. To complement the Section 342 self-assessment tool, this task force will focus on educating MBA’s membership about the benefits of implementing diversity and inclusion efforts in their own companies.

In partnership with MBA Education, the committee is developing a series of tools to inform members on the benefits of completing lender self-assessments. The task force is currently exploring the best way to reach MBA members through webinars, short video clips, workshops and other materials. These tools will focus on topics such as how to create a diverse workforce, maintain transparent policies and sustain best practices to support diversity in the workplace.

A second focus this year is a commitment to improve recruitment and retention practices within the industry.

Committee member Corey Davis, senior vice president of national accounts at Arch Mortgage Insurance Co. (Arch MI), Walnut Creek, California, explains, “Diversity is critical to the future of mortgage lending. Only by seeking out and actively recruiting young talent from a wide range of backgrounds and experiences can we hope to rebuild, grow and sustain a dynamic, healthy industry that reflects the very people we serve. Just as we invest in operational infrastructure, we need to invest in diversity-by providing opportunities, offering professional training, creating more career tracks and encouraging the leadership ambitions of a new and diverse generation.”

The committee’s second task force, slated to work on recruitment and retention issues, will work to raise awareness among underrepresented communities on the broad range of career options available within the mortgage banking industry. The task force primarily seeks to support and enhance MBA’s Mortgage Banking Bound program and other educational efforts by promoting participation from minority communities.

Another committee priority is to raise the profile of diversity issues among MBA’s membership. To achieve this goal, the committee’s task force will focus on adding more diversity and inclusion content throughout MBA’s programming to reach broader segments of MBA’s membership. One area where the committee hopes to extend its reach is in commercial/multifamily programming.

Current committee member Cathy Pharis, managing director and head of the Federal Housing Administration (FHA) platform for Wells Fargo Multifamily Capital (WFMC), a subsidiary of Wells Fargo Bank NA, McLean, Virginia, says that “great progress has been made” on diversity and inclusion issues “in large part due to the efforts of groups like the MBA Diversity and Inclusion Committee-but we still have a long way to go in the industry.”

The task force will highlight current minority, women and LGBT industry leaders to champion diversity among MBA’s membership, with a focus on creating a culture that encourages inclusion.

Committee member Patricia Arvielo, president and cofounder of New American Funding, Tustin, California, states, “It is a vital first step, but diversity alone isn’t enough. We can fill a boardroom with a mosaic of diversity, but unless we have inclusion, that mosaic will be good for appearance only. We need inclusion to harness the value of our dimensions-actual involvement. That begins with our leaders creating environments DIVERSITY to page 77

that embrace the unique perspectives and practices of management, employees and consumers.”

Finally, the entire Diversity and Inclusion Committee will provide programming guidance for MBA’s next Strategic Markets and Diversity Summit. The committee and MBA look forward to hosting another successful conference in the fall of 2016 aimed at providing practical tools to enhance effective business strategies and future growth.

A forward-looking strategy

The implementation of diverse and inclusionary practices and policies requires a forward-looking strategy and commitment. MBA recognizes this as an area where the association can be proactive and play a leadership role in the promotion of a strategy that embraces changing demographics.

“The demographic trends are unmistakable,” says MBA President and CEO David Stevens. “The composition of the buyers and borrowers in the mortgage market is changing very rapidly. In order for us to reach these families and enjoy their trust, our front lines, our back offices and our partners must also reflect the rich diversity of the market. This is not just about doing what’s right. It’s about doing what’s smart. Companies committed to diversity will reap success in the new marketplace as they help these new borrowers share in successful and sustainable homeownership and live the American dream.”

The Diversity and Inclusion Committee offers MBA members a unique opportunity to impact the industry by starting a conversation about the opportunities that diversity and inclusive practices and policies can bring to help chart the future success of a business.

If you are looking for a place to begin building your own diversity and inclusion policies and practices, MBA encourages you to begin by utilizing the Diversity and Inclusion Self-Assessment Tool. This tool is a great first step for a company seeking to improve its diversity and inclusion efforts.

For many years to come, MBA’s commitment to playing a leadership role in championing diversity and inclusion will promote positive industry change. Change is key to growth, and how we as an industry respond today will impact the evolution and advancement of the future housing finance industry. MB

The Mortgage Bankers Association’s Diversity and Inclusion Committee is helping the industry align with the real estate finance market’s changing demographics.

MBA projects there will be 2.1 million more African-American households and 1.9 million more Asian households by 2024.

Diversity and Inclusion Committee Members, 2015-2016

Chair: Rodrigo Lopez, CMB, executive chairman, NorthMarq Capital Finance LLC, a subsidiary of NorthMarq Capital

Vice Chair: J. David Motley, CMB, chief executive officer, Colonial Savings FA and its divisions-Colonial National Mortgage and CU Members Mortgage.

Patricia Arvielo, president and co-founder, New American Funding

Barrett Bums, president and chief executive officer, VantageScore Solutions LLC

Bill Cosgrove, CMB, chief executive officer and owner, Union Home Mortgage

Corey Davis, senior vice president, national accounts, Arch Mortgage Insurance Co. (Arch Ml)

Glenda Gabriel, neighborhood lending executive, Bank of America Home Loans

Debbie Garcia-Gratacos, president and owner, DEVAL LLC

Cordelia Mitchell, vice president, human resources relationship manager, EverBank

Cathy Pharis, managing director and head of the Federal Housing Administration (FHA) platform, Wells Fargo Multifamily Capital (WFMC) and Wells Fargo Bank NA

Erik Richard, chairman and chief executive officer, Landmark Network Inc.

LaShandra Sartor, senior business consultant, director of business consulting, Quicken Loans Inc.

Sharyn Torrisi-Cartwright, vice president of human resources, Pulte Mortgage LLC

Cheryl Ttavis-Johnson, executive vice president and chief operating officer, VRM Mortgage Services

The Diversity and Inclusion Committee reports directly to MBA’s board of directors as a sign of the association’s serious commitment to diversity and inclusion issues.

Diversity and Inclusion Self-Assessment Tool

The Diversity and Inclusion Self-Assessment Tool was developed by VRM University (VRMU'”), the training division of Carrollton, Texas-based VRM Mortgage Services, with input from the Mortgage Bankers Association’s (MBA’s) Diversity and Inclusion Committee. It is designed to help MBA members assess their diversity and inclusion initiatives within the following four categories:

* Organizational commitment to diversity and inclusion;

* Workforce profile and employment practices;

* Procurement and business practices-supplier diversity; and

* Transparency and communication.

All information entered remains anonymous and neither MBA nor VRMU will collect company data from this tool.

The tool is intended for company self-assessment only, and enables companies to benchmark their compliance with the final Diversity and Inclusion Standards set by the Office of Minority and Women Inclusion (OMWI) directors from six federal agencies, as part of Section 342 of the Dodd-Frank Wall Street Reform and Consumer Protection Act.

“The self-assessment tool was easy to use. It helped our senior management team align on strategy and current-year initiatives to further our diversity and inclusion efforts. It is a very effective tool for facilitating the right dialogue among senior leaders,” says Debra W. Still, CMB, president and chief executive officer of Pulte Financial Services, Englewood, Colorado, and former chair of MBA’s Diversity and Inclusion Committee.

To access the tool, visit http:/

Minority* and women-owned businesses have been on the rise, with 8 million minority-owned firms and 9.9 million women-owned firms nationally.

Committee chair Lopez says his goal is “to provide leadership and guidance to support MBA’s efforts to help the industry gain a competitive advantage by increasing diversity in leadership, workforce and business partners.”

The implementation of diverse and inclusionary practices and policies requires a forward-looking strategy and commitment.

Katherine Tung is policy advisor for residential policy and member engagement, and Tamara King is vice president of residential policy and member engagement for the Mortgage Bankers Association (MBA) in Washington, D.C. They can be reached at and

Tamara King

Tamara King is vice president of residential policy and member engagement for the Mortgage Bankers Association (MBA). She has experience in mortgage finance, community development, and state and local governments. Previously, she was a senior business manager for manufactured housing in Fannie Mae’s single-family mortgage business. Other positions have included vice president of community development at HSBC Bank, director of the New Homes Program at the New York City Housing Partnership, senior project planner in the New York City Mayor’s Office of Operations and senior budget examiner in the New York State Department of the Budget, Tamara earned a Master of Public Policy degree from the School of Public Policy at the University of Michigan and a Bachelor of Arts degree in English literature with concentrations in public policy and African American studies from Swarthmore College.