Digital Mortgage Co. Launching Spanish-Speaking Loan Experience

Digital mortgage lender Beeline Loans Inc., known for its online portal and AI-powered chatbot connecting with consumers, announced it is launching a Spanish-speaking home loan experience on May 1.

"Colmena," Spanish for "Hive," hopes to reach the 60 million people in the United States who prefer to speak Spanish to meet the unique challenges faced by Latino families in accessing affordable housing and navigating the mortgage system.

"At Beeline, we believe that homeownership should be within reach for all Americans, regardless of background or ethnicity," said Beeline Chief Executive Officer Nick Liuzza. "The launch of Colmena underscores our dedication to making a meaningful difference in the lives of Latino families and fostering greater financial inclusion."

According to Beeline, its platform is "a radically new way to apply, like five steps in 15 minutes radical. Do it from the sofa even."

It believes that this digital approach to conventional mortgage lending will increase engagement with young people who have been hesitant to buy homes in recent years, and now it wants to target possible Latino homeowners.

The company's chatbot, named Bob, is available 24 hours a day and is capable of answering complex questions. Based on these conversations, it will provide the customer with a personalized quote. A representative of the company stated that the chatbot "poses highly personalized product-specific questions to generate a quote in real-time."

Bob already speaks Spanish when prompted, but the next version will instantly detect the language of the caller and give faster, more accurate answers. Colmena users will automatically be routed to a bilingual loan officer to guide them through the process.

"Colmena will feature tailored mortgage products that are culturally aligned to address the specific needs and preferences of Latino homebuyers, plus educational resources to promote homeownership and empower individuals and families to achieve their dreams of owning a home," said Miguel Vega, who is spearheading the initiative for the company.

"A mortgage is no candy bar purchase," Vega noted. "It's a life-changing, potentially scary transaction for anybody, so the ability to transact in one's preferred language and do so in a culturally sensitive way is very important, even if someone's English is excellent."

Vega has 25 years' experience an U.S. Hispanic market consultation and is a National Affordable Housing advocate of Mexican-Texan heritage himself, the company said.

The Catalyst: A Growing Population in the Housing Market

Mortgage rates have surged recently, climbing to a four-month high last week, on expectations that the Federal Reserve will hold off on cutting interest rates in the near-term, according to MarketWatch.

The rates have gone up for three weeks in a row, rising to their highest level since November 2023, the research firm said.

Contract rates on 30-year fixed mortgages rose 12 basis points to 7.13% in the week ended April 12, according to Mortgage Bankers Association data, Bloomberg reported. The effective rate, which includes fees and compound interest, increased to 7.32%.

"Despite the pickup in borrowing costs, purchase activity stabilized last week," wrote Bloomberg's Vince Golle. "The group’s index of mortgage applications for home purchases increased 5%, representing just the first gain in five weeks. Mortgage rates are at risk of rising further based on the 10-year Treasury yield that now stands at the highest since November."

According to a report by UNIDOS U.S., the largest Latino civil rights organization in the country, Hispanic Americans represent a growing population in the housing market and are projected to make up 40% of new households and half of new homeowners in the coming decade.

But "data from the Home Mortgage Disclosure Act (HMDA) paints an uncertain picture of how Latinos will keep pace in the future mortgage market," the report noted.

It said the mortgage denial rate for Latinos decreased after the Great Recession, from 29.5% in 2007 to 13.3% in 2017.

"Yet, Latinos were still more likely to be denied a mortgage than Whites: the denial rate for Whites was 8.8%," the report said. Reasons included issues with their debt-to-income ratio (DTI) and credit history, as well as a lack of collateral.

"The future of the housing market will depend on the ability of eligible individuals in often-

excluded groups to obtain an affordable mortgage to buy a home. To ensure that the market is serving those individuals, the entities issuing mortgages need to release comprehensive information about their mortgage lending practices," the UNIDOS report said.

A recent analysis of mortgage and census data in New York found that white households in the state were more than twice as likely as Blacks or Latinos to own their own homes, the Rochester Democrat and Chronicle Reported.

Making Ownership More Accessible

Some other companies are trying to bridge the gap, such as Cross Country Mortgage, which last year launched a new Spanish loan application program. And in 2022, Bank of America created the Community Affordable Home Solution with special credit guidelines and a bank-provided down payment. Latino-owned New American Funding is trying to help more minorities get through red tape and into homes.

The National Association of Hispanic Real Estate Professionals puts out an annual "Top 250 Latino Mortgage Originators" report on the top individual Hispanic originators in the U.S.

One company, loanDepot, noted last year that it had placed 37 agents on the list. The company also noted it has a Spanish-language loan application form.

However, Beeline's Colmena goes beyond those programs and offers a unique "Spanish customer journey" through the process of using Beeline's platform.

"Oftentimes Latino home buyers don't realize how easy it is," Vega said of buying a home. "It's a popular belief that you need 20% down and a FICO of 800 to be in the home ownership game. It's our job to educate Latinos that their dream is a lot closer than they think — which goes to the heart of what Beeline is."

The company has stated that it offers a variety of options, including refinancing, to consumers through the digital platform. Beeline has built its premise on making homeownership more accessible to a wider, more diverse market, making it an attractive prospect if mortgage rates continue to fall.

Beeline Loans is a private company, and the company reports that its largest shareholder is founder Nick Liuzza. According to Beeline, it has invested US$40 million in the company. It reports that the Cavalry Investment Fund, Atalaya, and Ellington have made significant investments in the company.