GEORGE DEMELLO Loans ‘fit our culture’
Residents might be high-tailing it out of the Bay State, but one bank has counted on immigrants to raise its sales – and win awards.
Bank of Canton loaned more of MassHousing’s two affordable mortgage products – MassAdvantage and Fannie Mae’s MyCommunity mortgage – to non-white borrowers than any Bay State lender in both 2006 and 2007, the agency said.
In doing so, the $875 million bank has earned MassHousing’s Achievement Award for Minority Lending for the second year in a row.
The achievement comes through deliberate planning – and the fact that MassHousing’s products work for borrowers, said Bank of Canton’s Senior Vice President for Mortgage Lending George M. DeMello.
“It’s just a really good product for the consumer, so we focus on it,” he said.
DeMello said he was struck by 2005 U.S. Census estimates that showed Massachusetts was the only state to lose population two years in a row – between 2003 and 2005. The report sug-gested that immigrants would be one of the few growing segments of the state’s population going forward.
“I recognized that as a business opportunity,” DeMello said. “And it fit our culture well because we had lots of first-time homebuyers” who make up a majority of MassHousing borrowers.
Soon after DeMello heard about the report, Bank of Canton began hiring mortgage loan officers who speak Portuguese, Chinese, Vietnamese, French, Haitian Creole and Spanish – lan-guages spoken in many of the communities it serves.
According to the Metropolitan Area Planning Council, the three South Shore communities that have seen significant increases in minority population since 1990 are Quincy, Randolph and Brockton. Bank of Canton has branches in two of those communities – Quincy and Randolph – and in Hyannis, Canton and Brookline.
In 2006 and 2007, most of its loans to minorities were issued in Quincy.
Changing Nature
Thomas Callahan, executive director of the Massachusetts Affordable Housing Alliance (MAHA), said it’s impressive that Bank of Canton made more loans to minorities, given many of its branches are in suburban areas with predominantly white populations.
“The fact that they serve as high a number of minority borrowers as they do [must be] reflective of the changing nature of these communities” – and the bank’s ability to adapt, he said.
“There are examples of banks that didn’t adapt to changing communities, and became dinosaurs,” Callahan said.
Since 2006, Bank of Canton has also partnered with MassHousing to make mortgage loans through brokers. As a result, last year, about 40 percent of its MassHousing loans came from out-side its market area. In fact, in both 2006 and 2007, Boston was one of its top-three MassHousing lending areas.
Some observers expressed surprise that a local – as opposed to regional or national – bank would earn a statewide award for minority lending.
Jim Campen, author of an annual report on mortgage lending patterns in Greater Boston and Executive Director of Boston-based Americans for Fairness in Lending, said the relatively small number of loans that put Bank of Canton in that position suggests to him that “the overall volume of MassHousing lending isn’t that high.”
MassHousing issued a total of 2,242 mortgage loans in 2007.
Bank of America is the state’s largest producer of SoftSecond Mortgage loans, a bank spokesman said. The SoftSecond mortgage is a state-subsidized, second mortgage loan product that, like MassHousing products, is aimed at low-income borrowers.
About 50 percent of those loans go to minority borrowers statewide. In 2007, 1,087 total SoftSecond loans were issued.
Bank of America also offers loan products from MassHousing and ACORN (Association of Community Organizations for Reform Now) as well as its own products targeted at low- and moder-ate-income buyers, the spokesman said.
SoftSecond mortgages are offered mostly to borrowers with incomes of 80 percent of the area median or below, while MassHousing products allow the borrower to earn up to 135 percent of the area median.
Regional banks Sovereign, Citizens, and Bank of America, along with locally based Eastern Bank and Boston Private Bank, are the state’s top issuers of SoftSecond loans.
