For Americans with limited English proficiency (LEP), obtaining a mortgage can be a major challenge due to language barriers, procedural complexity, and a large number of documents that need to be understood. there is. There is currently no federal requirement to provide mortgage-related documents or disclosures in languages other than English. Even though there is no set requirement, lenders are recognizing the benefits of providing translated documents, especially in Spanish.
by Migration Policy Research Institutethere are more than 25 million people with LEP, representing 9% of the U.S. population, and many of them are ready and willing to become homeowners. National Association of Hispanic Real Estate Professionals (NAHREP) estimates that in 2022, approximately 8 million Latinos under the age of 45 will be ready for a mortgage, and 2.8 million will be nearly ready for a mortgage. . Additionally, the homeownership rate for Hispanics has been steadily increasing in recent years, recently reaching 49%. urban research instituteLatinos will account for 70% of the growth in homeownership over the next 20 years.
Given the market potential of future Spanish-speaking homeowners and the increasing pressure from industry and government to increase services for the LEP population, we are focusing on how financial institutions We spoke to Wolters Kluwer LEP expert Crystal Coker to shed some light on where to go. And servicers should know.
Why should lenders invest in translation resources?
Coker: The data and numbers confirm that great opportunities exist not only for America’s Spanish-speaking population, but also for other LEP consumers who may be prime candidates for mortgage financing. . More and more lenders are researching this issue and making plans to offer translations of documents and content. Not only is this the right thing to do from a customer service perspective, it also makes business sense, especially for lenders looking to attract new customers in a tight lending environment. And if improving customer service and attracting new customers aren’t reason enough, most industry observers expect this requirement to eventually be enforced by law or regulation.
The Consumer Financial Protection Bureau (CFPB), Federal Housing Finance Agency (FHFA), Fannie Mae, and Freddie Mac are all encouraging financial institutions to offer more services in languages other than English. Specifically, the CFPB recommends that financial institutions provide consumers with clear and timely disclosures explaining the scope and limitations of translation services. FHFA provides a model for language translation disclosure. And GSE introduced a document called the Supplemental Consumer Information Form that allows consumers to indicate their language preferences. Initially optional, the Supplemental Consumer Information Form is now required for loans with application dates on or after March 1, 2023 for transactions sold to Fannie and Freddie on the secondary market. But for many lenders, once a consumer confirms their language preference, the question is what to do with that information.
Within a few years, the CFPB may identify as many as eight target languages to be supported in translated mortgage and loan documents based on U.S. Census trends. If you look at the census data, of course Spanish is number one, but if you drill down to the states, Chinese, Korean, Tagalog, Vietnamese, etc., depending on where the lender operates and how big it is. , translations into other languages may also be required. other languages.
How is Wolters Kluwer helping customers meet their growing needs for translation services?
Coker: Our Expere® language translation solution uses artificial intelligence (AI) and machine learning (ML), combined with our language and compliance experts, to deliver highly accurate and scalable translation capabilities for financial documents. A translation system. Because we’ve been in this endeavor for over five years, we offer uniquely curated and customized document templates, dictionaries, and even a complete customer-specific library, including documents that are not only compliant but also meet your own specifications. I was able to create . of private lenders.
What are the potential pitfalls that financiers can face when tackling language translation?
Coker: Translating nuanced legal and financial documents for non-native English speakers is expensive, time-consuming, and prone to human error. Most financial institutions don’t have in-house translation services, and even if they do have Spanish-speaking employees, they don’t have enough to provide the nuanced translation services needed. It also doesn’t address the human error that can occur. That’s why leveraging AI and ML technologies in the process is so important. But relying solely on AI and ML is also not the answer. As such, we also rely on the expertise of specialized language and compliance experts who can complement and modify what is generated from AI.
Specifically, how does the Expere language translation process work?
Coker: This process begins with our proprietary compliance dictionary, which has been carefully curated over time with content from the CFPB, Fannie, and Freddie, and is continually updated and maintained. Our translation workbench uses AI to provide initial translations. It also incorporates custom ML algorithms built from previous translations and modifications to those translations to produce more accurate results in the future.
Documents are then reviewed by bilingual experts who work closely with bilingual compliance professionals, giving them the contextual expertise to accept or reject the AI-provided translation. Translations verified by our team of experts are stored in Wolters Kluwer’s translation hub, improving the continued accuracy and efficient delivery of future translations. The integrated all-in-one translation process is part of an automated document creation workflow that enables Wolters Kluwer to deliver translations quickly and efficiently without sacrificing accuracy.
Interestingly, when Wolters Kluwer first launched its translation services in 2018, approximately 80% of translations were manual and 20% were assisted by AI or ML. Today, that has reversed, with around 96% of translations delivered via AI/ML and only 4% manual translation. This proves how much the machine has learned over time to improve its overall output.
Are all the documents that lenders need translated nearly the same?
Coker: Not at all. It is important to understand that the Expere platform publishes content revisions on a monthly basis. This means that each lender may be using a different version based on when they started using that version. As a result, each lender has its own library of translated content, including standard uniform instrument-based documents as well as documents customized to the lender’s specifications. As new translations occur, the content of that lender’s library is updated.
Learn more about Expere language translation services.