Latinos are great at saving money, but that's caused a surprising problem: they can't get mortgage loans.
One out of every 5 mortgage applications by Latinos are denied, which is twice the rate that non-Hispanics can't get a loan.
That's in part because lenders rely heavily on credit scores to make their decisions, and Latinos don't build up a good score when they avoid credit cards in favor of cash built up in their savings.
"We have so many of them that are credit invisible," says Richard Green, director and chair of the Lusk Center for Real Estate at USC and formerly with the U.S. Department of Housing and Urban Development. "They don't have a credit score at all."
He adds, "They are uncomfortable with the idea of credit, but ironically in the U.S., in order to get credit you have to use credit."
Green specifically points out Latinos in his research because they are a booming demographic – there are currently 55 million in the U.S.
"It's not unique to Latinos," he says. "If you look at other cultures, debt is just considered a bad thing. It's as if there's something morally wrong with you."
Lenders will miss out on these new customers if they don't update their formulas, he argues.
"They're reluctant to do anything creative to bring into the market people that are very good credit risks," says Green.
He advocates that banks develop new ways to examine a person's reliability, perhaps by assessing their past history with paying rent and utilities on time, having a steady job or calculating how much they currently have saved.
"You could bring millions, if not tens of millions, of people into the mortgage market if you did that," he says.