Collaborating Across Networks as an Industry at Scale
The strategy of the Nationwide Mortgage Collaborative (NMC) is to connect the people, products, and process at scale. The NMC is a wholesale marketplace approach that combines the efficiency of technology and centralized services provided by Springboard CDFI, with the education and preparatory services of partner HUD-approved organizations, and other mortgage originating CDFIs accessing the full range of specialty & CRA loan products across the country.
Creating a marketplace of affordable first mortgages
The NMC has been developed with primary support from the Ford Foundation and Citi Community Development designed to significantly increase access to mortgage credit for low to moderate income and other underserved market segments. Powered by Springboard CDFI, a California-based 501(c)3 nonprofit mortgage bank & fulfillment platform, and guided by the Leadership Council made up of the top mortgage and homeownership focused non-profits across the country; the NMC will harness the new home buyer activities of hundreds of local nonprofit providers across the nation with the objective of creating predictable, sustainable, and scalable mortgage solutions. Our collaboration as an industry will rebuild the delivery system for low income and underserved borrowers & first time home-buyers nationally.
The Broken Delivery System
In the wake of the Great Recession, access to mortgage credit remains an unattainable goal for many first-time home buyers. This lack of access to mortgage credit is contributing to a growing divide in America of “have” and “have not” households by precluding many families from owning a home at a time when mortgage interest rates are affordable. The consequences are many. Lower income families cannot build net worth, and are forced to pay rent that often greatly exceeds the PITI costs for the very same homes. Neighborhoods hard hit by the crisis, and often where lower income and multicultural families live, don’t benefit from the stability and investment that comes with an increase in community stakeholders.
The reasons for this continuing dilemma are many – lack of borrower cash for down payment and closing costs, tight mortgage credit standards, new regulatory requirements regarding ability to repay and fair lending, fewer public subsidies, lack of lender expertise in affordable lending, hesitancy to make loans with perceived rep and warrant risk, and the high cost of originating atypical and sometimes complex high LTV, low value mortgages.
Relies on local relationships with few loan officers that often don’t have the time or incentive model for LMI borrowers or complex DPA loans.
- Banks struggle to manufacture LMI loans at a reasonable cost given the new regulations and niche market-based programs.
- CRA motivated investors and the CDFIs & other originators of those loan products don’t exist in all areas of the country – with Mortgage Brokers having been all-but regulated-out of the industry.
- Borrowers with loans less than $100K struggle to find any lender willing to assist them with a loan, and minority communities devastated by the foreclosure crisis remain the least served.
The Nationwide Mortgage Collaborative is working closely with nonprofit partners to:
- Increase access to capital for nonprofit mortgage lending
- Provide state-of-the-art technology solutions to streamline the lending & application process
- Offer a dedicated team for back-office processing & underwriting
- Aggregate loan originations in order to generate scale that attracts the participation of top lendersand secondary market buyers
Individual nonprofit providers typically cannot generate a sufficient volume of mortgage originations to cover costs or to garner the attention of the mortgage lending industry. By aggregating loan originations, we will be able to ensure consistency of loan quality, standardize loan processing and underwriting, and bundle loans for interested CRA lenders or for sale to the secondary market. Local nonprofit providers will provide the sourcing, home buyer education and counseling, initial processing and document collection, and other consumer-facing lender assistance.
Importantly, the Nationwide Mortgage Collaborative will accommodate the full range of mortgage products used locally, reflecting the diversity of market needs across the nation. A one-size-fits-all approach simply will not work, inevitably straight-jacketing local nonprofit goals and product offerings.
Nationwide Mortgage Collaborative partners will receive tools, technology, and technical assistance to grow and best deliver their homeownership programs:
- Customer facing mortgage readiness triage tool
- Partner-branded web-based technology solutions
- Loan program pricing and decision engine with a full marketplace of competitively priced program options
- Promotion of local Down Payment Assistance programs applicable to client, with complimentary e-loan-file
- Client and Partner facing pipeline and loan process management dashboards
- If Needed/Applicable: Back-office/Outsourced Processing & Underwriting services on an affordable per loan fee basis