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About Us

Authentic, passionate, and mission-driven, we have the governance and structure in place to serve all borrowers safely and soundly for decades to come.

OUR MISSION

Giving credit to the American Dream.

The Capital Corps, LLC empowers diverse small businesses, entrepreneurs and homeowners to pursue their dreams by expanding access to prime capital for non-traditional borrowers.

Our goal is to reshape lending to be more impactful to underserved communities with better risk adjusted returns for banks. We are well on our way and this gives us great pride.

We serve non-traditional prime borrowers by returning to more traditional methods of underwriting residential real estate focusing on the 5-C’s of credit – including a borrower’s character. In our credit decisions, we place special emphasis on the borrower’s character as opposed to narrow service-bureau-driven credit analytics deployed by banks during the recent credit crisis. Along with the National Diversity Coalition (NDC), we partner with banks who wish to promote community development goals through lending to underserved communities including low income, borrowers with limited access to capital including African-Americans, Hispanics, underserved Asian populations, women-only borrowers, and borrowers with limited relevant credit histories. Our Community Advisory Board ensures our lending programs appropriately reflect the needs of all communities we serve.

Background

Following the 2009 recession, Congress passed the Dodd-Frank Act to reform the financial system including to establish the Consumer Financial Protection Bureau (the “CFPB”). In 2013, the CFPB implemented Regulation Z, Truth in Lending, which sought to prevent predatory lending and to ensure lenders had a reasonable expectation of repayment by each borrower at the time a mortgage loan was made.

The rate of homeownership has seen a material decline from its peak in 2008, as lenders have tightened lending underwriting standards to conform to Regulation Z, making more sound credit decisions and eliminating potentially predatory lending practices. While much of this decline in homeownership was an appropriate result of more prudent lending, the CFPB recognized that Regulation Z had the risk of reducing financing for credit-worthy borrowers in need of non-traditional underwriting methods. To do so they provided certain exemptions to organizations including CDFIs to enable thoughtful approaches to providing access to capital to these credit-worthy, underbanked borrowers. In fact, the rate of homeownership now stands several percent below its long-term average homeownership rates during the decade preceding the recent real estate bubble and great recession.
This reflects a potential reduction in lending to homeowners of approximately $100 billion annually below the long-term averages.

According to The Urban Institute, the tightening of the mainstream mortgage market since the recession prevented 5.2 million mortgages between 2009 and 2014. As the market looks to responsibly expand access to credit, special considerations should be provided for groups that are underbanked to help bridge them into the standard banking system.

Community Development Financial Institutions have attempted to close the gap in lending to these underserved communities but have not historically had the financial resources to meet the size of the challenge. For instance, California based non-bank CDFI’s made less than $2 billion in total home loans in 2016, most of which were loans made to be sold to third parties pursuant to U.S. Government and Agency programs (e.g., Fannie Mae, Freddie Mac, and FHA). This has left unaddressed the needs of a significant population of borrowers who do not fit within the narrow confines of these programs. We, along with our partner the NDC, believe that many of these borrowers are prime credits requiring loans with low loan-to-values (the loan-to-value measures the amount of the loan in comparison to the value of the house being financed).

There exists significant unmet demand in California and nationally from underbanked, minority and women borrowers for low LTV, prime mortgage loans. This need can be met in a sound and prudent manner.