Black entrepreneurs are aiming for a racial wealth gap by starting mortgage fintech

A fintech start-up company launching this Labor Day wants to eliminate the racial wealth and gaps in home ownership by helping its customers show lenders that even if they do not have a credit score to secure a mortgage, they have the cash flow.

Ashley D. Bell, founder and CEO of Ready Life, has hired Bernice A. King as head of fintech’s advisory board; she is a lawyer, minister and the youngest child of civil rights leaders Martin Luther King Jr. and Coretta Scott King. Bell currently works for the law firm Dentons as a senior adviser and was previously regional administrator for the U.S. Small Business Administration for Region IV, which covers most of the South.

Ready Life and Bell take a marketing approach to attract the customers they want to help – mainly blacks and others of color who feel cheated by the current lending system that prioritizes good credit when considering mortgage eligibility.

“If you have been denied credit for a home, if you feel that the current system is not built in a way that can be fair to you and your family, then we are an alternative,” Bell said of Ready Liv.

To reach this target demographic, Ready Life will sponsor this year’s Denny’s Orange Blossom Classic, a four-day celebration of historic black colleges and universities culminating in a nationally televised football game between Florida A&M and Jackson State on September 4.

“Bernice and I have invested in sports and entertainment because these industries make so much money on the communities we are trying to make,” Bell said of the marketing strategy. He added that the sponsorship would get Ready Life’s message of generational wealth “in front of a crowd that understands very thoroughly the historical disadvantages African Americans have had.”

Bell is behind two other sports deals that recently made headlines. In December 2020, the news came that a group of black-owned banks would refinance a major construction loan for the Atlanta Hawks, a team in the National Basketball Association. The National Black Bank Foundation, of which Bell is a general adviser and co-founder, put together the agreement. The foundation also put together a $ 25 million loan from a group of black banks to Major League Soccer earlier this year.

With their sponsorship of this year’s Labor Day weekend football game and follow-up campaigns, Bell said he hopes Ready Life can turn 100,000 tenants into homeowners. He said that most customers can expect that it will take three to nine months from the time they make their first rent payment through Ready Life to the first payment of the mortgage – a timeline that will vary according to individual circumstances.

Customers who open an account with Ready Life will receive a checking account and associated debit card which they will use to make payments – primarily rent and other housing expenses, but not limited to these. Ready Life is partnering with another fintech to offer this functionality: Figure, a company that uses blockchain technology for loan origins, equity management, private fund services, banking and payments.

According to a spokesman for the company, Figure Ready is the program manager and holds the money transfer licenses used for payments, and Primis Bank is Ready Life’s sponsor bank for the debit cards.

Figures’s CEO and CEO, Mike Cagney and June Ou, are both advisors for Ready Life, respectively, and their company provides the banking and payment infrastructure on which Ready Life will operate. An ensemble of high-profile black executives and fintech entrepreneurs have also been behind the project, including Van Jones (TV host and author) and Yolanda Daniel (vice president of finance at the Federal Reserve Bank of Chicago).

An insurance technology launched in September by Fannie Mae will also provide technical support to turn Ready Life customers’ rent payments into mortgage insurance feed. The system, Desktop Underwritermakes it possible for detached house lenders – with permission from mortgage applicants – to identify timely rent payment in the applicant’s bank statements to submit a credit rating.

“Credit history is a key element in evaluating a borrower’s ability to pay a mortgage, but less than 5% of tenants today have their rent payments reported on the credit bureau report, which puts many potential first-time home buyers at a disadvantage,” a press release from Fannie Mae announced. new system says.

According to Bell, Ready Life’s approach will offer a strong alternative to the traditional credit-based approach to mortgages. He said the company’s private equity partners will provide guarantees for the loans.

“We take into account the personal circumstances of each borrower, not an overall average, which is what the credit score is now,” Bell said. “It’s more personal banking.”

And at the heart of Bell’s efforts to deliver more personalized banking services is an attempt at racial and economic justice.

“In our country, we sometimes have a very acute focus on racial injustice, but we leave out the economic part,” Bell said. “You can not be in this fight for equality for all unless everyone has access to the benefits of being in the world’s largest country. It begins with the American dream, and everyone needs access to own a home. It should not just be for the upper half, which is what our credit system has created. “