Elevating Impact Investing
BY Preserving COMMUNITIES and Homeownership, renewity goes beyond what banks and financial institutions are capable of with their residential mortgages in arrears.
Transformative finance is possible.
Our Mission
we are more than 0ur data. worthiness is more than our credit.
Investor ownership tends to hurt local housing markets as homes purchased by investors are treated as assets from which to profit. The practice of scooping up single-family homes just to rent them out is driving up the price of homes and rent, creating an increasingly unsustainable and continued housing shortage.
Recently, many financial initiatives have been developed for underserved communities to have greater access to residential mortgages. As much as these efforts are needed, they have largely been focused on the “front end” - expanding access. However, when it comes to homeowners who are late in their mortgage payments, there are not many options besides foreclosure. This is what we refer to as the “back end” of the problem, which almost no one is working on at a systemic scale.
At RENEWITY, we do the work that financial institutions are not set up for. We purchase non-performing pools from US financial institutions and work with homeowners in modifying these mortgages thereby helping decrease the chances of default while reducing a family’s debt load, decreasing neighborhood blight and preserving generational wealth.
We’ve even created our own in-house “RENEW” credit score - that is outside of the three major agencies and the FICO score - which fairly accesses an individual complete financial picture. Our AI/ML platform is actively managed and is third-party audited for algorithmic racism and data capitalism.
US Institutions we work with
BANKS
Whether the bank is a local, mid, D-SIB or G-SIB level - we provide a way to handle non-accrual mortgages. The flip side of the housing market boom is that many originators are contending with homeowners and their loans that are in arrears. We work with asset managers to purchase before going down the expensive road of foreclosure and eventually in the REO pool.
GSE
Government-Sponsored Entities such as The Federal Housing Finance Agency (FHFA) requires sales of nonperforming loans (NPLs) by Freddie Mac and Fannie Mae (the Enterprises) to meet specific requirements. Much of this is through the auction process. Unfortunately, many winning bidders are vulture-like PE funds that prioritize shareholders’ profit over community impact and whose ultimate goal is to reclaim the assets through foreclosure to eventually create a renters market.
Credit unions
Credit unions are also affected. Although they are not-for-profit and are owned by their members, over 120 million Americans belong to one. Even if the goal is to keep fees low, the stress on capital ratios from non-accruing mortgages are still affecting balance sheets.
FHA/HUD
The Federal Housing Administration (FHA) provides loans to help borrowers with low to moderate incomes. They insure nearly 8 million mortgages and can be said to be the backbone that allows for many to be homeowners. Recent reports indicate that the delinquency rate of its mortgages rose to 17.5% in February 2021 and exceeded 20% in 30 of the 169 largest MSAs.
renewity and your institution
About 23 percent of households in forbearance said they did not know whether they will have to make an increased monthly payment or a lump-sum payment to their mortgage servicer once forbearance ends. Fifty-four percent of households said they have no or slight confidence that they will be able to resume monthly payments when forbearance ends.
Most homeowners confuse or conflate forbearance and deferment, which will undoubtedly affect any repayment plan.
Since mortgages held on bank portfolios are generally subject to a 50% risk weight (4% capital requirement) and when they become 90 days delinquent, the risk weight rises to 100% - all adding stress to your capital adequacy ratios.
an equitable, modern and connected approach
AI/ML
For us, AI/ML will never replace the human component. Using machine learning to enhance our processes, we believe when creating our algorithms, to follow the research provided by The AI Now Institute. They are an interdisciplinary research center dedicated to understanding the social implications of artificial intelligence. Since data reflects the social, historical, and political conditions in which it was created, AI systems ‘learn’ based on the data they are given. This, along with many other factors, can lead to biased, inaccurate, and unfair outcomes. AI Now researches issues of fairness, looking at how bias is defined and by whom, and the different impacts of AI and related technologies on diverse populations.
Blockchain
Security Tokens are becoming increasingly popular for RWA (Real World Assets), as interest from institutional and venture capital to family offices and fund managers grows. Critically, the features of blockchain enable the programmatic enforcement of many features within the securities industry that reduce friction through the use of transfer restrictions, lock-up periods, and dividend distributions. Each token standard used to effectuate tokenized securities, however, comes with its own set of unique benefits and opportunities, as well as limitations. We are currently evaluating partner networks that facilitate the establishment of an ecosystem that garners participation amongst financial functions including asset originators, fund managers, servicers, banks, and investors.
people
The one thing in common in any company is people. From the people we employ, the clients we serve to the homeowners we aim to help, we believe it’s all connected. One way is how credit is reported currently. Credit reporting is one of the many economic systems that dictate the rules and limit the life choices of Americans. At Demos Institute, they propose establishing a public credit registry (also known as a public credit reporting agency) that will put equity at the center of its decision-making. Demos’ plan for a public credit registry includes mechanisms for consumers to hold the agency itself accountable for providing full and accurate information, resolving disputes efficiently, and protecting the security of consumer data. It is also why we created our own credit rating - the RENEW Score.
IMPACT is our ethos
Our goal of bringing actionable impact principles to our homeowners, communities, financial institutions, and investors - is what makes us different. It allows us to operate from a completely different vantage point from others. Learn more about the groups we work with and the framework we follow.
your financial institution can make a difference
Many US homeowners are under the pressure of catching up on mortgage payments now that the moratorium has been lifted. See how working with us can help without harming homeowners or neighborhoods.
Ready to take action?
Let’s take the first step in making a difference. Reach out to us and one of our asset managers will be in touch.
“do no harm” should be applied to not just physicians but all banking professionals.
— the Fiduciary way
get in touch
RENEWITY, INC.
3050 Post Oak Blvd. Ste. 1350
Houston, TX 77056
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