with eyes open wide
Have you heard of Bruce Marks? He is the CEO of Neighborhood Assistance Corporation of America, a non-profit lending organization focused on lending to homeowners who banks now won’t even consider.
KNOW him because he’s doing big and important things!
His organization is kind of a big deal. They have $10 billion in funding from Bank of America to “make loans on its own terms over the next decade.” (NY Times, link below)
Their goal is to show that it is possible to lend to lower-income borrowers on terms that are profitable and sustainable.
You are probably asking, how does he manage risk? And that’s probably the most brilliantly simple part of his organization. He’s putting trust back onto the borrower and creating a lending community. They carefully screen applicants, requires them to join the nonprofit with a $20 annual fee, and requires that they participate in advocacy for the organization. Also important is creating a hardship fund to provide a safety net instead of requiring that individual borrowers purchase an insurance policy.
Check out how they have been successful and what hurdles they still have ahead in this NY Times article: