Promontory MortgagePath, a mortgage fulfillment service provider, has announced the first two participants in a partnership program with minority-owned banks and credit unions seeking to expand homeownership opportunities in the communities they serve.
Homeownership is often presented as a way to reduce the wealth gap between minorities and whites. A recent study by Zillow found that the typical black household has only 23% of wealth owned by a typical white household, and low levels of homeownership accounted for 49% of this gap.
Industrial Bank, a Washington DC-based community development financial institution, was integrated and began offering mortgages through the Promontory MortgagePath Platform in April. The bank also has branches in New Jersey and New York.
The other participant, Optus Bank, based in Columbia, South Carolina, which holds both the minority depository institution and CDFI designations, is in the process of being implemented.
“We strive to create wealth for all clients, with a special focus on those affected by the legacy of 400 years of exploitation and racism,” said the President and CEO of Optus Bank, Dominik Mjartan, in the press release. “With Promontory MortgagePath, our goal of creating $ 100 million in black wealth over the next 10 years is more achievable.”
Promontory MortgagePath presented the program last October. At that time, the Danbury, Connecticut-based company noted that there were more than 1,100 certified CDFIs which managed approximately $ 222 billion in assets. In addition, of the more than 5,400 federally insured financial institutions in the country, 149 are minority deposit-taking institutions.
“These community-driven financial institutions are the cornerstone of wealth building opportunities for the clients they serve,” said Gene Ludwig, CEO of Promontory MortgagePath and former Comptroller of the Currency in the Clinton administration in the latest report. ad. “CDFIs and MDIs are an essential part of solving major societal problems – from unemployment to stagnant wages – that so many communities face. These problems are more acute for Americans of color.”
The program provides institutions with exclusive prizes, resources and joint marketing activities with the aim of reducing the barriers that prevent them from participating in mortgages and doing so profitably, the company said.