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The Latest from and about Commerce Home Mortgage

We like to share the most recent news about the mortgage industry, our customers, and sometimes, ourselves. Stop back here for updates.

  • Founders Steven Sugarman and Faith Bautista announced today the launch of The Capital Corps, LLC (“The Capital Corps”), a California based financial institution focused on providing access to capital to diverse homeowners and small businesses, including those with non-traditional prime credit needs currently unserved by banks and traditional financial institutions. Mr. Sugarman and Ms. Bautista will be joined by co-Founder Jeffrey Seabold and an experienced team of bankers and lenders to serve this marketplace.

    • Prime lender to expand access to capital for homeowners and small businesses, including those with non-traditional credit needs unable to borrow directly from banks.

    • Announces leadership team led by former Banc of California executives Steven Sugarman (Founder, Chairman, CEO), Jeffrey Seabold (co-Founder, Vice-Chairman, Chief Banking Officer), Paul Simmons (Chief Credit Officer), Thedora Nickel (Chief Administrative Officer), Janet Hargreaves (Management Information Systems), and Raquel Gillett (Financial Controls).

    • Announces community advisory board led by Faith Bautista (CEO, National Diversity Coalition (“NDC”) and National Asian American Coalition (“NAAC”)), Jin Sung (Chair, NDC), Jeff Lim (Co-Chair, NAAC), Pastor Mark Whitlock (COR AME Church), and Gil Vasquez (Chair, Los Angeles Latino Chamber of Commerce).

    LOS ANGELES--()--Founders Steven Sugarman and Faith Bautista announced today the launch of The Capital Corps, LLC (“The Capital Corps”), a California based financial institution focused on providing access to capital to diverse homeowners and small businesses, including those with non-traditional prime credit needs currently unserved by banks and traditional financial institutions. Mr. Sugarman and Ms. Bautista will be joined by co-Founder Jeffrey Seabold and an experienced team of bankers and lenders to serve this marketplace. Additionally, The Capital Corps made the following announcements today:

    • The Capital Corps has formed strategic partnerships with the National Diversity Coalition and the National Asian American Coalition to expand the reach of its programs and ensure the programs are appropriately tailored to the needs of their members.
    • The Capital Corps has appointed Faith Bautista as Chair of its Community Advisory Board and named Jin Sung, Jeff Lim, Pastor Mark Whitlock and Gil Vasquez founding members.
       

    “The launch of The Capital Corps is the realization of a commitment I was proud to announce alongside President Clinton, Mayor Villaraigosa, and the California Reinvestment Coalition in 2015. We pledged to collaborate with community leaders to create a lending platform focused on providing access to capital to credit-worthy borrowers who need it most. Our goal was to reshape lending under the Community Reinvestment Act to be more impactful to underserved communities with better risk adjusted returns for banks. It gives me great pride today to make good on that commitment.” Said Mr. Sugarman.

    Mr. Seabold stated, “The Capital Corps will focus on ensuring its lending platform is scalable, financially strong and the leader in non-traditional prime lending. We seek to meaningfully expand access to capital to the over $100 billion of diverse borrowers that are currently unserved by banks.”

    To ensure The Capital Corps has robust financial strength and stability, we will seek certification as a community development financial institution by the U.S. Department of Treasury and membership with the Federal Home Loan Bank of San Francisco.

    Mr. Sugarman continued, “Employees, borrowers, and the diverse communities we serve must know that their lenders will be there to finance their homes and businesses during all seasons and all cycles, and will not cut and run over short term pressures. The Capital Corps team has demonstrated their commitment to the communities we serve over the long haul. We have set up our governance and structure to maximize our ability to serve all borrowers safely and soundly for decades to come. We couldn’t be more excited to be recruiting partners – capital, community, employee, and strategic – who are authentic, passionate, and mission-driven.”

    Founder Faith Bautista, Chief Executive Officer of the National Diversity Coalition, remarked: “I have worked for years to find ways to encourage hundreds of banks to expand their community development efforts to low income and minority communities that are left out of the system. Steven Sugarman was the rare bank CEO who found innovative ways to help our members while ensuring his bank was protected and profitable. That is why he was the first banker who earned the National Diversity Coalition’s highest honor: The Giraffe Award. The award is given to the person willing to stick their neck out for the benefit of doing the right thing for the community. He has the integrity, community commitment, and financial experience that we need. We are grateful to partner with Steven and his team for the benefit of the diverse borrowers who are currently left underserved by traditional banks.”

    Jeff Lim, CEO of Island Pacific Supermarkets and Co-Chair of NAAC, stated “Mr. Sugarman and Mr. Seabold helped me grow Island Pacific into the second largest Filipino supermarket in the country through their lending, advise and support. I am thrilled to partner with them to expand access to capital to the next generation of minority owned businesses and entrepreneurs, and to attract capital and build operations in a sound, scalable way.”

    In order to ensure that The Capital Corps appropriately meets the evolving needs of the diverse borrowers and communities it serves, it has launched a Community Advisory Board that will provide oversight and advice relating to portfolio lending programs, servicing strategies, and client acquisition and outreach.

    The Capital Corps will 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 its credit decisions, The Capital Corps will 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. The Capital Corps will partner with banks who wish to promote community development goals through lending to underserved communities including low income individuals and communities, borrowers with limited access to capital including African-Americans, Hispanics, underserved Asian populations, women-only borrowers, and borrowers with limited relevant credit histories.

    About The Capital Corps, LLC

    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. The Capital Corps focuses on lending secured by residential real estate and provides credit counseling services to its borrowers. The Capital Corps has partnerships with the National Diversity Coalition and the National Asian American Coalition and community leaders to actively participate in the lending process through their Community Advisory Board to ensure its lending programs appropriately reflect the needs of the communities it serves. The Capital Corps’ team is led by its Founders Steven Sugarman and Faith Bautista and co-Founder Jeffrey Seabold. For more information: http://www.thecapitalcorps.com

    About The National Diversity Coalition

    The National Diversity Coalition is an official 501(c)(3) tax-exempt organization which is comprised of community organizers, faith-based leaders, nonprofit directors, and business owners working collectively for greater financial equality and empowerment for underserved groups. Together we work with corporate and government leaders to advocate for greater opportunities in homeownership, small business, and financial literacy for all people. For more informationhttp://www.nationaldiversitycoalition.org

  • Commerce Home Mortgage (“CHM”) announced today that it has closed a strategic investment from The Capital Corps, LLC (“The Capital Corps”) a California based financial institution led by former Banc of California Founder Steven Sugarman and National Diversity Coalition Chief Executive Officer Faith Bautista. As part of the transaction, the Capital Corps’ Founder Steven Sugarman and co-founder Jeffrey Seabold have joined the Board of CHM. Mario De Tomasi, Chief Executive Officer of CHM, stated “CHM has made significant investments in its infrastructure to enable it to scale its retail business over the next several years.

    – The Capital Corps closes strategic investment into Commerce Home Mortgage to further joint mission of expanding access to capital for diverse homeowners.

    – The Capital Corps’ Founder Steven Sugarman and co-Founder Jeffrey Seabold join Board of Commerce Home Mortgage. Commerce Home Mortgage CEO Mario De Tomasi joins executive team of The Capital Corps.

    NOVEMBER 7, 2017 (IRVINE, CA) Commerce Home Mortgage (“CHM”) announced today that it has closed a strategic investment from The Capital Corps, LLC (“The Capital Corps”) a California based financial institution led by former Banc of California Founder Steven Sugarman and National Diversity Coalition Chief Executive Officer Faith Bautista. As part of the transaction, the Capital Corps’ Founder Steven Sugarman and co-founder Jeffrey Seabold have joined the Board of CHM. Mario De Tomasi, Chief Executive Officer of CHM, stated “CHM has made significant investments in its infrastructure to enable it to scale its retail business over the next several years. Today is the perfect time to partner with Steve, Jeff, and their colleagues. This deal will enable CHM to grow its business more quickly and prudently and to better serve its borrowers. We are also thrilled to work with Faith Bautista and the National Diversity Coalition to ensure we finance the dreams of all of America’s diverse populations.” CHM, which was founded in 1993 and is headquartered in California, is licensed to lend in 26 states through its 25 retail offices and its wholesale channel. CHM CEO Mario De Tomasi will continue in his current role as well as assume an executive role at Capital Corps as part of the transaction. Mr. De Tomasi and CHM Founder Scott Simonich have also become strategic investors in The Capital Corps. “We are thrilled to work with the team at Commerce Home Mortgage. Their values, commitment and platform are enabling the CHM to be a compelling lender that works for its employees, borrowers and partners,” said Sugarman, “I look forward to helping expand the platform to include proprietary products and to help CHM better serve the needs of their borrowers.” Jeffrey Seabold continued “I have been impressed with Commerce Home Mortgage for quite some time and am excited to join their Board. I look forward to helping CHM ensure it is recognized as the home for the best brokers, originators, and partners in the industry.” The Capital Corps’ will offer proprietary lending products through Commerce Home Mortgage that focus on expanding homeownership for non-traditional prime borrowers currently unserved by banks and traditional lenders. These programs are expected to launch during the first quarter

  • Founders Faith Bautista and Steven Sugarman announced completion of a record equity capital raise at the 14th Annual National Asian American Coalition Conference on October 20, 2017.

    LOS ANGELES--()--Faith Bautista, President of the National Diversity Coalition (“NDC”) and National Asian American Coalition (“NAAC”), announced today a partnership with private investors and banking professionals, led by Steven Sugarman, to launch a lending platform to finance underserved homeowners and small businesses. This venture will seek to finance prime borrowers that are currently unserved by banks and other traditional financial institutions. It is estimated that this diverse population of borrowers currently accounts for over $100 billion in annual credit-worthy lending opportunities that is unable to access traditional sources of capital.

    “It has been my dream to help enable these underserved and minority homeowners get the credit they deserve at rates they can afford. This will be the gold standard of community development. I am thrilled to have partnered with Steven Sugarman and his experienced team of executives,” said Faith Bautista.

    Ms. Bautista, who recently received a Presidential appointment to serve on the U.S. Department of Treasury’s Community Development Advisory Board, will Chair the venture’s Community Advisory Board (the “CAB”) to represent the interests of underserved and minority borrowers and to ensure they receive equitable access to capital and credit counseling services. Vice-Chairs of the CAB will include Pastor Mark Whitlock, Gil Vasquez, NDC Chair Jin Sung, and NAAC Co-Chair Jeff Lim.

    “For community development to be successful, it must be collaborative, profitable, and prudent,” Ms. Bautista continued.

    Founding investors – led by Jeffrey Seabold, Mario De Tomasi, Scott Simonich, Marshall Geller and Lawrence Taylor – have committed to provide $20 million in equity to the venture, which will seek federal certification as a Community Development Financial Institution (“CDFI”) and membership with the Federal Home Loan Bank of San Francisco. This represents the largest ever equity capital raise to launch a new, non-bank CDFI since the founding of the program in 1994.

    “These socially responsible investors are to be commended for their commitment to providing prudent financing to underserved, but credit-worthy borrowers. This lending partnership is innovative, important, and just beginning. As the state legislature recently stated, California has a shortage of two million affordable homes. The efforts of NDC and NAAC alongside their partners are poised to creatively reduce this lack of affordable homeownership,” said Bob Gnaizda, General Counsel of the NDC and NAAC.

    “I am proud to be joined by a strong, passionate, and growing team of banking and lending professionals with the experience and track record to lead this venture and maximize its impact over time,” said Sugarman. “We are excited to continue working to empower the dreams of California’s diverse homeowners and small businesses by providing much needed access to prime capital to nontraditional borrowers. This is a huge, attractive market that has been overlooked and ignored for nearly a decade; it will no longer be.”

    The venture will focus on meeting the credit needs of the unbanked and underbanked such as low income, minority -- including African-Americans, Hispanics, and Southeast Asians -- and women.

    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. The NDC and NAAC believes 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). As co-Founder Seabold noted: “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.”

    The NDC and NAAC will continue to seek partnerships with social impact investors, banks, and other corporations to help address this critical need and to better serve the over 25% of the population that the FDIC has deemed unbanked or underbanked.

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