THE CHANGE COMPANY COMPANY PROFILE - CHANGE THE WORLD - # 11

Millions of financially stable Americans look like risky borrowers on paper—because they are freelancers, for example, or have multiple jobs. The Change Company provides fairly priced mortgages to this underserved group. In 2020 it originated $7 billion in loans to some 30,000 customers, 70% of whom identify as Black, Latinx, or low-income. It also notched its third straight year of operating profits.

Location: Irvine, California

Industry: Banking

Employee quote about the company's perks and benefits: "Stock options give me the ability to participate in upside value I'm helping to create for the company, so I feel very aligned."

The Change Company, America’s Community Development Financial Institution (CDFI), announced today the closing of a private placement (the “Offering”) of $75 million aggregate principal amount of its 4.75% Senior Notes due 2031 (the “Notes”). Investors in the Notes include over 35 socially responsible insurance companies, asset managers and banks seeking to participate in impactful ESG investment opportunities that provide access to capital in support of homeownership for Black, Latino, and Low-Income borrowers and communities. The Change Company and its affiliates have successfully raised over $300 million in new Sr. Debt and Perpetual Preferred Equity over past twelve months in support of its community development mission.

In 2020, The Change Company originated over 20,000 home loans totaling more than $7 billion – approximately 70% of which were to Black, Latino, and other underbanked borrowers. For the year-to-date ended September 15, 2021, the average home loan to our underbanked borrowers was for approximately $340,000, with an interest rate of 3.21%, and an LTV of 76%. The Change Company expects to originate over $8 billion in loans in 2021.

Steven Sugarman, Founder of The Change Company, stated, “We are humbled to announce another milestone for all CDFIs – demonstrating that CDFIs expanding access to homeownership for Black, Latino, and Low-Income borrowers are able to attract the capital and liquidity necessary to increase social and racial equity in America. We are encouraged by the strong, diverse consortium of socially responsible investors who participated in our offerings over the last twelve months, which has resulted in greater than $300 million in new capital. The Change Company will continue to expand its partnerships to reach more underbanked borrowers in more underserved markets across the United States.”

The Change Company, America’s Community Development Financial Institution (CDFI), announced today the release of “Homeownership, racial segregation, and policy solutions to racial wealth equity,” a new Brookings Institution report sponsored by The Change Company. The report provides an empirical analysis of racial segregation in several cities across the U.S. and explores the role that segregation and subsequent disparities in homeownership, home valuations, and access to banking services play in the growing racial wealth gap.

“The Change Company is proud to partner with a renowned organization like the Brookings Institution to further define and understand housing injustice,” said The Change Company Founder and CEO, Steven Sugarman. “There’s no denying that a racial wealth gap exists in this country, but to fully address the problem we must acknowledge the depth of its roots. The findings in this report can aid in our work to level the playing field for Black, Latino, and underserved communities by helping bring social and racial equity to banking and lending services across the country.”

Securitized debt products aren’t yet the top draw of dollars earmarked for assets with an environmental, social and governance angle but some mortgage lenders are looking to change that.

One of them is The Change Company, a Community Development Financial Institution whose loans are meeting social goals sought by banks and other corporations, and soon, securitized debt investors.

The company is laying groundwork for non-agency bonds that — while not defined as ESG assets — will have qualities attractive to buyers that must quantify their support of local communities, including low- and moderate-income neighborhoods.

The CDFI’s new capital markets team run by loan and securitization veterans from Angelo Gordon, Hudson Advisors, JPMorgan and Kroll Bond Rating Agency is aiming for a debut RMBS that fulfill requirements of the 1977 Community Reinvestment Act, said Steven Sugarman, who founded the company in 2017. If more than 50% of the pool qualifies for CRA credit, the deal should be particularly attractive to banks, he said.

The Change Company, America’s Community Development Financial Institution (CDFI), announced today that its founder Steven Sugarman presented to the 74th Annual National Association of Real Estate Brokers (NAREB) Convention in Cleveland, Ohio. Mr. Sugarman spoke during the Legislative Forum and discussed the unique opportunity for advocacy that exists for NAREB and The Change Company to impact public policy and end government sponsored or sanctioned redlining in America. Mr. Sugarman discussed advocacy positions which would help to immediately expand homeownership across the Black community and begin to reduce the wealth gap between Black and white families in America.

Reverend Everett Bell Jr., Change Company Community Advisory Board Chairman stated, “We are pleased to partner with NAREB to end the systemic racism and discriminatory practices all too common among traditional banks and lenders. Together we will encourage regulators, policymakers, and legislators to keep their election year promises to address these important issues and finally allow Black and other minority consumers to get home loans on equal terms with other borrowers.”

Steven A. Sugarman Addresses the 74th Annual National Association of Real Estate Brokers Convention

he Change Company, America’s Community Development Financial Institution (CDFI), is proud to announce that it won the Comparably Award for Best Leadership Team 2021.

“I’m thrilled that The Change Company’s employees recognize the strength, commitment, and passion of our leadership team. We are dedicated to our mission and passionate about the success of our employees. The Change Company’s mission – to bank the unbanked, fairly and responsibly – begins in our boardroom and on the executive team where minority leaders comprise two-thirds of our leadership,” said The Change Company Founder Steven Sugarman. “Our Leadership Team is committed to finding immediate solutions to end the persistent structural economic inequalities that continue to impact minority and lower income Americans – particularly with respect to homeownership.”

The Change Company, America’s Community Development Financial Institution (CDFI), is proud to announce that it won two Comparably Awards: Best CEO for Diversity 2021 and Best CEO for Women 2021.

“I am gratified by the fact that our diverse team of employees know that their contributions are valued, their voices are heard, and their talent and hard work are responsible for The Change Company’s dramatic success. Change is making a real impact on the lives of tens of thousands American families each year by expanding access to capital to those left behind by traditional banks and lenders.” said Founder and CEO Steven Sugarman. “I am blessed to work with a mission-driven team that focuses each day on making a difference in the lives of those families we help to become homeowners and bring into the financial system. It is its own reward to know that our employees are as satisfied as I am working at The Change Company.”

he Change Company, America’s Community Development Financial Institution (CDFI), is pleased to announce the appointment of Jon Irvine as Chief Production Officer of its mortgage banking subsidiary Change Home Mortgage. Jon is responsible for revenue-generation strategy and execution across all origination channels, including Change Wholesale. His duties include overseeing the sales, marketing, onboarding, and training teams to ensure Change Home Mortgage executes its strategy to expand affordable homeownership across the United States.

Mr. Irvine reports to Change Home Mortgage President Ted Ray, who said, "Jon is a seasoned sales leader with a proven track record of growing originations, as well as building and coaching world-class teams. I am thrilled to work with Jon again because he has lived our values and celebrated our shared mission throughout his career. Jon is the ideal person to help lead Change Home Mortgage through our next stage of growth and we are very pleased he has joined our team.”

Jon has spent over two decades growing and managing origination platforms and building successful, mission-based sales teams. Jon previously served as Senior Vice President of retail residential lending at Banc Home Loans, a division of Banc of California, alongside many of The Change Company’s executives. Mr. Irvine most recently served as the Chief Strategy Officer for Sovereign Lending Group and as a Senior Vice President at Mr. Cooper Group, Inc.

The Change Company, America’s Community Development Financial Institution (CDFI), announced today it has acquired the woman-owned and operated real estate escrow services company Connect Escrow, Inc. (“Connect Escrow”).

Leanne Alva, Connect Escrow’s Chief Executive Officer, said, “We are excited to join The Change Company and become part of America’s CDFI. Connect Escrow is founded on principles of strong, sustainable, and inclusive relationships to ensure all Americans have an equal ability to buy and sell real estate. Our technology platform is highly scalable and enables us to serve clients in communities that for too long have been underserved by credible and reliable service providers. Our digital platform will accelerate Change’s ability to meet its mission to bank the unbanked, fairly and responsibly.”

Connect Escrow is a green company headquartered in Los Angeles and operating throughout California. Connect will continue to be managed by its existing team.

he Change Company, America’s Community Development Financial Institution (CDFI), and its mortgage banking subsidiary Change Home Mortgage (the “Company”) announced today the rebranding of the Company’s wholesale division to Change Wholesale.

Ted Ray, President of Change Home Mortgage, said, “This rebranding represents an important milestone as we focus our resources on scaling Change Wholesale. Our wholesale partners are able to benefit from Change Wholesale’s proprietary loan programs – including our Community Mortgage – and technology to finance prime borrowers their competitors can’t. As America’s CDFI, we are a mission-driven lender who enables our broker partners to grow their businesses by serving diverse borrowers with diverse needs.”

The Change Company, America’s Community Development Financial Institution (CDFI), announced today the rebranding of its mortgage banking subsidiary to Change Home Mortgage.

President Ted Ray said, “This rebranding represents an important milestone as we continue to scale our digital platform serving traditional and non-traditional homeowners. Our proprietary loans, technology, and platform are enabling us to change how Americans get a home mortgage – making it faster, easier and more inclusive.”

Change Home Mortgage also announced the launch of its new website (www.ChangeMtg.com) and social media sites on LinkedIn, Twitter and Instagram. Change Home Mortgage will continue to be owned by The Change Company and operated by its existing management team.

The Change Company, America’s Community Development Financial Institution (CDFI), announced today the closing of a private placement (the “Offering”) of $150 million aggregate principal amount of its 5.375% Senior Notes due in 2031 (the “Notes”). Investors in the Notes include over 45 socially responsible insurance companies, asset managers, and banks seeking to participate in impactful ESG investment opportunities that provide access to capital in support of homeownership for Black, Latino and low-income borrowers and communities. The Change Company and its affiliates have successfully raised approximately $250 million in new capital over past six months in support of their community development mission.

In 2020, The Change Company originated approximately 20,000 home loans totaling more than $7 billion – approximately 70% of which were to Black, Latino, and other underbanked borrowers. The average home loan to underbanked borrowers was for approximately $320,000, with an interest rate of 3.22%, and a loan-to-value of 76%.

Steven Sugarman, Founder of The Change Company, added, “This $150 million offering of senior debt is milestone for all CDFIs – demonstrating that, at long last, CDFIs are able to attract the capital and liquidity necessary to increase social and racial equity in home ownership in America. We are humbled by the strong, diverse consortium of socially responsible investors who participated in this offering. The Change Company will continue to expand its partnerships to reach more underbanked borrowers in more underserved markets across the United States.”

The Change Company, America’s Community Development Financial Institution (CDFI), has appointed Jason Biegel Chief Operating Officer of its residential lending division, which operates under the brands Change Home Mortgage and Change Wholesale. Mr. Biegel’s appointment will be effective upon the beginning of his employment on April 1, 2021.

Jason Biegel previously served as Managing Director developing and overseeing the industry-leading residential mortgage whole loan business platforms for Angelo Gordon (2013-2020) and Lone Star Funds (2009-2012). Mr. Biegel began his career at Bear Stearns where he held the role of Senior Managing Director responsible for residential mortgage whole loan trading and servicing.

Mr. Biegel stated, “After partnering with The Change Company for the past two years, I am excited to join the organization to lead it during its next phase of growth. The Change Company has successfully emerged as the dominant originator of residential mortgage loans to prime borrowers who are not well served by banks and traditional lenders. With its investment grade credit rating, strong balance sheet, and proprietary loan products, I am eager to ensure Change’s infrastructure, technology, and team are able to meaningfully and prudently scale the company’s business. I am particularly excited to work with Change’s talented wholesale team to help our 800-plus broker partners grow their business by using Change’s proprietary products to serve prime borrowers that others do not.”

Homeownership remains the primary means by which most households in this country can attain wealth. Yet many families—especially those of color—are locked out of the opportunity to buy homes of their own. Homeownership rates in low- and moderate-income (LMI) communities and for people of color have historically been considerably lower than other groups, making it one of the largest drivers of the racial wealth divide. Barriers to accessing mortgage finance are a major explanation of this.

Financing of homeownership is also uneven. In 2017, 19.3% of Black borrowers and 13.5% of Hispanic borrowers were turned down for a conventional loan. At the same time, just 7.9% of White and 10.1% of Asian applicants were denied a conventional loan. The refinancing market saw similar differentials, with Blacks rejected on 39% of their applications and Whites on 22.9%. Further, 60% of CRA-qualifying loans in LMI census tracts are made to middle- and upper-income borrowers, including 29% to higher-income borrowers. Community Development Financial Institutions (CDFIs) are well-positioned in many communities to help address these gaps.

The Change Company, America’s Community Development Financial Institution (CDFI), announced today the launch of its newest initiative to expand homeownership in low- to moderate- income (LMI) communities based on the research recently published by Prosperity NOW entitled “Expanding Homeownership in Low- to Moderate- Income Communities.” The Change Company’s initiative pledges $1 billion of fair and responsible new lending in LMI communities to expand homeownership. The Change Company has published the Prosperity NOW study on the Insights section of its website at www.changellc.com/insights/.

Rev. Everett Bell, Jr., Chair of The Change Company’s Community Advisory Board, said, “This important research by Prosperity NOW helps to identify best practices for growing homeownership and helps to uncover systemic issues impeding home lending in low- to moderate- income communities. The Community Advisory Board of The Change Company is proud to have sponsored this research and we thank Rev. Dr. Charles Dorsey for leading this effort on our behalf. Based upon the advice and recommendations of our Community Advisory Board, The Change Company has pledged to deploy $1 billion in new lending to grow homeownership in LMI communities.”

The Change Company, America’s Community Development Financial Institution (CDFI), announced today its partnership with Netflix to expand Black homeownership in America. The Netflix investment in affiliates of The Change Company is focused on bringing racial equity to home lending by financing Black homeowners, fairly and responsibly.

Empowered by its partnership with Netflix, The Change Company and its home loan subsidiary also announced the launch of its Black Homeownership Initiative to lend over $1 billion to expand Black homeownership. The Change Company will facilitate its outreach to underbanked borrowers in Black communities through its network of over 500 lenders who utilize The Change Company’s proprietary origination platform, lending products, and technology.

Chris Gardner, Director of The Change Company, stated, “It is critical to eliminate the wealth gap and break the pattern of poverty in our Black communities. Homeownership is a critical and necessary part of the solution. Our partnership with Netflix will enable thousands of Black Americans to achieve ‘Happyness’ for themselves and their families.”

The Change Company, America’s Community Development Financial Institution (CDFI), has appointed Jesse Elhai as Managing Director. Mr. Elhai is responsible for leading the company’s Capital Markets where he will oversee the financing, sales and trading, and securitization of all non-conventional whole loans.

Mr. Elhai stated, “I am excited to join The Change Company and build an industry leading capital markets team. As a community development financial institution, The Change Company and its subsidiaries are able to originate high quality, prime loans that meet the demand of today’s traditional institutional investors as well as socially responsible investors with CRA, ESG, and Impact investment mandates. I am excited to be able to deliver unique and compelling whole loans to investors who seek attractive financial and social returns.”

Ted Ray, President of The Change Company’s mortgage banking subsidiary, said, “Jesse’s deep industry knowledge and impressive experience are invaluable additions to our team, his leadership and expertise will help us prudently grow our non-conventional origination platform to meet the needs of our loan officers and wholesale origination partners.”

The Change Company, America’s Community Development Financial Institution (“CDFI”), is proud to announce that Chris Gardner has joined its Board of Directors.

Mr. Gardner is an entrepreneur, single parent, and best-selling author of The Pursuit of Happyness and Start Where You Are. The Pursuit of Happyness became a New York Times and Washington Post #1 Bestseller as well as an iconic film starring Will Smith. Mr. Gardner is currently completing his newest book, Permission 2 Dream, which will be released in April 2021.

Mr. Gardner stated, “The Pursuit of Happyness is the story of my life, but I’ve always thought of it as a book about the strength of America, where so many have every opportunity to quit, but don’t. Where even a homeless veteran with a toddler son could succeed in finding Happyness. I am excited to help The Change Company work to eliminate systemic economic inequalities standing in the way of all Americans finding their own Happyness.”