Below is an excerpt from the article “Overflow Crowd of CU, CUSO Venture Capitalists Turns Out to Hear Fintechs Make Their Pitches” published on 11/11/2021 on CUtoday.com.
SocialEquity said VentureTech 21 was the official unveiling of a solution aimed at turning renters into homeowners by offering fractional ownership of homes. The company said its philosophy and motivation align with that of credit unions and that it seeks to do well by doing good.
While the company did not win the vote as the most popular product presented to the audience, it did provoke the most questions.
“We are focused on one of the largest crises in our country, which is the affordability gap,” said a company spokesperson, explaining Social Equity has been working on the solution for 18 months.
In short, the solution seeks to allow multiple people to purchase a home and share ownership. Purchasing a home as a twenty-something rather than a forty-something can make a $250,000 financial difference during a person’s lifetime, the company said.
But too many people are “trapped in rent,” it added.
“We are fighting a virtual war in the market,” the company rep said. “We want to do something real about it. What we need is allies. We need credit union allies.”The company said it has been in discussions with at least one credit union, and that its solution can bring revenues and loans to CUs.
“This brings credit unions new sources of revenue with new, younger members, larger home loans and built in protective risk mitigation that lowers overall lending risks,” he said. “We are going to make metric tons of revenue. We believe in doing well by doing good.
“The solution is similar to that of dating apps in that is seeks to match up people on “like-mindedness” and other factors based on profiles users create as they answer questions about how they live, with whom they would like to live, their current living habits and more.
In response to audience questions related to who might buy the loans, SocialEquity said the CUs it has talked to have suggested they would portfolio the loans and then perhaps participate them to other CUs.
The company said the home loan structure is consistent with the law, and that the property is conveyed into a trust.
Each person is responsible for their own payment so if one misses payments, it does not ding the others’ credit.
No launch date was announced.
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