 Welcome, ladies and gentlemen. My name is Prince Dykes. This is the Prince of Investing. Thank you guys and girls for tuning in for another great episode. And as today, you're going to love it just like all the other rest of the episodes. But I want to start off with this. According to a USA Today article, it states that even machines are discriminating against black and Latinos when it comes down to home mortgages. If you guys really follow me, you know I've been talking about real estate and looking to purchase a house, especially now with all the things that are going on. But I was very alarmed when I saw that discrimination was going on in the mortgage industry. So as you guys and girls know, I only focus on what I could control. So I wanted to bring up someone in a company, we have the CEO that's here with us today. He's talking about a solution to bringing transparency and opening up and ending discrimination within the home loan mortgage industry. Like I said, guys and girls, I didn't even know this was a big problem and issue, but I'm glad we have someone who solved this problem and is bringing something to the market to solve it. So first of all, let me go ahead and introduce my very, very special guest. He's coming in today all the way from Los Angeles, California. He is the CEO of Acroma. Acroma is this company that he brought out in the private sector to eliminate or solve the problem of discrimination when it comes down to people of color getting home loans. So I wanted to talk to him about what made him do this, how does this work, what is going on, all the great stuff. So you guys and girls, stay tuned. So without further ado, let me bring up my guest, Mr. Yaneve Canfi of Acroma, the CEO of Acroma. How are you doing today, sir? I hope I didn't botch that. That was perfect. Thanks very much. Very good to see you. Thank you. Thank you. So first of all, tell us a little bit about yourself. Yeah, sure. So I've been a technology executive for 20-some odd years in a variety of different industries where I always focus on bringing innovative solutions to the market. A few years ago, I was running a healthcare technology company in Denver and just kind of as part of being part of the healthcare world, just starting reading more and more about what we call the social determinants of health. So all of the factors outside of health itself that really have an outsized role in what a person's health may become and what kind of medical care they would need. So with that in mind, I started to dig into it and see which part of this is really something that can be controlled and which part of this has to do with really bias in the system. And it turns out that there is a significant portion that has to do with bias. So I thought to myself that when I created my own firm, I would use technology to eliminate bias within some large pillar of society and I landed on mortgages. Okay, so you pretty much found biases going on in the system that you're in. And you said, well, where can I go to hammer out people being biased against other people? And the first question I want to ask you, you made it clear that people can't go shop with their own home mortgages. Why is that? Yeah, well, I mean, shopping for a mortgage is painful, right? I mean, no matter like in the best of systems, it's a difficult process. It's a very complex product that you're getting into. Not everybody has a rich financial background from an education standpoint. So there's a lot of industry jargon that we have to deal with. It's a weighty decision to get into mortgage. And there's also been just a historic lack of trust for really good reason in our financial institutions. We don't need to look too far back to just look at the 2008-2009 housing crisis and how that kind of panned out for borrowers at large, but specifically for minority borrowers. So contending with all of that is very difficult. And so we set out to create a solution that would really make the shopping process itself a lot easier. Got it. So my question is, let's take myself for example. Okay, I'm shopping for a house. I got a real estate agent, a real estate agent person hooked me up with a finance person to take care of my mortgage. And they call me in. They say, hey, so what's your credit score? What should this do to that? You know, they pull all my finances or whatnot. And they say, boom, just switch to qualify as far as the loan. Where does the biasness happen in that process? Sure. So there've been a number of studies out there that really try to analyze the stages where these biases can really take place. So the part that you just described is really the initial part of the loan origination part. That piece of the puzzle is actually the one phase that is completely unmonitored by any regulators. You can shop around. You could speak to loan officers. You could speak to originators. And that isn't reported to the regulators until you submit a completed application. So in that process, it's very difficult to tell what kind of service you're getting, whether you're being slow burned because they're just not interested in your loan. Maybe you're difficult to work with. Maybe you just have a challenging financial background that just takes too much time. Maybe the loan amount is just too small and not very interesting. So all sorts of reasons why you may maybe kind of disregarded as a shopper. But let's say you go through and you actually get to a loan officer and they give you a quote. At that point, your package is then sent out to an underwriter. And while there's a lot that's been done and a lot of the regulations are good and a lot of the kind of advances that we've made in the industry are good, what I'm focused on is the true elimination of the possibility of bias. So while we've made some good progress, there's still a ways to go. So when it gets to an underwriter, there is still a gray area. There's still an area where they can deeper scrutinize a particular loan package. They can ask for more or less information about a particular home or or buyer's background. And it's really there where we can't really control it. Okay. Now I got to ask this question, right? We've had so many lawsuits and so many regulations that have passed, laws, and they said, hey, you can't discriminate on a home loan, home loan, civil rights act. So many laws have passed to eliminate this discrimination. How does how does we still have this problem? How does this problem even exist that you see? Right. So I would say that it's like, like every other element of systemic racism, discrimination in this industry has just become more nuanced and more subtle, right? So these regulations are terrific for analyzing very, very large amounts of data and finding patterns in a system. So finding patterns in a region or finding patterns nationally, maybe even finding patterns with a particular very large bank or lender. But what they're not good at is the very like individual nuanced interactions that people have. And those patterns are difficult to kind of bubble up within the system. So there is really nothing in place that would stop the lender that's doing 10, 15, 20, maybe even a couple hundred loans a year from having some form of pattern of discrimination or even if it's one off. So really the whole point of our business is that we think that the only amount of discrimination within a system that should be tolerable is zero. And until we get to that point, all of these other regulations, they definitely help. But what really helps is to take it a step further and actually to bring the private sector in and make us kind of doubly accountable for what we do and not just rely on the public sector. Okay, so you're just pretty much saying the regulations that we have is pretty much most they're looking at the large scale, they're not zoning in. So a lot of things are going up under the line, you know, so ask me this question. So will my home loan that I'm applying for, will they know that I'm black? Yeah, absolutely. I mean, there's a number of ways that an originator and an underwriter. Are they searching my Facebook page and being like, oh, no, not this guy. For real, an underwriter is searching all of your social pages if they're doing their job. So yeah, you're definitely being Googled, you're being looked up on Facebook, that's true. But there are a lot of factors that really come into play. So if you think about what you need to provide in order to just submit a loan application, you're providing your name. So depending on somebody's name, you can really tell their background if they're Hispanic, if they're black, if they're, you know, I'm as well, what my background is. You can certainly tell gender, not only that, but part of the regulations and in order to really be able to report on this on the back end, we explicitly ask for a borrower to fill out their demographic information. So their gender and their race and ethnicity. And that's important when doing the reporting on the back end, but when it's not important is at the moment that decisions are being made on your file. So there's that information and also even the neighborhood that you're purchasing in. I mean, we can tell by a zip code what the predominant population looks like. So there's a ton of information that's being brought to the table that at the moment of decision is unnecessary. So you're saying with these distrimmations that are happening, it's affecting the minorities because they're actually paying more for a particular home loan. Am I correct on that? Yeah. So there's a study done by Berkeley that really correlated some disparate data sets and found that when we normed for the financials of the borrower, for the credit of the borrower, normed for really everything that we can, still found a disparity in interest rates to the tune of basically the status of minority home borrowers are paying $500 million a year in higher interest rates than their white counterparts. Wow, $500 million more in home interest rates than their white counterparts. That's right. And I'm not saying that all of that is due to bias, although a large part of it is due to bias. It's due to the inability to really shop around. So there are a number of factors that really take shape. Okay, so why do you think minorities have a hard time or get higher interest rates than their counterparts? Well, how does that happen? So some of it is potentially bias. Some of it is kind of intimidation within the system. I would say that being able to bargain for a $200, $300,000 loan is really the realm of the privileged class. Those that have the confidence and the wherewithal to really shop around and get a quote from one lender and then take that and use it as leverage with another lender. And that's not an action that we see as prevalent within minority communities. And frankly, it's not as prevalent within women of all backgrounds. So the inability to shop around, I think, is a really big, big part of it. The other part is what can happen from either the loan originator or from an underwriter standpoint. But even if we just take the loan originator, it's difficult to ensure that you're getting a really fair shake from any originator until you submit the application. So all of that, all the kind of pre-qualification pieces, make it difficult to ensure that you're getting the best loan out there. Okay. But one of the things we're going to bring up, we just spoke about the problem. We just spoke about how minorities can be, I didn't even think about that, that underwriters are looking you up on Google, looking you up on Facebook, seeing where you're buying the property, seeing that your inability to shop around and they're offering you a higher interest rate loan. And I know anywhere there's money, there's corruption. I mean, you can guarantee you find money there, it's a corruption everywhere. But I'm glad that you bring this up. Now what we're going to focus on, we're going to focus on the solution. So we're going to take a quick break. And after this break, we're going to come back and we're going to talk about the solution. What is the problem? How does it bring a solution to the mortgage lending discrimination? We'll be right back. Hi, I'm Rusty Kamori, host of Beyond the Lines on Think Tech, Hawaii. I was the head coach for the Punahou Boys varsity tennis team for 22 years and we were fortunate to win 22 consecutive state championships. My show is based on my book also titled Beyond the Lines and it's about leadership, creating a superior culture of excellence and finding greatness. I feature a wide range of amazing guests who share valuable insights about how going beyond the lines leads to success in everything you do in life. I'm looking forward to you joining me every Monday at 11am. Aloha. Ladies and gentlemen, boys and girls and children of all ages, we are now back to the investor show. As always, this is your greatest host, the Prince of Investor, Prince Dykes. I'm coming to you guys and girls today. If you was catching before we took into the break, we was talking about discrimination inside the mortgage lending world. I didn't think about it. I didn't know that was a problem. So we talked about the problem where we talked about minorities paying more than $500 million more in home mortgages, how they're being discriminated against by the demographic, where they come from, things like that or whatnot. So now we want to talk about, okay, now that we know this is happening, what is the solution? What can we do? That's exactly what we have today. So today, as our guest was talking about, we have Mr. Yannick, Yannick, Yanniva. Hope I'm saying that right. From Akroma, he's here with us today. And now you spoke about discrimination and you spoke about how it runs rampant in the home mortgage arena. I want to ask you now, what is Akroma and how is it a solution? Yeah, sure. So we started Akroma a couple of years ago and really at its heart, it's a mission driven mortgage marketplace. We use technology to ensure that we are offering the most shoppable mortgage marketplace. We're offering transparency. And really at its heart, we have this proprietary anonymization system that we use. So really, if we think about the pillars of what causes discrimination and disparity within mortgages, I would break it down into, so there's an area of implicit and explicit bias. There's the lack of shopability. And then there's the misaligned incentives, which I don't know that we fully touched on, but you mentioned briefly that anywhere where there's money, there's the potential for corruption. So really, those are the three things that we look to attack. So to take it from the top, to really work on the potentials of bias, what we've done is we've created this anonymization whereby we accept an entire loan package. We then redact all the information within that that could potentially identify the borrower. And so this is everything from the area where we explicitly ask for race and ethnicity and gender to also names, addresses, and we really try to pare it down to just what is critical for making a credit and financial decision. We then send that anonymized package out to our lenders. They review it and they make a decision of whether this is accepted or not. And if they can accept a package like that, then we then marry in all of the original information and they proceed with underwriting as a full or normal package. But it's really that initial moment where they kind of bind to a decision based strictly on financials. Wow. The second part of it, just to talk about misaligned incentives. So the problems with brokers, with lenders in general, and with originators is that typically when you sign up, let's just pick on brokers for a second, you sign up with a lender and you state that your commission is going to be a certain percentage with a particular lender for a given period of time. So let's say you are signed up with five different lenders. With one lender, you're working at a two and a quarter percent commission rate with another lender at one and a half and with the other two lenders at 175. How you decide which loan product to offer the borrower is complicated. And to say that your financial incentives aren't taken into account when you're making those decisions, making those recommendations, I think is naive. So what we've done with the Chroma is that we have signed on with every lender at a fixed uniform percentage of one percent. So first of all, one percent is on the extremely low end of all commission rates for originators. But the fact that it's uniform is incredibly rare. It is part of our kind of commitment to this cause and to this mission that we've done that. And with that, I think I might not have mentioned, but a Chroma is a public benefit corporation, which what that means for us is that we are legally beholden to serve both our, to create shareholder value, but in addition to really push our mission, which is to create greater social equity. So we are kind of from our construct brought to this world as a mission first organization. So while green is the only color that most mortgage brokers see, we have other things that we take into account. So the second part of that is that our loan officers are non-commissioned. We ensure that there's no greater incentive for a loan officer to work on a particular loan over another, whether it's a higher loan amount where they get a higher commission, they just work on a salary. So we just take that off the table. And then the last part around shopability. So we think that transparency is absolutely key. On our website, you see real time pricing for every lender and every product that our lenders offer, really putting the borrower in, you know, it's is a cliche, but in the driver's seat of being able to make a decision. So they can, they can browse through different loan types, right? So whether it be a convention on that FHA or VA loan, they can, they can see, you know, transparently who that loan may be going to, whether it be Quicken or UWM or some of the other large players that we work with. And we, you know, obviously we're showing the interest rate in the APR, which is required by regulation, but we also very clearly show what our origination fee is within the mix. And this is a level of transparency that you don't find anywhere else. You know, you're not seeing this on bank rating or lending tree. And we're also doing the origination. So we're not shipping out a borrower's information as a lead to five different brokers where they kind of scrape and scrounge to, to serve that, that particular borrower and, you know, inundate them with, you know, 15 texts and emails. And yeah, so we try to make it a very kind of personalized and handheld service. Okay. So you already touched on it, but I want you to say that again, because I want to take this clip and I want to show it to people is the misalignment of mortgage loan officers and brokers with what a client wants. How does that happen? Yeah, so, so a broker is incentivized typically by a commission where they're making some percentage on every loan that they close the higher the loan amount, the higher their commission, the higher their commission rate with a particular lender, the higher their commission. Now, they so, so if their goal is to make more money, and your goal as a borrowers to save more money, those are a direct conflict with one another. Not only that, but, you know, some, some loans and some, you know, some borrower situations are just more challenging. And the incentive to spend, you know, 15 hours working with a particular borrower who is, is, is applying for a smaller loan amount just isn't, isn't there when you're a loan broker, you want to, you want to go through borrowers as quickly as possible, you want to close the deal as quickly as possible, and you want to make your money and move on. And for us, because we are a public benefit corporation, because we don't have a commission base for any of our staff, all of that is gone. So we're really there just to serve the borrowers that we work with in a way that's really unique in this industry. Okay. So now anybody can go on to how do I get this? I'm looking for a home mortgage. I'm looking for a loan. I'm actually in the market. How can I go test the water? Absolutely. So what you do is you go to acroma.io. So that's our website. From there, you can, you can see our rates. You can click get started at the top or kind of anywhere on the page. And it'll take you to a page that lists all of our rates. You can then you can select all of your criteria. So it takes into account in real time, your, you know, the loan amount, the down payment, the your credit score, etc. And then it shows you exactly what what is being offered on our on our marketplace. I will say that right now, since we're, you know, we're start up when we're just really getting off the ground, we are only licensed in Colorado. We are in the next few months expanding into into another dozen or so states. So that'll be it'll be news that we release shortly. Gotta get it in Hawaii, man. Some big loans going out, especially with those houses. But okay, so where's the fee? How do I pay? Is it free? Do I have to pay to use it? Is it I pay once I get a loan? How does that work? Yeah, so it's absolutely free. So you come on and you you can shop around for a loan. You can decide which loan you think suits you best. You can fill out an application. We then, as I mentioned before, receive that application and do our redaction. But at that point, we also assign a non commissioned loan coach to you that can really help with that with a decision you made. So, you know, back to the complexity of the product that we're looking at. Sometimes you don't know which loan product is is really best for you. And there might be something else. So really, our job is to enlighten you and show you every every loan that that is out there that may suit your needs. At that point, once you go through and submit the entire application and our lender then takes it on, our fee is really baked into the loan itself, which is the same as how every other broker or lender works. So we don't have any additional fee that you wouldn't have elsewhere. Got it. Okay, so pretty much a chroma. I turn in my information and you pretty much stripped down anything that I can be discriminated against, where you're taking away the neighborhood, where you're taking away the race, the neighborhood, the gender, you know, everything that can possibly be discriminated against. And then you're turning that in versus the traditional way of people can get your information. They can look up your name. They can look up your address. They can look up information and say, Oh, that's a little riskier. And that's what a chroma is all about. That's exactly right. Yep. That's exactly right. Well, summed up. Okay, got it. Because I want to make sure people get that clear and across to the point. Well, in the future, what are the goals for a chroma? Just like you said, you started up, you started in Colorado, you're offering up people a way to get loans in an unbiased way. And I think it's a good way because usually I kind of let my loan officer a mortgage officer handle that. You know, hey, you handle that, he comes back with a percentage and like, okay, that's the best one out there. Cool. So now you're giving me a way that I can sign up, look up, look up my own loan and then test what my loan officer is telling me. Is that correct? Yeah, that's exactly right. So that's what your loan officer is telling you, but just really ensure that you're getting the best product out there. And that the only thing that's being taken to account when you're applying for a loan is your is your financial and credit worthiness and really nothing else. And that's really the only thing that should be there. Does it work with VA loans, FHA loans, traditional loans, all loans, conventional FHA, VA, etc. Yep. Oh, wow, that's nice. Now, is there anything you want to leave the people out there? How can they follow you? How can they get more information? What do you want to leave the people with? Yeah, sure. So you can find us online. So www.acroma.io, we're on all these social channels as a chroma mortgage. And please come check us out, test out our rates, and let's see if we can help you find the right mortgage for you. That's nice. Well, thank you guys. First of all, I want to thank you for coming on and sharing that bringing light to a problem or issue that I didn't even know existed. You know, like I said, I'm a person who goes out, I get a real estate agent, and a real estate agent turns me on to a loan officer, and they come back with the rate. And I say, well, did you shop it around? They say, yeah, we looked around. This is the best rate we can give you. And I just kind of go with it, right? But you're showing me how I like how you align and said, hey, look, a loan officer, they could be getting a higher commission from one company or another company. You could just, you know, when they turn your mortgage package in, there's so many things they can discriminate upon you against that could actually raise your rate, right? And I thought that was pretty interesting. But the thing I do want to say is that you offer a solution. So a chroma, I'm going to definitely check you out to see what type of rates you got going on over there to chroma, you know, being here in the Denver, Colorado area. But we're going to get out of here, ladies and gentlemen. I want to thank, first, I want to thank you for coming on, right? Did you have fun? Yeah, thanks very much. It was a pleasure to talk to you. Okay, definitely. Thanks for coming on. And also, I want to let everybody know, check out a chroma. It's free. It's a way to check out a loan. Check it against your rates, especially if you're in the housing market. Right now, some people may be going into the housing market. If you're going into the housing market like myself, stop over there. Give it a try. See if you can get a better rate, only if you're in the Colorado area, as of now, right? But ladies and gentlemen, thank you guys and girls for tuning in. And to the next video, podcast, cartoon or whatever else you see me do crazy around the globe. Peace, be safe. I'm out and thank you.