Artificial Intelligence-Based App Helps Homebuyers In Communities Of Color Avoid Discrimination | New
Blacks and Latin Americans who hope to buy a home in 2021 still face systemic discrimination in everything from loan approval to higher interest rates. The same goes for LGBTQ borrowers and women, who pay higher interest rates than men in 49 of the 50 states, according to HousingWire, which relied on data from the Home Mortgage Disclosure Act.
Now, an artificial intelligence-based software application, developed by a black-and-Latin American-owned company, shows promise in changing that reality to make the home buying process more fair for everyone.
Home Lending Pal (HLP), an app built using Cloud Hyper Protect services from IBM, Watson and IBM Blockchain, digitizes the mortgage search and application process so banks and mortgage lenders can’t see personally identifiable information of a potential buyer, such as their name, race, gender, sexual orientation or age. Instead, they only see their financial data, which includes their income, debts, and credit payment history.
The AI app collects these data points and makes recommendations to homebuyers on how to improve their rates and what steps they need to take to get the best mortgage available. The application is free for potential borrowers.
“We inform you of the probability of being approved for a loan”, Frank pollock, Marketing Director of Home Lending Pal, explained to BET.com. Pollock said the platform prepares buyers for the subscription process. But first, they are educated about their credit, the rates to which they are entitled and even shown how to pay off their outstanding debts to improve their financial situation.
Ultimately, Home Lending Pal, which is headquartered in Orlando, Florida and Durham, North Carolina, aims to make the lending process more transparent for everyone.
As of May, the initial public beta of the app had more than 17,000 new users and has helped more than 800 people qualify to buy homes, according to a press release from the company. As a mission, HLP aims to help Millennials and people within communities of color access true and reliable homeownership information.
The idea is to create an online market of available loan options while preventing prejudices from creeping into the home buying process. According to Pollock, 260 banks are already connected to the app, part of a mortgage collaboration that aligns with HLP’s mortgage equality mission by not economically penalizing disadvantaged groups with higher costs. These lenders all strive for parity, starting with educating people about their overall financial situation and the impact of credit on the amount they will pay for a mortgage.
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CEO of Home Lending Pal Bryan young and COO Steven better, both co-founders of the app, say they’re satisfied with the results so far and know it’s something that will benefit all consumers, especially those who have struggled to find a home loan or the best way forward.
“We’re doing something that’s never been done before – making something as complex as buying a home an online shopping experience and providing an automated way for people who are otherwise discriminated against or marginalized. , the ability to secure their homes, ”Young said.
Jamison Sanders and his wife, Vonsia, bought a home in North Carolina, fully equipped with knowledge of what to expect and the best areas to buy, after first trying the HLP app during its beta testing period. On their own, Sanders said BET.com, they did their research and read articles about the disparities in the way black buyers were treated compared to whites.
“African Americans owned fewer homes than others,” Sanders said. And while Sanders said he and Vonsia had not personally experienced discrimination during the home buying process, the app “helped give us insight into what we needed to look at in the area. “.
Dawn Onley is a freelance writer based in the Washington, DC metro area.