Can't Stop, Won't Stop
Posted by Samira Rajan @July 19 2019
This article has been reverberating in my mind for a few months. I was intrigued by the way Pursuit is financed partially by its most successful graduates: “If graduates make more than $60,000 a year, they agree to pay 12 percent of their income [back] for three years”.
The approach mirrors what Grow Brooklyn has been doing in the Protect Your Treasure program. PYT offers legal advice and representation for individuals trying to obtain clear title to property owned by a family member who has passed away. Given how few people create a Last Will & Testament (call us if you need one!), there are many families who need substantial legal services or else they will lose hundreds of thousands of dollars of their inheritances. Yet few foundations provide grant support sufficient to keep more than 1 attorney on staff.
Rather than turn people away, in a couple of limited cases, if PYT secures the client’s property rights, we receive compensation from the sale of the property. Like the technology education offered by Pursuit, if our work actually creates value, sharing part of that value with Grow Brooklyn makes it possible for us to keep doing the work. Like Pursuit’s clients, PYT’s clients are more than happy to help support a program that took on the risk of helping them in the first place.
The most difficult part of this business model is finding the right case. Sifting through the dozens of families that approach us each year to find the ones most likely to succeed takes skill and experience. Even the technology program only accepts 10% of its applicants. And yet, it’s not that different from what Brooklyn Coop does with our hundreds of loan applications – it’s called underwriting. Good underwriting is sifting: taking a scattered pile of information and searching out the nuggets of gold.
Interestingly, automation promises to make this process easier, but there is a lot that is lost. Fannie Mae’s automated underwriter is brilliant at rejecting thousands of excellent mortgage candidates. Instead, Brooklyn Coop’s lending is manual, based on ‘case by case’. Happily, actual people who review loan applications can find many great borrowers who might have not made it through the automated process. The fact that our mortgage portfolio did not lose a single mortgage during the foreclosure crisis is a testament to the value of a ‘case by case’ approach.
Samira Rajan is the longest-serving employee of Brooklyn Coop and currently the Director of both the credit union and Grow Brooklyn. She started here as an Americorp*VISTA for a single year of service back when we were Bushwick Coop in 2001, got hooked by the challenge of building a community financial institution, and hasn’t left.