Banking Fintech

Calling all startups! Please reinvent the mortgage process

Early stage mortgage process startups. Image: Freepik
Written by Jim Bruene

Jim Bruene is always on the lookout for startups working to improve the mortgage process, and has found a few early stage startups.

I’ve been a mortgage customer for almost 30 years, and unlike most financial products, the mortgage process has become more convoluted over time. There are good reasons for many of the added hassles, but the overall experience leaves a lot to be desired, especially if you’re not a standard W2 wage earner. The poster child for bad UX was the denial of a mortgage to previous Fed chairman Ben Bernanke last year. I had similar trouble last fall, despite almost 20 years in the same home and job. There is still much to be done.

So, I’m always on the lookout for startups working on improving the mortgage process. Despite a mortgage innovator, M&I Bank spinoff Mortgagebot, winning ‘Best of Show’ at the very first Finovate, we’ve only had five companies demo mortgage-specific process improvement during the ensuing seven years (and we’ve had a number of mortgage calculators and rate-search plays including Credit Sesame, Google Advisor, LendingTree, MortgageHippo, ReadyForZero):

  • Mortgagebot, a ‘Best of Show’ winner at our first event, Finovate 2007 (acquired by D+H in 2011)
  • Tactile Finance (spring 2014)
  • Roostify (spring 2014)
  • Mortgage Harmony (spring 2013)
  • eyeOpen (Europe 2013)
  • Home-Account (fall 2009), which was acquired by Bills.com in 2010.

That’s not nearly the amount of change I expected in this vital area, but the re-regulation of the mortgage industry, thanks to the housing debacle of 2008 to 2012, has taken its toll on innovation. Yet, things are beginning to change. Firstly, we have three companies at next week’s FinovateSpring taking on various aspects of the mortgage process:

There are also some early stage startups forming with stated missions to improve various parts of the mortgage experience, including:

Ethos Lending – raised $8.2m in April 2014
– Expedite Financial (now Clara Lending) – San-Francisco-based startup founded in 2013
Floify – Boulder, Colorado company founded in 2012
HomeTrackr – Aiming to be the ‘Carfax of homes’
Lenda – raised $1.5m in September 2014
LendingHome – raised $70m Series C in March 2015
Sindeo – raised $5m Series A in February 2015.

Finally, many of the big so-called P2P lending platforms such as Lending Club and SoFi have talked about moving into the mortgage arena.

– This article is reproduced with kind permission. Some minor changes have been made to reflect BankNXT style considerations. You can read the original article here. Image: Freepik

About the author

Jim Bruene

After developing the first major PFM-based online banking program at US Bancorp in the early 1990s, Jim Bruene went on to found two companies in the space: Online Banking Report and the Finovate conference series. He has been writing and geeking out on digital financial services nearly every day for more than 20 years and is currently Principal of BUX Advisors, a fintech UX/UI consultancy, as well as continuing to help guide content at Finovate events.

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