LendingHome, an online lender challenging the mortgage finance industry, today announced it is a Forbes Fintech 50 company for the second year in a row. The prestigious list highlights 50 innovators that are changing how people save, spend, and invest.
This is the magazine’s fourth Fintech 50 list, and the Forbes staff spent months pouring over nominations looking for financial technology companies that exhibited, among other criteria, “strong growth over the past year … at a faster pace than competitors.” The list recognizes companies that are “making industry-changing innovation.”
At inception, LendingHome offered an alternative to traditional lenders, most of whom are hampered by high overhead, legacy software, and a continued reliance on manual processes. In the third quarter of 2018, it cost traditional lenders almost $8,200 to issue each mortgage, according to the most recent Mortgage Bankers Association’s Quarterly Mortgage Bankers Performance Report [source]. Most lenders lose money on every loan they make, according to the report.
By using built-from-scratch, online technology, LendingHome has cut the cost of a mortgage in half, and those savings are being passed on to borrowers in the form of lower rates, lower fees, and no hidden charges.
The solution LendingHome provides has profoundly resonated with the fix and flip industry, popularized by reality shows such as HGTV’s “Flip or Flop” and “Fixer Upper.” House flipping is a key component of the U.S. residential real estate industry, providing a significant upgrade to aging homes in need of repair. More than half of all homes are at least 39 years old, according to the U.S. Census Bureau’s American Housing Survey.
In 2018, LendingHome became the No. 1 lender to the U.S. fix and flip industry, by number of loans and by dollar volume.* It took just four years to overtake an entire industry.
“When we founded the company in 2013, we knew we could do better using technology,” said Matt Humphrey, co-founder and CEO of LendingHome. “Our back-office credit, data, and underwriting – all informed by tech – has really set us apart. We have figured out how to bring data to bear to automate huge pieces of the underwriting process. Data allows us to very accurately predict what the home’s after-repair value will be. Data allows us to make the process hyper-efficient, which lowers the cost and rates for borrowers. As a result, these are high-quality loans, which makes investors on Wall Street very happy.”
In 2018, LendingHome achieved a new company record: the origination of more than $3 billion in mortgage loans since its founding. The company achieved this milestone at an unprecedented pace: it lent its third billion in just eight months, which is 33% faster than the second billion, and 375% faster than it took to lend the first billion.
*LendingHome defines a flipper, or property investor, as someone who has completed at least one home purchase and resale in a year or less with at least 10% profit, or someone who has purchased and resold at least two homes in 1,000 days or less.
LendingHome has designed a better way for people to buy a home. Its built-from-scratch technology has transformed a slow, painful, paper-based process into a fast, transparent, online experience. At the same time, LendingHome is a marketplace lender: institutional and accredited investors have access to attractive, high-yield real estate assets. Since it started lending in mid-2014, LendingHome has funded more than $3.5 billion in mortgage loans. The company is headquartered in San Francisco with an office in Pittsburgh, Pa. To learn more, go to www.lendinghome.com or www.lendinghome.com/careers.NMLS ID #1125207