Disruptive lending platform draws attention, funding from community lenders.
Fintech startup LenderClose announced it has secured the funding it needs to add 25 employees to the fast-growing company. The two-year-old Des Moines-based startup launched in 2016 when lending technology pioneer Omar Jordan saw an opportunity to upend the underwriting process.
Since its launch in March 2016, LenderClose has added 100 lenders to its client list. February 2018 marked a record month of revenue for the startup, followed by another record month in March. That same month, the startup secured direct investment from two Iowa credit unions and added Chief Operating OfficerBen Rempe to its team.
LenderClose’s latest round of funding was led by Next Level Ventures, which is a venture capital firm that invests in growing companies based in Iowa. Its portfolio includes fintech firm Dwolla.
Borrowers have always wanted a fast ‘yes’ from lenders. But that urgency has been cranked to 11 today. Omar Jordan – LenderClose, CEO
“This team has done some pretty impressive things with limited resources,” said Scott Hoekman, co-founder and principal of Next Level Ventures. “This investment is gas in the tank that will allow LenderClose to do much more. LenderClose has a product that works, clients who have validated the solution and a growing team supporting the vision for rapid scale. You put more money alongside that momentum, and you’ve got something pretty exciting.”
Borrowers will benefit from LenderClose because of how dramatically its speeds up the loan application and approval process. The LenderClose platform becomes a loan officer’s digital hub, allowing him or her to secure documentation and services the borrower may otherwise need to provide. With API connections to every vendor it takes to originate a mortgage or HELOC, LenderClose gives community lenders immediate access to everything from credit scores and flood determinations to notary signing and county recorder services. The result is a streamlined and vastly accelerated underwriting process.
Community lenders benefit from significantly improved efficiency, allowing them to close more loans, more quickly, thus attracting more customers to their doors. According to Jordan, this is becoming increasingly important for community lenders as they compete with mega bank financials and fast-moving digital solutions for borrower business. According to Fannie Mae’s Q1 2018 Mortgage Lender Sentiment Survey, “competition from other lenders” set a new survey high for the fifth consecutive quarter as the key reason cited for lenders’ lower profit margin outlook.
“Borrowers have always wanted a fast ‘yes’ from lenders,” said Jordan, who consistently led the nation in mortgage originations while serving as AVP, sales branch manager for Household Finance, now HSBC. He has since built and sold two lending technologies companies. “But that urgency has been cranked to 11 today.”
Rempe added, “Consumers are used to getting what they want, how they want it, right now. Starbucks has your custom-ordered coffee ready before you even get there; Indochino has a made-to-measure suit on your doorstep in a couple days. Lenders understand expectations are changing, and they want to give borrowers that ‘yes’ right away. But, they have massive checklists that have to be addressed first. The LenderClose platform helps loan officers drive through the checklist, so they can deliver ‘yes’ faster than ever before.”
Community lenders that have added LenderClose to their lending programs report significant improvements in their operations. Some even credit the platform with launching entirely new products for their institution’s lending effort.
“Our home equity program was essentially nonexistent prior to joining LenderClose,” said Billy Hernandez, chief lending officer of California Bear Credit Union. “Our main technology partner wasn’t set up to take on home loan applications, and we were getting frustrated trying to satisfy a growing demand for these products from our members. Since adding LenderClose, we’ve had a tremendous amount of success with our home equity program. We’ve even hired a loan officer to keep up with the demand.”
LenderClose executives anticipate the platform’s technology will continue to advance over the next 12 to 18 months. Plans include the addition of artificial intelligence capabilities to the platform, as well as a consumer-facing mobile app to give consumers even greater visibility into the lending process as it moves from application to approval.
About LenderClose, Inc.
LenderClose is a powerful platform that digitizes the underwriting process and speeds up the lending cycle. The web-based hub gives loan officers instant access to the latest real estate lending technology, products and solutions so they can become dominant lenders in their local markets. To learn more, follow LenderClose on LinkedIn or at lenderclose.com.