I’ve been a mortgage customer for almost 30 years. And unlike most financial products, the mortgage process has gotten more convoluted in those three decades. There are good reasons for many of the added hassles, but the overall experience leaves a lot to be desired, especially if you are not a standard W2 wage earner. The poster-child for bad UX was last year’s denial of a mortgage to previous Fed chairman, Ben Bernanke. 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 had only 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, Lending Tree, 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)
- MortgageHarmony (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 a toll on innovations. But things are beginning to change. First, we have a three companies at next week’s FinovateSpring taking on various aspects of the mortgage process:
- Hip Pocket: Mortgage-comparison tools
- Lending Tree: Mortgage rate tracking tools and lead gen
- Top Image Systems: eFlow mortgage process for financial institutions
And there is also some early stage startups forming with stated missions to improve various parts of the mortgage experience, including:
- Ethos Lending: Raised $8.2 million in April 2014
- Expedite Financial: San Francisco-based startup founded in 2013
- Floify: Boulder, Colorado, company founded in 2012
- HomeTrackr: Aiming to be the “Carfax of homes”
- Lenda: Raised $1.5 million in Sep 2014
- LendingHome: Raised $70 million Series C in March 2015
- Sindeo: Raised $5 million Series A in Feb 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.