LenderClose recently secured funding necessary to hire 25 new employees, continuing its rapid growth, the company announced. The two-year-old fintech startup launched in March 2016 when lending technology professional Omar Jordan decided to try to upend the underwriting process.
Since its launch, LenderClose has added 100 lenders to its client list, according to a company a press release. February 2018 marked a record month of revenue for the startup, followed by another record month in March. That same month, the startup added two executives to its team – Chief Operating Officer Ben Rempe and Vice President of Business Development Brian Storey – who bring a combined 30 years of financial services experience to the startup.
LenderClose’s latest round of funding was led by Next Level Ventures, an Iowa-based venture capital firm that invests in growing companies, with a portfolio that also includes the fintech firm Dwolla.
“This team has done some pretty impressive things with limited resources,” Next Level Ventures co-founder and Principal Scott Hoekman said in the release. “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.”
The LenderClose platform is designed to be a loan officer’s digital hub. With API connections to every vendor it takes to originate a mortgage or home equity line of credit (HELOC), LenderClose offers community lenders immediate access to a comprehensive suite of reports and services – from credit scores and flood determinations to notary signing and county recorder services, the release states. The result is a streamlined, accelerated underwriting process, which is, according to Jordan, an increasingly essential capability for community lenders.
“Borrowers have always wanted a fast ‘yes’ from lenders,” Jordan said. “But that urgency has been cranked to 11 today.”
Jordan consistently led the nation in mortgage originations while working for Household Finance, now HSBC, as a sales branch manager. He has since built and sold two lending technologies companies.
“Consumers are used to getting what they want, how they want it, right now,” Rempe added. “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.”
A positive and fast borrower experience is critical as market pressures increase. In 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.
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,” California Bear Credit Union Chief Lending Officer Billy Hernandez said. “Our core system 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.”