Hello, LOs!
Roughly three months after he first revealed his plans at HW Spring Summit, Mike Cagney has struck a deal to acquire a residential mortgage lender. And it's a lender with heft.
Figure Technologies, the blockchain-focused fintech lender he founded in 2018, is in the process of merging with retail and wholesale lender Homebridge Financial Services. Terms of the deal were not disclosed.
I caught up with Cagney late Tuesday afternoon to achieve a clearer understanding of why they opted to partner with Homebridge, and what the transition to blockchain would look like.
Here's a very condensed version of the interview. (We'll have a fuller analysis story on HW+ in the next few days, so please keep an eye out.)
James Kleimann: You had a lot of interest from quite a few different lenders. Why Homebridge?
Mike Cagney: When it became known that we were looking at various mortgage companies, a lot of folks came to us, so we got a chance to look at a lot of different businesses. What was unique about Homebridge was a combination of the management and what they've been able to accomplish, and the reputation of the organization, which I think is outstanding. It's a business with scale but wasn't overly investing in technology. We want to be able to bring technology in a way to provide pretty significant disruption to those operating characteristics of the business... and downstream benefits. A couple things that are going to happen for Homebridge out of this are, one: we're going to be able to lean in and bring a whole suite of products that the loan officers haven't historically had access to. And ultimately the business has to scale to do some of the things that we're trying to do on the technology side, the process of origination, capital markets. So there's a lot of upside around that.
JK: What does the process of implementing blockchain with a lender like Homebridge look like? How do you port over this tech platform?
MC: We're already using it extensively in our non-agency market. A logical first application is for high balanced jumbo loans that aren't going to the agencies, leveraging blockchain to deliver those loads faster and more efficiently.
JK: Any timeline for Fannie, Freddie, Ginnie?
MC: No timeline, It's going to be a function of when they're ready for it. We're ready to engage.
JK: If I'm an LO at Homebridge, what does this partnership look like for me?
MC: Not a lot will change initially. The goal is to allow them to focus on what they do best, which is originate loans and help out the customer. What they're going to get very quickly is the ability to add more products that their customer needs. For example, if a customer has a really low mortgage rate, he or she could cash out, leverage a HELOC in lieu of a mortgage. Or a customer that might normally need to do PMI might want to do a piggyback as a way to facilitate that. The LOs are going to have a broader toolkit... We're also going to be able to use things like the other lending products within Homebridge...so there will be a lot more lead-gen opportunities for the LOs...over time we'll work on changing things like LOS.
LOs, I'd love to hear your thoughts on the deal. And if you are one of the 2,500 workers at Homebridge, please share your initial take with me anonymously. I'm at jkleimann@housingwire.com. Stay tuned for the upcoming HW+ feature!
James Kleimann
Managing Editor, HousingWire
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