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MAXEX Raises $38 Million In New Funding

MAXEX, LLC, a residential mortgage loan exchange provider, announced today that it has successfully closed a $38 million new funding round led by Moore Asset Backed Fund, LP, an investment fund managed by Erik Siegel of Moore Capital Management, LP.  GreensLedge Capital Markets LLC was the sole placement agent.

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MAXEX’s prior Series A rounds brought in over $35 million from private equity and venture investors, including Ellis Capital, Fenway Summer Ventures and Bienville Ventures, bringing aggregate capital raised to date to more than $73 million. Additionally, J.P. Morgan has been a strategic commercial partner in MAXEX since late 2017.

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MAXEX will utilize the additional funding to enhance its exchange operations and counterparty structure as well as continue to build out its innovative end-to-end cloud-based platform, which is transforming the trading of residential mortgages between participants in the secondary mortgage market. MAXEX’s exchange brings centralization, standardization, transparency, automation and a streamlined settlement process that translates into a more open, efficient and less risky secondary market.

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MAXEX is now operational and has traded more than $2.3 billion of mortgage loans between select participants, including more than 80 approved sellers and buyers that range from bank and nonbank originators to a number of the most active Wall Street dealers. MAXEX has contributed loans into 16 separate private MBS securitizations and plans for a broader public launch later in the year. The company currently has over 50 employees and is seeking to add additional senior level positions to its team in technology, operations as well as sales and marketing.

“MAXEX has been quietly building technologies that will revolutionize the $2 trillion per annum secondary mortgage trading market and level the playing field for all participants,” said Tom Pearce, CEO and Chairman of MAXEX. “This next level of funding will enable us to further enhance our technology platform as the backbone for trading and settlement in the secondary mortgage market. We are pleased to have our new investors join our existing investor group as we prepare for a broader public launch.”

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Banking On Technology

As we have seen, technology does make a difference. It makes the mortgage process more efficient and these days lenders need to strive for maximum efficiency. We can also see the value of technology when investors start funding these newer industry players. For example, Roostify announced the completion of a $25 million Series B round of financing. The round included new investments from Cota Capital, Point72 Ventures, and Santander Innoventures, the venture capital arm of Banco Santander, as well as additional funding from previous investors JPMorgan Chase, Colchis Capital, and a subsidiary of USAA. The new funds will power the company’s ambitious growth goals, including a deeper presence in the enterprise space, rich product enhancements, and expansion into new markets.

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“We were immensely impressed with what Roostify has accomplished in the last four years,” said Bobby Yazdani, Cota Capital’s Managing Partner. “Roostify has evolved not only their own offering and product focus, but the market as a whole, helping the lending industry transform itself for the digital age. We’re pleased to be a part of that transformation, and look forward to seeing Roostify and the industry continue to move forward.”

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Launched in 2014 with the aim to speed up the mortgage process and eliminate paper-bound inefficiencies, Roostify has grown into an enterprise-class digital lending platform used by lenders across the US to accelerate, simplify, and reduce costs around the origination process. Roostify’s cloud-based, API-enabled, partner-friendly solution allows lenders to offer their clients a seamless, branded experience from searching to closing their home loan. With the additional resources provided by the Series B financing, company leadership plans to accelerate delivery of its roadmap and drive market expansion.

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“Four years ago, Roostify was a pioneer in moving the consumer home lending experience online. We sought to deliver an offering that we would experience ourselves for our own home purchases,” said Rajesh Bhat, co-founder and CEO of Roostify. “Since then, a digital strategy has evolved from an ambition to a business imperative for our customers. Lenders now realize the value of providing consumers with a transparent, mobile, and seamless experience to obtain a loan without needless stress-inducing delays and red tape. We have developed a solution that allows lenders of all sizes to give their teams a tool to digitally engage with clients and to bring the loan origination experience to the consumer.”

Roostify has made several recent moves to expand the platform beyond the core loan application and processing experience. The company recently announced an integration with LendingTree, which enables consumers to shop for a loan and then get that loan with their preferred lender in just a few clicks, and previously introduced the new Decision Builder tool to improve education for consumers and lead quality for lenders.

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Lender Reaches Funding Milestone

loanDepot confirmed its drive toward record growth by funding $100 billion in home, personal and home equity loans since inception in 2010. In total, loanDepot has grown originations on average by 70 percent annually since 2010, and grown its market share by 400 percent since 2012.

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The $100 billion milestone builds on a phenomenal year in 2016 in which loanDepot funded $38 billion in loans, a 33 percent increase compared to 2015, and nearly five times its funding volume in 2013. The company also grew its top line revenue in 2016 by approximately 41 percent compared to a year earlier, nearly 140 percent higher than 2014.

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“In 2010, we launched loanDepot when many lenders were retreating from the market. What we’ve accomplished in seven years is really something special and extremely rewarding,” said Chairman and CEO Anthony Hsieh. “loanDepot has grown into a powerful national brand that challenges the status quo of traditional banking every day. Our $100 billion in fundings has been fueled by millions in capital strategically reinvested back into the company to sharpen our technology, expand our products and attract the nation’s top talent. We’re very excited with the work we’re doing to help borrowers achieve their dreams, and we’re looking forward to the next chapter for loanDepot and our nation.”

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Ranked by Inc. Magazine as one of the fastest-growing private companies in 2016 and 2015, loanDepot opened three new campuses in 2016 across the country to expand its Direct, Retail, and Wholesale business channels. Growing its nationwide employee base to nearly 6,000 strong today, loanDepot recently signed a lease to open a new 65,000 square foot business campus located in Irvine, California. The opening of this new campus will support loanDepot’s accelerated growth and expansion, and reflects the company’s commitment to developing market-leading technology, digital product delivery platforms and processes that will usher in the next generation of consumer lending.

Today, the loanDepot marketing platform acquires more than 500,000 potential borrowers every month, up 25 percent from a just over a year ago. The company maintains a total borrower data base of more than 15 million consumers nationwide.

“Unlike most lenders, loanDepot isn’t burdened with legacy issues that impede advancements in building proprietary technology, product delivery systems that bring greater efficiency to the lending process, or regulatory compliance. Our diversified origination platform is purpose built to pivot quickly in fast-changing market conditions. This philosophy empowers us to further penetrate purchase, refinance and consumer loans,” continued Hsieh. “This is an ideal time for loanDepot to gain greater market share as the leading solution to satisfy consumer demand for a highly efficient, tech-based lending experience that’s easy to navigate and supported by world class customer care.”

In a move to drive revenue and higher end-to-end service levels, last month loanDepot announced the acquisition of Closing USA and American Coast Title to its portfolio of brands. The move demonstrates loanDepot’s power to add and integrate multiple services and channels into one powerful technology-based lending platform that is redefining America’s lending landscape and how consumers think about accessing credit.

Today, the top five largest retail mortgage lenders, including loanDepot, are Wells Fargo, Quicken Loans, Bank of America, and JP Morgan Chase, according to the most recent Inside Mortgage Finance (IMF) report on the nation’s top retail mortgage lenders.

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