Fintech startup LendingHome reaches a major milestone, surpasses $5 billion in loans in five years
What if Silicon Valley reimagined the mortgage process from the ground up, the right way? That was the question the founders of LendingHome asked themselves in late 2013. The founders realized the current mortgage system was broken and decided to fix it.
Fast forward to today, the industry’s No. 1 fix-and-flip lender, announced today it has originated $5 billion in loans in just five years of mortgage lending. To date, the startup’s capital has financed the purchase of more than 23,000 homes, while returning over $3.5 billion in principal and interest to investors.
Founded in 2013 by James Herbert and Matt Humphrey, the San Francisco, Calfornia-based LendingHome offers a flexible, simple, fast, transparent, and reliable way for borrowers to get a mortgage. The team at LendingHome has brought together the best technology, operations, and data to build the next generation mortgage platform. This meant rethinking customer acquisition, user experience, credit analysis, algorithmic underwriting, operational efficiency, loan servicing, capital markets, financial automation, consumer brand, and more.
LendingHome has designed a better way for people to buy a home. Its built-from-scratch technology has transformed a slow, painful, paper-based process into a fast, transparent, online experience. Since it started lending in 2014, LendingHome has funded more than $5 billion in mortgage loans.
“Every startup hopes to disrupt an industry, and we believe we are fundamentally changing the lives of house flippers by providing consistent access to capital in an efficient, transparent way since 2014,” said Matt Humphrey, co-founder and CEO of LendingHome. “We want to revitalize homes, and we want our borrowers to achieve their financial goals. Our proudest moments have been when people tell us that house flipping was their hobby, but now, because of us, they were able to quit their jobs and make real estate investing a full-time career.”
Earlier in 2019, Humphrey hit the road, travelling to eight states and sitting down one-on-one with 59 customers to understand what fuels their success, hinders their business expansion, and how LendingHome can be a better partner in achieving their goals. The result is a new loan product for residential rental properties such as single family homes and duplexes.
“The ‘rent versus own’ statistic is staggering,” said Humphrey. “Renting a three-bedroom property is more affordable than buying a home in 59 percent of U.S. counties*. The housing market needs rental homes, just as it needs flipped homes. Yet banks aren’t serving these real estate investors; they either cap the number of properties someone is allowed to own, or they won’t lend to them in the first place because these loans don’t conform to the credit restrictions of a traditional mortgage. We are excited to fill this unmet need, just as we did for short-term flip loans.”
Deepak Aggarwal was one of LendingHome’s beta users for the new product: “My bank was limiting me to 10 properties, so then I turned to private lenders and brokers, and they were charging a lot of fees. With LendingHome, there’s no limit on how many properties you can hold. I’m renting out over 40 homes right now. The independence, the freedom I have received from LendingHome is unbelievable. I can call a real estate broker and my first line is, ‘Hey, I’ll close on the loan next week.’ And they’ll say, ‘Are you really serious?’ I say, ‘Yeah, I work with LendingHome.’ They still don’t believe me, but we have done some closings in less than a week. I think LendingHome should be called ‘The Real Rocket Mortgage.’”
Early on, LendingHome’s founders made it their mission to prove to Wall Street – through data, analytics, and complete transparency – that fix-and-flip loans are an asset class that could be standardized. As a result of its success, LendingHome has strong relationships with institutional investors, meaning borrowers can be confident in LendingHome’s ability to provide a constant flow of capital and favorable loan terms.