Ally Financial, which all but exited the mortgage business back in 2012, got back into mortgages in earnest in 2016 when it launched a new direct-to-consumer mortgage offering called Ally Home.
Now, Ally is taking its mortgage business to the next level by going digital with help from Better.com (formerly known as Better Mortgage).
Ally and Better announced Thursday that the companies are partnering to launch a digital mortgage platform for Ally.
Specifically, the companies are launching a “new end-to-end digital experience for consumers looking for a mortgage loan from Ally.”
And beyond simply partnering to go digital, Ally is also investing in Better.
According to the companies, Ally is making an “add-on investment” to Better’s recent Series C funding round, which saw the company raise $70 million.
That funding was led by American Express Ventures and the Healthcare of Ontario Pension Plan, and included participation from some of Better’s earlier investors, which include Goldman Sachs, Kleiner Perkins, and Pine Brook.
Now, Better is also backed by Ally. As part of this deal, Ally is buying a piece of Better as well. According to Ally, its strategic-investment arm Ally Ventures is making the investment, “significantly increasing” Ally’s stake in Better.
“Strategic partnerships are an important component of our growth strategy. At Ally Ventures, we look for companies that are disrupting their industries for us to invest in and partner with to bring innovative products to the market. We felt a strong strategic and cultural fit with Better.com,” said Ally Chief Strategy Officer Dinesh Chopra.
“The mortgage industry is ripe for digitalization, and our investment and partnership will allow us to deliver an industry-leading digital mortgage experience,” Chopra continued.
Users of Ally’s digital mortgage platform will be able to obtain a mortgage pre-approval in “as little as three minutes and lock in a rate in as few as 10 minutes,” the companies said.
“Combining the capabilities of Ally Bank with the digital platform of Better.com will bring speed and simplicity to the mortgage origination and funding process, creating a truly digital experience,” the companies said in the announcement.
“Providing frictionless, digital experiences to our customers is core to Ally’s strategy. We’re revolutionizing digital banking by putting all of our customers' core financial services needs at their fingertips,” said Diane Morais, Ally’s president of consumer and commercial banking products. “With Better.com, we will deliver best-in-class mortgage experiences in a highly innovative and scalable way, furthering our role as a financial ally for our customers.”
According to the companies, the “new capabilities” will initially be piloted in nine states, including Arizona, Connecticut, Louisiana, North Carolina, Oregon, Pennsylvania, Tennessee, Texas and Washington, later this year.
The companies anticipate Ally’s digital mortgage platform to be available across the U.S. by the end of 2019.
“Our partnership with Ally supports our goal of transforming the mortgage industry across the board and delivering a better mortgage experience to all consumers,” said Vishal Garg, CEO and founder of Better.com. “Additionally, with Ally's investment in Better.com, we become partners not only in our shared vision for a seamless customer experience in home finance, but also in the long-term success and future of the mortgage industry.”
