Mike Cagney’s Figure Technologies announced a collaboration with CMG Financial, CrossCountry Mortgage, Fairway Independent Mortgage and The Loan Store as private-label partners.
The collaboration with several of the country’s top independent mortgage banks is aimed at getting Figure’s home equity line of credit (HELOC) products in front of homeowners who have seen equity grow in recent years.
Each of Figure’s new partners will leverage Figure’s HELOC technology to create a branded product for their customers, the firm said in a statement.
“With an entirely digital application process, new customers from these private label partners will be able to apply and get approved in as little as five minutes,” Figure said.
Approval may be granted in five minutes but is ultimately subject to verification of income and employment. A five business day funding timeline assumes closing the loan with Figure’s remote online notary. Funding timelines may be longer for loans secured by properties located in counties that do not permit recording of e-signatures or that otherwise require an in-person closing.
High tappable home equity — the amount available for homeowners to access from their home while retaining at least 20% equity in their homes — has been a bright spot in a bleak housing market due to stubborn inflation and high interest rates.
Almost all HELOCs come with variable interest rates and many homeowners try to avoid variable rates because of their uncertainty.
But when rates are high, a HELOC’s variable rate could be more likely to decrease as the years pass while a cash-out refi usually has a fixed interest rate.
In terms of dollar volume, there was an estimated $251 billion in HELOC originations during all of 2022, up from $182 billion in 2021.
Figure recently eclipsed over $6 billion in HELOC originations, the company said.
Founded in 2018 by Cagney, the former head of SoFi, Figure uses proprietary platform Provenance Blockchain for loan origination, equity management, private fund services, banking and payments, according to its website.
Cagney’s attempt to bring blockchain technology to mortgage lending at scale dates back to August 2021. Figure announced its intention to merge with Homebridge Financial Services, but regulatory delays led to a cancellation in June 2022.
Figure also planned to go public with special purpose acquisition company (SPAC) Figure Acquisition Corp. last year.
But with a combination of sharp interest rates and rising redemption rates – which point to how many investors are exchanging their shares for their money back – made it an unfavorable environment for SPACs, which led to the delisting of Figure Acquisition Corp from the New York Stock Exchange in December 2022.
In June, Figure launched a wholesale lending platform, enabling wholesale LOs to broker loans directly.
