Lenda opened its doors for business in October 2013, and since then, it has shocked the industry with its rapid growth in online lending; recently announcing its latest expansion into Washington.

The San Francisco firm was born in the heart of Silicon Valley by Jason van den Brand, founder and CEO of the company.  

The company, which eliminates the middleman in the mortgage refinancing process -- like TurboTax does with tax filings -- to complete loans faster, without paperwork and for less money, also announced that it closed $25 million in refinancing loans since October.

And that now that Lenda’s done all the work to see what it looks like on the development, marketing and operating side, it can go to other states a lot faster.

“We have a really good head start in the lending industry that is now cropping up since the Great Recession. A lot of the bad blood of banking stemmed from the recession. We are really pushing the paradigm in the home loan space that you don’t have to go into your local store,” van den Brand said in an interview with HousingWire.  

Since Lenda started, it has graduated from the San Francisco-based technology incubator 500 Startups and raised $1.8 million in seed funding to support the company’s growth into new markets.

It also experienced 25% month-over-month growth rate in the fourth quarter of 2014 and plans to expand into three additional states by the end of the first quarter of 2015 and across the country by the end of 2016.

Right now Lenda is only in the refinance business but has plans to go into the purchase market as well. 

“We started with refi because there are a couple less hands in the pie. When borrowers go through a refi, they have been through the typical transaction. And so what we found is that when people come into refinancing, they say that they wish their purchase loan was like this,” van den Brand said. However, he explained that there are still some products things that they need to do.

BROKER BACKLASH

But Lenda’s growth in mortgage technology comes with its fair share of industry backlash.

While Lenda still supports the face-to-face interaction that comes with estate agents because of their knowledge, on the loan side, van den Brand explained that this is a commodity and nothing more.

“You know your credit score and all the things that you need to know about buying a home. You should get the best deal, and the only reason that doesn’t happen is because you have mortgage brokers and banks turn it into a really expensive transaction, but in five years it will not be this way.”

van den Brand explained that they have had a lot of negative feedback from lenders, but it comes as no surprise.

“Loan officers hate us, and I don’t blame them honestly. I think this is probably how stockbrokers felt when they heard about E*TRADE and accountants when they heard about Turbo Tax. This is just innovation and progress. As much as it hurts and cuts deep, we still have to press forward because we know this is where the industry is going,” he said.  

Now that is not to say that loan officers are going away. van den Brand added that there will always be that niche market. All they are suggesting is that there is not going to be as many. “There is plenty of room at the $1.4 trillion table that we sit at in the mortgage industry,” he said.  

van den Brand said that one major argument they are hearing about their company is that they don’t understand how intricate the market is.

“We understand how complex mortgages are, that’s no secret. It is extraordinarily complex. But where we differ is that we think computers are better with complexity. It’s computerized. They do the massive trades because they are quick, which is why it is faster and cheaper,” he said. “We argue that this change is going to happen in mortgages as well. Software came in and eliminated human error and human greed. Plus, the Internet is always open.”

MOVING FORWARD

Moving ahead, van den Brand said that they are constantly looking for larger pools of money that understand the model we are building and are apart of it. “We can push this company further, but in order to do so, we need people behind the scenes that have money to lend,” he said.  

“We can’t predict what will happen, but we can push it in the right direction of where we want it to be. The time is now, and there is a lot of buzz around financial technology,” said van den Brand.

Lenda is not alone is movement though. Don Iannitti, president and CEO of DocMagic, told HousingWire that this will be a big year for moving the mortgage market online.

“Currently, our biggest opportunity is going to be ‘riding’ the eWave.  This means that we will be material in transitioning increasingly greater numbers of our customers to an eEnvironment that is highly regulated and highly competitive. Customers are unique and one size doesn’t fit all.  It will be a time of great learning for everyone in this market --- everyone,” said Iannitti.   

DocMagic is one of the lead vendors participating in the Consumer Financial Protection Bureau’s eClosing Pilot, which is in direct response to providing an automated solution to the new Integrated Disclosure, (TRID) regulation for August 1st.