Jason van den Brand, founder and CEO of Lenda, an online mortgage company, constantly faces criticism on the idea and desire for fully online digital mortgages.
Even two years ago, in an interview with HousingWire, van den Brand defended the company’s lending style, explaining that most of the negative feedback comes from lenders.
What makes Lenda stand out is that it eliminates the middleman in the mortgage process -- like TurboTax does with tax filings -- to complete loans faster, without paperwork and for less money.
Now that is not to say that loan officers are going away. van den Brand said 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.
And now more than two years later, the story van den Brand tells is not too different, as the industry still hasn't wholly embraced the idea of an online mortgage.
During an interview with HousingWire, van den Brand recapped a recent conference where he was sitting on a panel that discussed the future of mortgages when an attendee got visibly upset at his viewpoint on digital mortgages and eliminating loan officers.
Not letting the discussion go after the session, the panelist confronted van den Brand afterward.
van den Brand explained that the argument against his company is that mortgages are complex, which he doesn’t disagree with.
However, van den Brand clarified on what he means when he says a fully online digital mortgage will be the standard way to originate mortgages.
The key is that people are right in today’s world.
By 2025, 75% of the workforce will be Millennials, said van den Brand. And that group will expect things to be done differently.
So, van den Brand said while he doesn’t disagree with him now, he disagrees with him in the year 2025. By then, Millennials will come to expect a different process.
After walking the disgruntled attendee through the facts, van den Brand surprisingly said that the attendee was so convinced that he even asked van den Brand if he could work at Lenda.
Now, maybe not everyone is as quick to get on board the digital mortgage train, but the shift in the industry is happening.
“We aren’t the first ones to go into this world. That’s a telling leading indicator,” said van den Brand, pointing out the retail industry vs. Amazon and the taxi industry vs. Uber as examples for change.
Even if it’s not exactly in 2025 and instead 2023 or 2027, van den Brand said, “It’s going to happen because it needs to happen if you just follow the customer demand.”
As far as money goes, investors are at least sold on the idea. Lenda recently closed a Series A round of funding, raising $5.25 million from a group of investors. Lenda said it plan to use the money to fill “key” management positions and invest in improving its software platform.
“All of this funding goes toward our technology and back end platform,” said van den Brand. “We have seen a lot of peers spend money on marketing on the front end. We have historically focused more on the back end and what makes a mortgage a mortgage. How do you take customer data and get it underwritten fast and accurately?”
van den Brand explained that every time they raise capital, the vast majority of the investment goes toward technology, which ties back to the overall mission of the company: “Let’s reimagine homeownership.”
Lenda currently services customers in California, Oregon, Texas, Colorado and Washington, and plans to keep growing with at least seven more state applications in the works.