Former SoFi CEO Mike Cagney’s blockchain lending startup Figure unveils first loan program

Launches first home equity loan product, grants approval in 5 minutes, funds in 5 days

Former SoFi CEO Mike Cagney is officially back and has officially pivoted to blockchain.

Cagney's new company, Figure Technologies, is now rolling out its first lending product: the Figure Home Equity Loan.

Figure launched earlier this year after Cagney resigned from SoFi amid a workplace culture controversy at the online lender. Cagney co-founded SoFi and served as its CEO before resigning last year after reports emerged about the alleged toxic culture at SoFi, with a lot of coverage putting Cagney at the center of the issues. 

SoFi grew quickly and gained serious financial backing, but things changed when allegations about the culture at the company began to come out, including claims that it fired a former employee for reporting sexual harassment allegations to his superiors.

Cagney eventually left the company and started Figure, which intends to leverage blockchain, AI and advanced analytics to elevate the lending process, especially for home equity.

Homeowners are currently sitting on a mountain of home equity wealth, and Figure wants to help them take advantage of that. In fact, CoreLogic's Home Equity Report revealed homeowners with mortgages have seen their equity steadily increase, resulting in a $1 trillion gain from 2017. But despite these record gains, studies show homeowners just aren't tapping into this wealth.

Enter Figure. Its focus? Equity release.

The company said it plans to introduce home improvement loans, HELOCs and buy-lease back products for retirement and it just introduced its first product: the Figure Home Equity Loan.

The loan allows homeowners to borrow from $15,000 up to $100,000 of their equity with loan terms ranging from five to 15 years and annual percentage rates that start at 5.99%. Plus, Figure waives the appraisal fee.

According to Figure, it is essentially a hybrid between a traditional home equity loan and a HELOC, because consumers have fixed rates and are given their funds up front.

To make the loan especially appealing, Figure is using its tech abilities to grant approval in five minutes and fund in just five days in a completely digital process.

“Figure has completely revamped what’s been a frustrating, time-consuming and expensive undertaking,” said Arthur Levitt, former chairman of the Securities and Exchange Commission and a current advisor to Figure. “Consumers are bound to benefit from their continued innovation.”

According to the company, Figure's loan offers homeowners comparably lower interest rates and monthly payments than they would receive if they took out a personal loan, and the process is simple. Borrowers just need to fill out an online form, select the desired loan amount and term and sign digitally.

Chief Marketing Officer Wendy Harrington said the company is transforming the entire customer experience by creating a faster, simpler and more convenient way for homeowners to access the equity in their homes.

“The status quo was far from ideal, so we reimagined it to reflect the advancements in technology to educate and empower people to make good financial decisions as they unlock their home equity to consolidate debt, invest in home improvement, or fund major purchases,” Harrington said.

The product is especially important considering seniors haven’t been saving enough money for retirement, according to Harrington.

“By the age of 64, the retirement account balance for most seniors is just $15,000, and yet 75% of households will have the average equity of $165,000,” Harrington said. “So, it’s a better financial choice, relative to higher rate products.”

Harrington said that personal loans continue to get more expensive, but fixed-rate products are a much more cost-efficient solution.

“Home equity is important for many reasons. One is that interest rates are on the rise and people have historically used cash-out refinances on their mortgages to tap the funds that they need,” Harrington said. “But as rates climb, funds have dried out and no one wants to refinance the higher rates.”

“The cost of medical expenses and living is increasing,” Harrington said. “Sadly, Social Security isn’t going to pay them enough.”

Figure wants to provide seniors with lower-cost financing options, helping them navigate the financial hurdles of retirement, according to Harrington.

Although the company just launched in January, it now has plans to launch a new sell and leaseback product for empty nesters and retirees in late October.

“The number of bankruptcies for seniors has tripled since 1991, and people haven’t saved enough from retirement,” Harrington continued. “Figure would like to find a way to help.”

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