UpEquity raises $25M in Series A round

Austin-based mortgage tech platform UpEquity raised $25 million in a Series A funding round led by Next Coast Ventures.

The funding consists of $7.5 million in equity financing and $17.5 million in venture debt, UpEquity said in a statement.

The funding will go toward product development and business development with real estate agents to reduce their time-to-close to 10 days, significantly higher than the industry average.

UpEquity essentially makes free cash offers but charges interest – currently 2.5% – on the loans it provides to homeowners, who can make an offer on a house without having to go through a bank to get a mortgage. Homeowners then make monthly payments directly to UpEquity to pay off the mortgage on the home.

The tech startup says its method is a way to “democratize” the homebuilding process, especially for first-time homebuyers. Sellers are more likely to accept cash offers, which UpEquity claims translates into up to 4% savings for the all-cash buyer.

How this real estate brokerage’s unique model generates more profit for agents

Today, both sellers and buyers expect to handle a majority of the process online. For a well-prepared real estate brokerage, this holds a promising future.

Presented by: 1 Percent Lists

“Our goal is to finally align the mortgage industry with consumer interests,” Herman said in a statement. “This funding is validation that consumers, real estate agents and venture investors understand the power of removing friction from the home-buying process, not only for personal advancement, but to attain the American Dream.”

The company uses uses automated underwriting technology to process the loan.

If a purchaser doesn’t buy the home, then UpEquity owns the house. UpEquity CEO Tim Herman told TechCrunch that only two of the 300 deals the company has done have failed.

The company claims it originated $100 million in mortgages in 2020. According to NMLS data, UpEquity has eight mortgage loan originators working at the company. Dani Hernandez is head of mortgages at the Austin-based startup.

The company is currently originating loans in Texas, Colorado, Florida and California. It plans to expand into new markets this year.

Source: housingwire.com

Chase sees huge digital adoption in home lending business

The following is an excerpt from an interview originally published by FinLedger with Rohan Amin, Chief Information Officer of Chase’s Consumer & Community Banking unit. The complete interview is available here.

When the coronavirus pandemic hit in 2020, banks were among the many institutions moving quickly to adapt to all the changes that came with it.

Suddenly, mobile and digital banking were on the rise as fewer people went to branches in person.

When it came to institutions moving quickly to meet shifting consumer needs, JPMorgan Chase was no exception.

FinLedger talked with Rohan Amin, Chief Information Officer (CIO) of Chase’s Consumer & Community Banking (CCB) unit, about the acceleration and the various ways his firm has navigated the pandemic.

Amin manages a technology budget of $4 billion – one-third of Chase’s overall $12 billion budget – and over 12,000 technologists globally. In this role, Amin is in charge of all the tech in the firm’s branches, ATMs, on its mobile apps and all its digital properties.

FinLedger: One of the things we’ve all seen obviously with the pandemic is the increase in digital banking. How has Chase adapted to this? I assume you were already in the process of transitioning more functions to be digital or mobile but how did the pandemic accelerate any of those initiatives?

Amin: We’ve definitely learned a lot for the pandemic. And in many cases, the pandemic really has accelerated the shift towards digital banking. 

“…more than half of the applications for home loans are being completed digitally, which is twice the volume that we saw in Q1 of last year.”

Rohan Amin, Chase CIO

People want to be able to bank online and not have to necessarily always go in person. Here’s just a couple of stats for you. We have about 55 million digitally active customers, which is up 6% year on year, and now we have over 40 million active mobile customers, which is up 10% on a year on year basis. To give you an example of a customer behavior that has certainly changed during the pandemic, we look at pre-COVID and current stats. Right now, mobile check deposits are a great example of that. Depositing a check using a mobile device now represents 40% of all check deposit volume. And pre-COVID, that was 30% – that’s 10 percentage points movement during the COVID period. And we’ve had mobile check deposits for a while, so it’s a good example of just the acceleration that we’ve seen in there. 

Another one would be home lending. If you think about getting a mortgage, which is one of the most important financial transactions for people in their lives, but you know the amount of forms and paper and other things that’s involved with that. But now, more than half of the applications for home loans are being completed digitally, which is twice the volume that we saw in Q1 of last year. Another example of how even with something as sensitive and personal as mortgage applications, we’re seeing huge adoption of digital.

Also, we had recently done a study of digital banking attitude and customers’ perception of banking digitally. A significant number of customers, more than 50%, agree they use digital banking tools more due to the pandemic than they did the year before. And so it was happening before the pandemic. But certainly, the pandemic has certainly accelerated some of that as well.

Source: housingwire.com