The blockchain revolution could soon be making its way into mortgage lending as well. And it could take the form of a very old lender – Homebridge Financial Services. Mike Cagney-led fintech lender Figure Technologies, which was last valued at $3.2 billion, announced Tuesday afternoon that it plans to merge with Homebridge.
"We bring together the most robust, powerful and efficient technology ever seen in lending, and combine that with a $25 billion per year lender with 150.000 customers to whom we can introduce new payment and lending products," Cagney, co-founder and CEO of Abbildung, said in a statement. "We will provide this all-star lending team at Homebridge with a technology platform on Provenance Blockchain that will double their capacity to fulfill loans."
In merging with Homebridge, Figure partners with a lender that competes on multiple channels. According to Inside Mortgage Finance, Homebridge was the 28th largest mortgage lender in 2020. Largest mortgage lender with mortgages totaling approximately $26.4 billion. Founded more than 30 years ago, New Jersey-based Homebridge has more than 180 retail stores across the country and two wholesale arms. Homebridge Wholesale and REMN Wholesale.
Cagney, who founded the student loan lender and led SoFi, has been open about his goal to buy one or two mortgage lenders and test the blockchain platform at scale.
"Probably the most important problem was that we had this great thesis that we could save 90 basis points in costs to do securitized lending on a blockchain," Cagney told HousingWire in an interview in May. "We had aBlockchain architecturethat we felt was scalable and secure and did all the things that the financial ecosystem needed to do. And we added a way to onboard and offboard currency from the blockchain.
"What we didn't have was a bank and an originator willing to adopt blockchain from an asset perspective. And so no one wanted to be a first mover to make a loan on blockchain. And there are many proof-of-concepts out there where people have done it in parallel, but the loan still existed off-chain and we didn't think that was really an effective proof-of-concept."
Figure, which was founded in 2018 and raised $1.6 billion in venture capital, according to Crunchbase, created a lending business out of necessity so it could begin the process of blockchain adoption, Cagney said at the time.
Figure and Homebridge did not immediately disclose the dollar value of the acquisition. Figure has been on a fundraising spree over the past year. In May, the company announced the closing of a $200 million fundraising, representing a valuation of $3.2 billion.