M&A / FundingMortgage

Figure merges with mortgage lender Homebridge

Deal would bring blockchain technology to mortgage lending at scale

The blockchain revolution may soon be coming to mortgage lending. And it could take the form of a very old-school lender – Homebridge Financial Services. The Mike Cagney-led fintech lender Figure Technologies, most recently valued at $3.2 billion, announced Tuesday afternoon that it would merge with Homebridge.

“We are bringing together the most robust, powerful and efficient technology ever seen in lending and pairing that with a $25 billion a year loan originator with 150,000 customers who we can introduce to new payment and lending products,” Cagney, co-founder and CEO of Figure, said in a statement. “We’re going to deliver to this all-star loan origination team at Homebridge a tech platform on Provenance Blockchain that is going to double their capacity for fulfilling loans.”

In merging with Homebridge, Figure is partnering with a lender that competes in multiple channels. According to Inside Mortgage Finance, Homebridge was the 28th-largest mortgage originator in 2020, originating about $26.4 billion in mortgages. Founded more than 30 years ago, Homebridge has more than 180 retail branches nationwide and two wholesale arms, Homebridge Wholesale and REMN Wholesale.

Cagney, who founded and led student loan lender SoFi, has been outspoken about his goal to purchase one or two mortgage lenders and test the blockchain platform at scale.

“Probably the most significant issue was we had this grand thesis that we could save 90 basis points of expense to originate securitized loans on a blockchain,” Cagney told HousingWire in an interview in May. “We had a blockchain architecture that we felt was scalable, secure, and did all the things the financial ecosystem needed to do. And we added a way to onboard and offboard currency out of the blockchain.

“What we didn’t have was a bank and originator ready to embrace the blockchain from an asset standpoint. And so nobody wanted to be a first mover to originate a loan on blockchain. And there are a lot of proof of concepts out there where people were doing 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 has raised $1.6 billion in venture capital, ended created a lending business out of need 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’s been on a fundraising tear over the last year. Last week it closed on a $200 million Series D fund raise, giving it a valuation of $3.2 billion.

Check back for updates on this breaking story

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