Nima Ghamsari, co-founder and chief executive officer of Blend, speaks during the Sooner Than You Think conference in Brooklyn, New York, Oct. 16, 2018.
Alex Flynn | Bloomberg | Getty Images
Banks that have lost ground as Quicken Loans became the biggest U.S. mortgage lender can now fight back with help from a Silicon Valley start-up.
Blend, a fintech firm that processes $2 billion in loans daily for banks, has simplified the once-paper-heavy process of getting vetted for a mortgage into what it calls a one-tap pre-approval, according to CEO Nima Ghamsari.
Banks have historically used armies of mortgage brokers to gather income and asset documents from prospective borrowers, meaning that it could take days or weeks to get a pre-approval letter. Meanwhile, Quicken Loans and its Rocket Mortgage brand, which advertises mortgage approvals in as little as 8 minutes, has steadily gained share after the financial crisis, becoming the biggest U.S. residential mortgage lender in 2017.
Using Blend’s technology, U.S. Bank had previously shortened the pre-approval process to under 30 minutes, according to Tom Wind, executive vice president of consumer lending. Now, as one of the first users of Blend’s one-tap, that process has been condensed to about 3 minutes, Wind said.
Blend’s software uses what your financial institution already knows about you – your income and assets held at the lender – to almost immediately calculate how big a loan you can afford, according to a demo provided to CNBC.
After scrolling through a few options on the bank’s mobile app or website, like the type of residence and the term of the loan, a pre-approval letter takes just a few clicks to generate. That could give prospective buyers an edge when home shopping.
The product takes innovations in online shopping to the world of mortgages, Ghamsari said.
“It’d be weird if I went to Amazon and I had to apply to see a list of products that I could afford,” he said. “This is bringing paradigms from other industries into this industry. There’s no form to fill out, we’re bringing all the pieces needed to get it to work for mortgages, which was extremely complicated and a ton of work to do.”
Blend, which has 130 banks and credit unions as clients including giants like Wells Fargo, was founded in 2012 and is backed by investors including Andreessen Horowitz and Greylock Partners.