The mortgage origination process is complex, especially if you’re a first-time homeowner. Getting the best rate possible often comes down to the experience of your loan officer and algorithms. Unfortunately, those automated processes often are biased against minorities.
In fact, a University of California-Berkeley 2018 study found that lenders tend to give higher interest rates to African American and Latino borrowers, making them pay a total of up to half a billion dollars more in interest than counterparts of other races with similar credit scores.
So, what if you could anonymously shop for a mortgage, and then find the right loan officer that matches your situation?
“Most of the online tools out there are very focused on lead generation or capturing phone numbers and email addresses as quickly as possible to then sell that information to banks,” says Eric Mager. “You can see rates from companies, but you’re not really interacting with a person either.”
Mager has been in the financial and mortgage space for over a decade, holding positions at Bank of America, Citi, and HSBC. He’s seen the anxiety homeowners experience when securing their first home loans.
He founded loan officer marketplace Bundle to flip the lender model on its head, moving the burden from the customer to the loan officer.
Rather than selling customer data to make money, Bundle charges a platform fee to the mortgage brokers.
“Because we are getting our revenue stream from a platform fee, the customer can anonymously message with different lenders and compare quotes while keeping their information safe. You just want somebody that you trust, that’s going to take care of you, and isn’t going to lose your documents seven times.”
Right now, a home buyer generally is connected with a loan officer by their realtor. But that doesn’t always lead to the best rate, and with all the anxiety within the home buying process, many home buyers don’t shop around to compare.
“We surveyed 550 home buyers and 94 percent of them believe they should shop around for a mortgage quote. But a lot of them don’t because of the time it takes to call three people and having that anxiety-driven conversation multiple times is a big turnoff,” says Mager.
“But you wouldn’t just go to one home and make a decision. You should shop around for your mortgage too.”
With Bundle’s marketplace, the home buyer can use the online budgeting tool to organize monthly expenses and decide on a home price target. Once they enter their loan target and down payment, they move on to the marketplace where they will receive real bids from loan officers.
At any point, they can access short educational videos on mortgage basics to ease anxiety and provide insight into the process.
The platform allows them to interact anonymously and message with several loan officers at once to discuss details on their personalized bids. Once they’re happy with a quote and loan officer, the home buyer can reach out directly when they’re ready.
Mager says that attending the Charlotte Realtor Expo was a turning point for Bundle. He saw “incredible traction from loan officers who were there to understand what the newer technologies are.”
As he gains further traction, he’s making sure to pay attention to both customer segments — loan officers and home buyers.
“It’s very important that you build each user group simultaneously, right? You can’t have 400 buyers home buyers on the marketplace, looking to get a mortgage, and there are zero lenders available,” says Mager.
He’s not trying to target those loan officers that always work with the same realtor, the “old boys network”, as he calls it, but loan officers that work with a variety of clients and want to reach more potential home buyers.
Bundle already has more than 50 loan officers on the platform and close to 40 realtors. He’s concentrating on his home market of Charlotte right now, with eyes for expansion to Atlanta in the near future.
The company has remained largely self-funded, but was recently accepted into the Queen City Fintech accelerator, which comes with a $40,000 investment.