This start-up is bringing fast home equity loans to your smartphone


Thanks to rising home values, Americans are sitting on a record $6 trillion that can be tapped through home equity loans or cash-out refinances, according to data provider Black Knight. Banks may focus on that segment while the purchase mortgage market slows because of rising interest rates and diminished affordability.

Blend is the latest example of a tech start-up that works with banks, rather than competing against them, to bring easier-to-use digital services to the financial industry. The traditional mortgage industry is also competing with online offerings like Quicken Loans’ Rocket Mortgage, which has helped that lender gain market share.

The home equity loan or line of credit application takes about 20 minutes via a bank’s mobile phone app or website, according to Blend, and documents that need to be signed are sent digitally. The company gets a fee for every loan that is successfully closed through its software.

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. It was valued at about $500 million in 2017, according to the Wall Street Journal.

Lynn Heitman, an executive vice president at U.S. Bank, said they partnered with Blend to “simplify and streamline the banking experience for our customers to help them achieve their goals,” from home renovations to debt consolidation, she said.

The industry isn’t done fixing the loan process, according to Ghamsari. The goal for Blend is to simplify the application into a “one-tap” approval process, reminiscent of the “one-click” purchasing tool that Amazon pioneered in the world of e-commerce.

“The process of being approved for these loans and lines will be one-tap within the next five years,” he said. “And the ability to check out will be as simple as, here’s your remaining items we couldn’t do automatically. Those things will be embedded in a one-stop shop for the consumer. Those things are coming.”

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