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FirstClose Inc., a fintech provider of data and workflow solutions for mortgage and home equity lenders nationwide, said Tuesday it has closed a $35 million investment from growth equity firm Lateral Investment Management to accelerate its product and growth strategies.
FirstClose provides underwriting workflow automation technology, point-of-sale software, and data services for the U.S. home equity and mortgage markets. The company said it will use the investment to expand its growing financial services footprint to leverage property data intelligence and technology to enable lenders to compete for and close consumer loans.
“FirstClose is excited to announce this next step in our company’s journey,” said Tedd Smith, co-founder and CEO of FirstClose. “Our mission has always been to improve the way that banks and credit unions serve consumers by accelerating loan closing times, increasing loan volumes, and reducing costs.”
Smith added that, “This year, as interest rates continue to rise and home equity lending volumes skyrocket, this funding will allow us to continue innovating faster and provide a superior customer experience, while delivering end-to-end solutions that are in high demand in today's constantly changing lending environment.”
Soaring home prices have made home equity lending products a clear option for lenders looking to diversify their portfolios while creating new revenue streams. The increase in mortgage rates since the beginning of the year has caused the additional demand for home equity lines of credit (HELOCs) and other home equity lending products to increase significantly. The company said the new funding for FirstClose is the first institutional equity investment round in the company, which has been self-funded since it was founded in 2000.
“Lateral is excited to partner with the FirstClose team as they accelerate growth,” said Stuart Barden, managing director at Lateral Investment Management, a San Mateo, Calif.-based growth equity investment firm. “We believe that FirstClose has a critical role to play in streamlining the origination, underwriting and closing processes in the $200 billion consumer home loan market.”
Based in Austin, Texas, FirstClose provides solutions that reduce the time to close HELOCs and mortgages for more than 400 banks and credit union customers. The company said lenders using the FirstClose EquityIQ solution have experienced a 35% increase in online applications, a 25% increase in pull through, and a 77% reduction in time to close from application to funding.
The company has strategic partnerships with MeridianLink and other LOS companies to embed its workflow automation and data solutions into their platforms.
Lateral Investment Management is a private investment firm focused on partnering with lower middle-market companies facing transformational growth. It provides “first institutional” growth capital ranging from $5 million to $50 million, along with value-added assistance to established businesses that can be leaders in fundamental sectors such as manufacturing, business services and infrastructure that are at the intersection of technology and disruptive change, the company said.