A formidable new competitor, SoFi Technologies, is expanding its mortgage business, which may end up giving other mortgage fintechs a run for their money. Today, the company announced its acquisition of fintech mortgage lender Wyndham Capital Mortgage intended to broaden its suite of mortgage products.
SOFI is a one-stop shop for digital financial services that offers consumers mortgage financing, student loans and refinances, auto loan refinance, personal loans, depository banking, online stock trading, insurance coverage, and more.
Previously, SOFI offered a few mortgage products including cash-out refinances, conventional loans, jumbo loans, and home equity loans. It has yet to announce which products will be added as a result of this acquisition.
As of right now, other mortgage fintech lenders don’t need to sweat. According to SoFi’s fourth quarter results, the lending side of the business does not perform as well as the financial services side. The most popular of the lending products are personal loans, rather than mortgages or auto loans.
Personal loan originations in the fourth quarter grew 50% year-over-year to $2.5 billion, while student loan originations were down 72% and home loan originations were down 84%, the fourth quarter report stated.
Although Rocket Companies and SOFI Technologies have their differences, it’s inevitable that comparisons will be made as SOFI delves more into the mortgage industry. In an interview last November, Rocket CEO Jay Farner said Rocket is also aiming to become a one-stop shop for consumers to digitally manage their finances.
“Every experience is separate and so it's hard for clients to connect all of those experiences to manage their finances,” said Farner. “And so there's a huge opportunity to place all of this on one platform.”
SOFI also offers its own credit card and SOFI Rewards, not unlike Rocket’s new visa card and Rocket Rewards program. January’s issue of NMP Magazine, “Farner, Fintech And The Future,” provides quotes from analysts explaining the similarities between SOFI and Rocket, including predictions about which company is more likely to succeed.
Neither Rocket or SOFI responded to a request for comment regarding similarities between the two companies.
“At SoFi, we’re on a mission to help people get their money right and purchasing a home is often one of, if not the, biggest financial decision individuals make in their lives,” said SoFi Technologies CEO Anthony Noto. “Several macro- and socioeconomic factors – high inflation and rising mortgage rates, the new world of work, and others – have ushered in a new era across the U.S. real estate market. These changing conditions mean it's more important than ever that borrowers have a trusted partner they can look to as they go through the process of obtaining a mortgage for a home. Today’s acquisition of Wyndham Capital will not only allow us to scale and keep pace with accelerated growth, but also allow us to foster that growth in a way that brings value to our members through sales and operational efficiencies and helps members get their money right when it comes to one of life’s most significant financial milestones.”
SoFi plans to integrate talent and technology from Wyndham Capital to add strength and efficiency to the home loans segment of the company’s Financial Services Productivity Loop (FSPL) strategy. Wyndham Capital has helped more than 100,000 borrowers – with a 98 percent satisfaction rating – since it launched more than two decades ago. But perhaps most importantly, SoFi is a fan of Wyndham Capital’s innovation-first approach which enabled it to deliver a fully digital experience for borrowers.
