Why Maxwell’s mortgage solution faces fierce competition


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  • Maxwell Processor Edge is a newly launched web application designed for loan processors to integrate with lender’s loan origination systems.
  • In the housing boom in the United States, small and medium-sized lenders trying to preserve low profits are an opportunity for AI and machine learning solutions.
  • Insider Intelligence publishes hundreds of information, charts and forecasts on the Fintech industry. Learn more about how to become a customer.

The News: Maxwell Financial Labs and its subsidiary Maxwell Lender Solutions, a US-based fintech mortgage solutions platform founded in 2015, have launched what they claim to be a ‘first of its kind’ product platform. Maxwell Processor Edge, targeting small to mid-size lenders.

eMarketer do us community banks offer digital loan applications from respondents July 2020 259465


eMarketer


What does it do? The web application is tailor-made for loan processors and integrates with lender loan origination systems. It uses machine learning and AI to speed up the document review process and detect data discrepancies before underwriting.

Loan closing times in the United States average around 52 days, according to the Ellie Mae Origination Insight report. Maxwell says its solutions help loan officers close 15% more loans each month while shortening the process to over 13 days.

Maxwell CEO John Paasonen said Maxwell’s revenue grew 250% in the past year. The company says it serves more than 300 lenders nationwide and has facilitated more than $ 150 billion in loan volume to date.

In the past year and a half, Maxwell has raised $ 73.8 million from its backers, including Wells Fargo Strategic Capital, according to Bloomberg, which pegged the company’s valuation in October at $ 450 million.

What is the opportunity? The United States has recorded the highest number of home sales since 2006 last year. Faced with record demand for mortgage services, along with social distancing requirements that made face-to-face meetings more difficult, traditional lenders have moved from manual paper-based processes to automated digital solutions. As loan spending hit an all-time high in 2021, lenders were looking for greater efficiency and speed of processing.

Small community lenders make up 60.7% of the US $ 4 trillion mortgage industry, but they compete with incumbent banks,


neobanks

, and megalondres like Quicken Loans and LoanDepot.

Net income per loan is down nearly 63% from its high in Q3 2020, while cost per loan has swelled by more than 15%.

Further market compression and rising lending costs mean profit margins will be even more difficult to maintain in 2022 as interest rates rise and mortgage volumes shift to buying.

The big picture: To win in the crowded home loan solutions market, Maxwell will need strong partnerships and additional financing to drive innovation.

Its biggest competitor, Blend, says it processes on average more than $ 5 billion in loans per day. Blend reached a valuation of $ 3.3 billion in April.

Other competing solutions and services include Lending DocAI, backed by Google Cloud, Black Knight’s Underwriter Assist, Roostify, and Ocrolus (which recently partnered with Blend).

Two of America’s largest lenders, UWM and Rocket Mortgage, have made their in-house mortgage origination technology available to their partners.

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