Figure adds four nonbanks to HELOC partnership program

Figure Technologies, the blockchain-focused fintech, has entered into partnerships with four independent mortgage bankers to provide a private-label home equity line of credit product as first-lien business declines.

The four companies are CMG Financial, CrossCountry Mortgage, Fairway Independent Mortgage and The Loan Store.

These agreements were announced nearly a month after Figure Technologies launched its own HELOC wholesale loan production platform.

"As a company committed to innovation in both platforms and products, we are honored to have a collaboration with Figure that enhances the advantages of homeownership," said Christopher George, CMG Financial president and CEO, in Figure's press release. "In addition to serving new customers, we aim to empower our existing customers with the ability to utilize their home equity for needs like renovations or investment-property down payments, while preserving existing low interest rates."

These are not the first partnerships of this type Figure has entered into, said Jackie Frommer, the company's head of lending, in an email. The wholesale channel, designed for midsized companies looking to have a direct relationship with Figure, is a separate line from the new private-label home equity offering; Figure also offers HELOCs on a direct-to-consumer basis.

In the partnership program, which is already live at these firms, the loans are originated in the participating lender's name, using the Figure technology, Frommer said.

That will be the case at The Loan Store, said Will Pendleton, its chief revenue officer, in an interview. The company, which recently closed on its purchase of the wholesale production business of Homepoint, announced in June it was rolling out HELOCs in 25 states and the District of Columbia, with additional jurisdictions to be added.

The Tucson, Arizona-based IMB is offering a stand-alone, fixed-rate credit line where the borrower can tap between $25,000 and $400,000 of their home's equity.

While Figure is its initial partner for these loans, The Loan Store is looking to work with other HELOC originators, especially as current homeowners elect to hold on to their current low interest rate first mortgage. "Figure's the first, and we are aggressively pursuing other options to create more of a best-execution model for our partners," Pendleton said.

Loan Store's management team has had a strong relationship with Figure dating back to their time at Homepoint, which both Pendleton and CEO Phil Shoemaker came from after the deal closed.

"As far as what it does from a convenience standpoint, it puts the broker in control," Pendleton said. "Their new platform that they just released actually enables the loan officer to drive a quick prequalification for their consumer in minutes."

The Loan Store is able to fund the loans within three days because of the Figure technology.

HELOCs are one of the first of what Pendleton termed "product differentiators" the company is looking to bring to the wholesale market. Even before the Homepoint deal was completed, The Loan Store, in partnership with iBuyer HomeLight, brought a "buy before you sell" product to its customers.

The technology also helps with the compensation paid to the broker because they do not need to hire a processor to assist with the applications, Pendleton pointed out. The broker can net the entire compensation, while the consumer can tap their equity very quickly.

Since entering the business, Figure has produced $6 billion of HELOCs. At one point, it had an agreement to merge with Homebridge Financial. That deal fell apart, and Homebridge agreed to sell its retail production channel to CMG.

In April, Figure did its first rated securitization of HELOCs, consisting of 3,568 loans with a total unpaid principal balance of $236.8 million. The pool is made up primarily of second liens it produced but also includes HELOCs from Homebridge, Movement Mortgage, Guaranteed Rate and others.