Figure's new marketplace connects buyers, sellers of private credit loans

Figure Technology Solutions, a parent company of Figure Lending, has rolled out a blockchain-based multi-seller, multi-buyer marketplace for private credit loans, it announced Wednesday. 

This is the first step in building out a "to be announced" (TBA) security market by the end of 2024 for non-GSE credit, a separate press release published by Mike Cagney, the founder of Figure, said. It could widen the company's reach from HELOC offerings to all types of loan products.

The newly announced marketplace, dubbed Figure Connect, gives lenders "control over their business with committed liquidity, transparency and informed loan pricing management," the company claims. This thereby gives certainty of funding to loan originators and collateral composition to loan buyers.

Originators using the platform, which has been "years in the making," can receive forward commitments from buyers, lock active bids, control loan pricing to balance profitability and volume, and deliver pools of loans into those commitments. Figure also claims that Connect can reduce lengthy months-long settlement processes into days.

"Figure Connect displaces legacy lending infrastructure and processes, without the burden of multiple intermediary parties at the end user's expense, and lays the foundation for a permanently liquid marketplace," added Cagney.

Lenders including The Loan Store, Movement Mortgage, Bayview Asset Management and Saluda Grade are already using the marketplace. Connect is now available to other participants in Figure's lending ecosystem.

"We are thrilled to be one of the first partners to have access to this pioneering marketplace, which we expect will ensure liquidity, optimize pricing, and provide unrivaled transparency, significantly benefiting our business," said Phil Shoemaker, CEO of The Loan Store, in a press release.

Figure's founder, in his separate address, added Connect will help the company widen its scope moving from only focusing on HELOCs to "all lending markets." 

"The Figure LOS that our partners use today not only originates HELOCs, it is designed to to originate everything from auto to first lien mortgage loans using the same automated processes," he added in his written address. "We believe Figure Connect benefits from economies of scale and diversification of credit, while lenders capture a much lower origination cost coupled with certainty in takeout. This combination makes every market - including conforming loans - open to change."