Figure says mortgage processing takes 9 days versus 45, with blockchain helping cut costs

Figure says its integrated lending software and blockchain-based marketplace are reducing mortgage processing times and costs, while a network of about 500 partners supports growth and profitability.

Connecting loan origination with a marketplace for investors can reduce the administrative work involved in approving and selling mortgages, according to the company. Blockchain records also help investors verify loan information and reduce review costs.

In a November 4 interview with Anthony Pompliano, Figure CEO Michael Tannenbaum said mortgages processed through its platform take an average of 9 days, compared with a typical 45 days. Origination costs are about $1,000, against an industry average of $12,000, he said, attributing the difference to the integration of software and capital markets.

Tannenbaum clarified that Figure provides the infrastructure for a marketplace whose partners collectively originate the most home equity lines of credit in the country. These credit lines allow homeowners to borrow against the equity in their homes.

Higher home prices and interest rates have supported demand for home equity borrowing, he said. Homeowners with low-rate mortgages are reluctant to move or refinance, but can use their increased equity to consolidate other debts. Expensive origination procedures add to the affordability pressures created by higher prices and borrowing costs.

Tannenbaum said Figure shortens processing by establishing where loans will be sold through its marketplace, reducing negotiations between originators and buyers. Models assess borrowers using bank-account and cash-flow information and estimate property values, reducing reliance on human underwriters and traditional appraisals. The 9-day average includes a government-mandated 3-day waiting period, with processing possible in as few as 5 days, he said.

Blockchain supports investor verification and fraud prevention, according to Tannenbaum. Recording loan attributes such as credit scores and income on-chain has cut third-party due diligence review costs by 80%, he said. Tracking loans throughout their lives also helps prevent the same loan from being pledged as collateral or sold more than once.

Tannenbaum attributed Figure's growth and margins to its partner-led business model. About 500 partners fund marketing and hire sales teams, while Figure supplies origination software and access to capital markets. He said Figure does not use its own balance sheet to lend to end customers, reducing the capital and customer-acquisition spending it needs.

Partners also bring established distribution channels. Tannenbaum cited home improvement stores offering home equity products and regional banks drawing on their branches and brands. Those relationships allow Figure to reach different customer groups while supporting both growth and margins, he said.

Tannenbaum also said the ability to liquidate Bitcoin and Ethereum collateral quickly helps limit losses on crypto-backed loans, adding that Figure had never lost money on that product. He described bringing similar efficiency to mortgages and other asset classes as the broader aim of its on-chain lending approach.