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Blockchain firm Figure merges with mortgage lender Homebridge

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Yesterday Figure Technologies announced an agreement to merge with Homebridge Financial Services, which originated $25 billion in mortgage loans last year and has 150,000 customers.

At first sight, merging a high-tech blockchain platform and a firm with human beings doing mortgage origination seemed a little counterintuitive. One explanation is those 180 Homebridge physical branches and a bigger balance sheet are a considerable benefit in Figures’ banking license application. 

Figure has applied for a national banking charter with opposition from the American Bankers Association because it doesn’t have any FDIC-insured deposits. The OCC, which charters banks, has a new interim head who is taking a more conservative stance than his predecessor.

One argument is that these 150,000 customers are potential users of Figure Pay. However, that solution was originally targeted at the underbanked, who are less likely to have mortgages. Nonetheless, those customers could be sold other lending products and $25 billion will quickly ramp up the processing on Figures’ Provenance blockchain.

Figure CEO Mike Cagney confirmed that saying the merger brings “150,000 customers who we can introduce to new payment and lending products.” He continued, “We’re going to deliver to this all-star loan origination team at Homebridge a tech platform on Provenance Blockchain that is going to double their capacity for fulfilling loans.”

In terms of headcount, Homebridge has 2,500 associates across 180 branches. It also has two wholesale divisions. 

Another statistic announced is that the Provenance blockchain has processed $5 billion in loans since its launch. Or more specifically, the $5 billion total is for “originated, serviced, financed and traded” loans.

Figure announced a $200 million Series D funding round at a $3.2 billion valuation in May. Last week it said it finalized the round and also added Apollo as an investor. The alternative asset manager plans to collaborate with Figure to use its Provenance blockchain for fund distribution.