“Figure Connect coming in at 65% when we only launched that platform two years ago reflects that the market is really interested in what we’re offering there,” he said. “There’s a lot of pull into that marketplace.”
The Kiavi deal adds the business purpose lending market, where roughly 25% of US housing stock is investor-owned, and Kiavi holds approximately 10% market share while the next largest competitor sits at around 2%, according to Tannenbaum.
The combination of Figure and Kiavi opens new doors for both companies. Figure’s home equity product is capped at around 85% loan-to-value, while Kiavi’s technology allows loans to go above 100% of the current home price based on a post-renovation valuation, creating a valuable product for home improvement borrowers.
“Forty percent of home equity is home improvement,” he said. “Think about how many people would be interested in borrowing against the pro forma — borrowing 100% of today’s value or more for renovation. Kiavi is not doing the HELOC, but we have the HELOC technology, and we can add their post-renovation valuation. That’s a really valuable connection point.”
What brokers need to know
Tannenbaum said the $35 trillion in available home equity, a Federal Reserve figure tracked quarterly, is where the action is for mortgage partners right now, and brokers without a home equity strategy are leaving business on the table.
