Flagstar Bank in Troy, Michigan, is now accepting applications for the third class in its MortgageTech Accelerator program.
Fintechs in all aspects of the mortgage business, including origination, processing, marketing, servicing, compliance, sales, underwriting, credit and quality assessment, are eligible to participate. Selection criteria include a company's progress and prospect for growth.
In the first class from 2019, the winners were Home Captain, Brace and Boost.ai. Companies selected in the 2020 second accelerator included Home Lending Pal, RealKey and Stavvy.
"We're excited to partner with industry innovators and provide guidance along the way," Lee Smith, Flagstar's executive vice president and president of mortgage, said in a press release. "This program allows Flagstar to influence and be at the forefront of technological advances in the mortgage market while also providing startups real-world experience and potential investment at an early stage of their growth cycle."
The pandemic is driving many innovations in mortgage technology, which makes this a good time for the latest accelerator, Flagstar added. A March 2021 report from Keefe, Bruyette & Woods stated investor support for proptech growth had reached a record high. But at the same time, a disconnect exists between mortgage lenders' desire to adopt streamlining technology and actually implementing it.
Several conditions created by the pandemic meant additional time was needed before launching this accelerator round. The shift to remote work, implementing the CARES Act and the low mortgage rates, which have led to record loan production, the bank said in a statement.
Those selected for the latest program will receive access to senior mentors with deep industry experience; a bespoke program based on current and immediate needs; the ability to test products and/or solutions in a real-world controlled environment; and access to a wide network of potential customers. The application deadline is Feb. 18.
A pair of companies from the initial grouping were able to grow their business prospects after the program.
After its participation in the accelerator, Home Captain acquired Redefy in March 2020. In June 2021, Volly, headed up by longtime mortgage industry executive Jerry Halbrook, purchased Home Captain.
A year ago, Brace picked up $15.7 million in Series B funding. "The partnership with Flagstar enabled us to learn a tremendous amount about how a large mortgage servicer actually works on complex issues at scale," Brace CEO Eric Rachmel said in the latest Flagstar press release. "This helped us further iterate what we had already developed and improve the experience for both the consumer and the enterprise."
Flagstar is in the process of being acquired by New York Community Bank, and the accelerator program will continue after the deal is completed, the bank's statement said.
