A multichannel mortgage lender Down found a software company Clean labs transforming its sales technology into a fully integrated platform for applying for asset financing, aimed at reducing reliance on third-party vendors.
The stock-based deal was finalized in December, although financial details were not disclosed.
“It’s very difficult to build this technology from scratch,” said Dan Snyder, CEO and founder of Lower, in an interview about the deal. “Neat Labs is built for a retail environment, a complete loan origination system, and a full pricing engine, all in one.”
Lower plans to integrate Neat’s cloud-based, end-to-end hosting platform into its proprietary operating system, LowerOS, which is currently running as a commercial product.
The move reflects a broader trend among mortgage lenders seeking new technology solutions to reduce reliance on third-party vendors and lower loan origination costs in a highly competitive market.
The merger is expected to reduce loan origination costs by at least 20%, allow Lower to recoup its origination costs within the first year and reduce loan delivery times from less than 21 days to just 10 days, Snyder said.
While Lower will continue to use other vendors for niche products and programs, Snyder added that the company aims to process 90% of its loans through the platform by the end of 2025.
Snyder said the new platform, which is web-based and mobile-optimized, enables multiple users to work on the same loan at the same time. It aligns with the company’s three main goals: to accelerate speed, reduce costs and provide guidance to consumers and innovators.
Founded in 2015, Neat Labs has raised more than $50 million in seven funding rounds, with significant support from Forecast Labs again Left Lane Capitalin accordance with CrunchBase data.
Neat Labs originated more than $1 billion in loans before rising mortgage rates and increased market competition led the company to move away from its innovation and focus on its technology.
Neat Labs founder Steve Herschleb will join Lower as chief technology officer, along with five engineers from his team. Herschleb previously served as chief product officer at Maxwell.
“With LowerOS, borrowers can be approved much faster than today. It will make a home loan feel more like a car loan or a credit card,” Herschleb said in a statement.
Lower, founded in 2014, claims to be the 28th largest US mortgage lender and is backed by Accel Partners, Sophie, again Veritex ban. In December 2023, the company acquired a Texas-based lender Grive Mortgage and, last month, based in Denver Universal Lending announced that it became the division of Lower.
According to Snyder, Lower has doubled its volume by 2024 and is projected to grow 40% to 50% by 2025. The company’s main focus this year is same-store sales growth, with teams encouraged to outperform the market by 20%.
Although Snyder indicated that the acquisition is no longer important, he left the door open: “If there are good inventors who want to join a large company, we would be interested.” But we are not actively hunting for purchases like last year.”
From Monday, i National Mortgage Licensing System (NMLS) reported that Lower has 535 sponsored loan officers and 87 operating branch locations. Snyder added that the company has returned to profitability and maintains a strong cash position.
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