What’s Maxwell’s mortgage processing solution up against in the booming US market?

The news: Maxwell Financial Labs and its subsidiary Maxwell Lender Solutions—a US-based fintech mortgage solutions platform founded in 2015—launched what it claims is a “first of its kind” product platform, Maxwell Processor Edge, targeting small to midsized lenders.

What does it do? The web-based application is custom-designed for loan processors and integrates with lenders’ loan origination systems. It uses machine learning and AI to accelerate the document review process and detect data discrepancies before underwriting.

• US loan closing timelines have averaged about 52 days, according to the Ellie Mae Origination Insight Report. Maxwell claims its solutions help loan officers close 15% more loans each month while shortening the process by more than 13 days.
• Maxwell CEO John Paasonen said Maxwell’s revenues have grown 250% over the past year. The company says it serves more than 300 lenders nationwide and has facilitated more than $150 billion in loan volume to date.
• In the last year and a half, Maxwell has raised $73.8 million from its backers, including Wells Fargo Strategic Capital, per Bloomberg, which pegged the company’s valuation in October at $450 million.

What’s the opportunity? The US saw the most home sales since 2006 last year. Faced with record demand for mortgage services—as well as social distancing requirements that made in-person meetings more difficult—traditional lenders shifted from manual, paper-based processes to automated digital solutions. As loan expenses neared a record high in 2021, lenders sought greater processing efficiency and speed.

• Smaller community lenders represent 60.7% of the $4 trillion US mortgage industry—but they’re competing with incumbent banks, neobanks, and megalenders like Quicken Loans and loanDepot.
• Net income per loan has decreased nearly 63% since its high in Q3 2020, while the cost per loan has ballooned by more than 15%.
• Greater market compression and rising loan costs mean profit margins will be even harder to maintain in 2022 as interest rates increase and mortgage volumes shift toward purchases.

The bigger picture: To prevail in the crowded residential lending solutions market, Maxwell will need strong partnerships and additional funding to spur innovation.

• Its biggest competitor, Blend, says it processes on average more than $5 billion in loans daily. Blend reached a $3.3 billion valuation in April.
• Other competing solutions and services include the Google Cloud-backed Lending DocAI, Black Knight’s Underwriter Assist, Roostify, and Ocrolus (which recently partnered with Blend).
• Two of the biggest US lenders, UWM and Rocket Mortgage, have made their in-house mortgage origination technology available to partners.