An expensive problem
Lenders will write $1.5T of home mortgages in 2017, and will have to evaluate every single borrower's ability to repay. This is expected to cost the industry $15B in human labor. We talked to these humans, and learned that they spend 1/3 of their time just asking other humans for documents and data that are almost universally available online. While the market is still making the transition to transactional data, Lendsnap is the only company bridging the present with the future by delivering original electronic documents and datasets. That means portfolios of our lender customers stay completely liquid in the secondary market. No one else can offer that today.
How we solve it
Lendsnap solves the financial data access problem for lenders and consumers. Our secure web app links to consumer accounts to gather pay stubs, W2-s, tax returns, and bank statements. We started in mortgage, which TechCrunch calls “the holy grail of lending”. We power mortgage lending with all the documents and data needed to qualify borrowers. Through our web app and public API, we support traditional and online origination workflows to help lenders transition to electronic mortgage origination on their terms. We meet the market where they are today.
How the future looks
We are positioned to address a $4B market that is evolving rapidly right now. Mortgage underwriting rules are set in large part by FNMA and FMAC, the government sponsored entities (GSE’s) that keep mortgage markets liquid. The pivotal sea of change happening right now is the transition from original electronic documents to transactional data sets. While the market is still figuring out how to access and use this new data, Lendsnap bridges the present with the future by delivering original electronic documents and datasets. Our competitors deliver data only but not the original electronic documents.
“Lendsnap has improved our signed application conversion almost overnight because of its speed and ease of use. Once clients send us the documents and we can deliver a full pre-approval, they are more likely to stay with us and use us to satisfy their mortgage needs.”
-Jared, Access Mortgage Partners
“Lendsnap has been a great tool. As a small broker shop, it was challenging to find a resource to obtain complete borrower documentation securely. Lendsnap provides a secure, convenient, and most importantly, a straightforward, simple interface for consumers to provide sensitive information quickly. With my branding incorporated, Lendsnap becomes an extension of my company. Thanks for everything.”
-Jeff, Homebuyers Mortgage
Lendsnap instantly gathers the original borrower documents and data for lenders by linking to consumer financial accounts. We increase loan origination team productivity by 25%+ and save applicants several hours on each application as well.
Our intuitive and easy-to-use workflow makes it easy and safe for borrowers to submit and for loan officers to receive the necessary documents for lenders to make a credit decision. With quicker access to original source documents, lenders are able to provide faster service with less risk to their portfolios and the secondary market.
Our lender clients pay us to increase their throughput, enabling them to increase top line revenue by closing more loans. We charge $15/applicant/month on new business. Existing business is priced at $100/loan officer/month.
Launched in July 2016. Now processing 150+ applications per month at ten companies, customer testimonials. API documentation is available, integration to Ellie Mae Encompass complete.
As the only company delivering the right documents and data to originate non-agency loans such as VA, FHA, and subprime, we are able to work with all types of lenders. This market segment consistently represents 5-10% of total loan originations each year and is projected to grow in the near term due to rising rates. Furthermore, we are uniquely suited to serve mortgage brokers (12% market share) who have to remain flexible to the credit needs of their diverse borrowers. We are the only post-launch company that delivers actual electronic statements straight from source institutions, such as Bank of America, TurboTax, Chase, and hundreds more.
- Lendsnap Overview Tour -Our world class borrower experience designed by a Series C funded UX Director
- How to link your accounts using Lendsnap- Account linking to gather original documents -where the magic happens!
- What do the different colors mean? -How our UI guides the customer to next steps
- How to upload a document on Lendsnap -Consumers can upload documents as well as link financial and employment accounts.
- Document options - view/replace/delete/move -How consumers manage documents in Lendsnap
Mike heard about Orion building Lendsnap to transform mortgage in October 2015 through a Berkeley Haas newsletter. As a loan officer manager with 14 years of experience, Mike could see that Lendsnap is building the future of lending and wanted to help drive this change. After sharing our visions for how significant the service could be, and lining up on go-to-market strategy, we got to work in November 2015. Orion knew Mike was the perfect partner because of his experience building origination teams and delivering mortgage software solutions at big four consulting firms. As a duo, they are unstoppable!
Mortgage lenders investing $50K or more receive additional usage credits worth 20% of their investment.
It is advised that you consult a tax professional to fully understand any potential tax implications of receiving investor perks before making an investment.
Frequently Asked Questions
A Side by Side offering refers to a deal that is raising capital under two offering types. This Side by Side offering is raising under Regulation CF and Rule 506(c) of Regulation D.
The Form C is a document the company must file with the Securities and Exchange Commission (“SEC”) which includes basic information about the company and its offering and is a condition to making a Reg CF offering available to investors. It is important to note that the SEC does not review the Form C, and therefore is not recommending and/or approving any of the securities being offered.
Before making any investment decision, it is highly recommended that prospective investors review the Form C filed with the SEC (included in the company's profile) before making any investment decision.
Rule 506(c) under Regulation D is a type of offering with no limits on how much a company may raise. The company may generally solicit their offering, but the company must verify each investor’s status as an accredited investor prior to closing and accepting funds. To learn more about Rule 506(c) under Regulation D and other offering types check out our blog and academy.
Title III of the JOBS Act outlines Reg CF, a type of offering allowing private companies to raise up to $1 million from all Americans. Prior capital raising options limited private companies to raising money only from accredited investors, historically the wealthiest ~2% of Americans. Like a Kickstarter campaign, Reg CF allows companies to raise funds online from their early adopters and the crowd. However, instead of providing investors a reward such as a t-shirt or a card, investors receive shares, typically equity, in the startups they back. To learn more about Reg CF and other offering types check out our blog and academy.
When you complete your investment on SeedInvest, your money will be transferred to an escrow account where an independent escrow agent will watch over your investment until it is accepted by Lendsnap. Once Lendsnap accepts your investment, and certain regulatory procedures are completed, your money will be transferred from the escrow account to Lendsnap in exchange for your shares. At that point, you will be a proud owner in Lendsnap.
To make an investment, you will need the following information readily available:
- Personal information such as your current address and phone number
- Employment and employer information
- Net worth and income information
- Social Security Number or government-issued identification
- ABA bank routing number and checking account number (typically found on a personal check or bank statement)
If you are investing under Rule 506(c) of Regulation D, your status as an Accredited Investor will also need to be verified and you will be asked to provide documentation supporting your income, net worth, revenue, or net assets or a letter from a qualified advisor such as a Registered Investment Advisor, Registered Broker Dealer, Lawyer, or CPA.
An investor is limited in the amount that he or she may invest in a Reg CF offering during any 12-month period:
- If either the annual income or the net worth of the investor is less than $100,000, the investor is limited to the greater of $2,000 or 5% of the lesser of his or her annual income or net worth.
- If the annual income and net worth of the investor are both greater than $100,000, the investor is limited to 10% of the lesser of his or her annual income or net worth, to a maximum of $100,000.
Separately, Lendsnap has set a minimum investment amount of US $0.
Accredited investors investing $20,000 or over do not have investment limits.
You are a partial owner of the company, you do own shares after all! But more importantly, companies which have raised money via Regulation CF must file information with the SEC and post it on their websites on an annual basis. Receiving regular company updates is important to keep shareholders educated and informed about the progress of the company and their investment. This annual report includes information similar to a company’s initial Reg CF filing and key information that a company will want to share with its investors to foster a dynamic and healthy relationship.
In certain circumstances a company may terminate its ongoing reporting requirement if:
- The company becomes a fully-reporting registrant with the SEC
- The company has filed at least one annual report, but has no more than 300 shareholders of record
- The company has filed at least three annual reports, and has no more than $10 million in assets
- The company or another party purchases or repurchases all the securities sold in reliance on Section 4(a)(6)
- The company ceases to do business
However, regardless of whether a company has terminated its ongoing reporting requirement per SEC rules, SeedInvest works with all companies on its platform to ensure that investors are provided quarterly updates. These quarterly reports will include information such as: (i) quarterly net sales, (ii) quarterly change in cash and cash on hand, (iii) material updates on the business, (iv) fundraising updates (any plans for next round, current round status, etc.), and (v) any notable press and news.
Currently there is no market or liquidity for these shares. Right now Lendsnap does not plan to list these shares on a national exchange or another secondary market. At some point Lendsnap may choose to do so, but until then you should plan to hold your investment for a significant period of time before a “liquidation event” occurs. A “liquidation event” is when Lendsnap either lists their shares on an exchange, is acquired, or goes bankrupt.
You can return to SeedInvest at any time to view your portfolio of investments and obtain a summary statement. If invested under Regulation CF you may also receive periodic updates from the company about their business, in addition to monthly account statements.
This is Lendsnap's fundraising profile page, where you can find information that may be helpful for you to make an investment decision in their company. The information on this page includes the company overview, team bios, and the risks and disclosures related to this investment opportunity. If the company runs a side by side offering that includes an offering under Regulation CF, you may also find a copy of the Lendsnap's Form C. The Form C includes important details about Lendsnap's fundraise that you should review before investing.
For offerings made under Regulation CF, you may cancel your investment at any time up to 48 hours before a closing occurs or an earlier date set by the company. You will be sent a reminder notification approximately five days before the closing or set date giving you an opportunity to cancel your investment if you had not already done so. Once a closing occurs, and if you have not canceled your investment, you will receive an email notifying you that your shares have been issued. If you have already funded your investment, your funds will be promptly refunded to you upon cancellation. To cancel your investment, you may go to your portfolio page
If you invest under any other offering type, you may cancel your investment at any time, for any reason until a closing occurs. You will receive an email when the closing occurs and your shares have been issued. If you have already funded your investment and your funds are in escrow, your funds will be promptly refunded to you upon cancellation. To cancel your investment, please go to your portfolio page.