The tech industry over the past four decades has created a huge variety of startups. The biggest of these become juggernauts like the FAANG (Facebook, Amazon, Apple, Netflix, Google) companies, but on a smaller scale, there are plenty of startups that have come to lead the market in a variety of industries. One of these startups is Rocket Mortgage.
Launched by Quicken Loans in 2016, Rocket Mortgage provided more home loans in 2019 than any other company in the world. It is not a traditional startup– instead of relying on venture capital or government funding, Rocket Mortgage instead has access to the resources of what is now the largest mortgage lender in America, even while being a new and separate company with a different staff and mission. Quicken Loans has always tried to be ahead of the curve: even before they founded Rocket Mortgage, they had no physical branches, unlike every other major mortgage company, instead processing all loans either over the phone or online. In addition, instead of taking deposits like other companies, Quicken relies entirely on wholesale funding to pay for its loans, leading to funding that is easier to obtain but with greater risk.
Rocket Mortgage was an attempt to streamline their online application process. The startup provides mortgage loans online in a process that takes only eight minutes. Though the company is only a few years old, Quicken has replaced their own online process with Rocket– go to Quicken Loans’s website and they will refer Rocket Mortgage for online loans. On the RM website you can either refinance current mortgages or take out new loans. They offer many types of mortgage: from standard mortgages to balloon, adjustable rate, and jumbo mortgages over a variety of time frames, they offer as much selection as more traditional lenders.
To conclude, an established lender, Quicken Loans, was able to use a company-owned mortgage tech startup in order to facilitate the online mortgage process, and in this way move to the top of the US mortgage market. It is a textbook example of how even for already existing companies, the startup environment is able to drive innovation to get ahead of competitors and grow the company. Mortgagetech is not just new companies at all, and even some of the largest and oldest players in the market are successfully using it to increase market share and make the mortgage process more efficient.