Blend wants to speed up getting home equity loans, credit lines

The San Francisco-based startup unveiled new digital HELOC and HELOAN products for banks and lenders, aiming to reduce the time it takes for consumers to squeeze their properties for cash

Blend, a well-funded, San Francisco-based startup that makes consumer-facing mortgage application software for use by banks and lenders, is expanding its product offerings in an effort to speed up the ability for consumers to tap into their home equity for cash.

On Tuesday, the company formally unveiled its new, all-digital HELOC (home equity line-of-credit) and HELOAN (home equity loan) products, which Blend’s lender and bank customers can take and offer directly to consumers for free on their mobile phones.

Similar to its approach to mortgages, consumers will be able to use Blend’s new online software to apply for home equity loans from these financial institutions, using personal iPhone or Android devices without the stack of paper documents and forms that typically accompanies such loan applications.

Blend says this paperless approach, coupled with its own design efficiencies, create a “frictionless” application experience that can be completed in just minutes by consumers who are trying to tap their home equity.

These products are already in use “at more than 20 top financial institutions, including U.S. Bank and Mountain America Credit Union,” according to Blend, and some of its customers have managed to cut in half the time it takes to issue their loans, shortening cycle time by up to 19 days.

“At this moment when Americans have built a record amount of equity in their homes, offering a frictionless way for them to take advantage of that equity to achieve their goals is paramount,” said Blend CEO and founder Nima Ghamsari, in a prepared statement.

Blend white-labels its software, meaning its bank and lender customers can brand it using their own logos and present it to consumers as though it came from them.

Blend did not immediately provide a price for what it charges these financial institutions for use of its software. Still, at least one of its customers seems happy with the results.

“The U.S. home equity market is ripe with opportunity as American homeowners have a large amount of equity to tap and we’re excited to work with Blend as they expand their business to provide home equity customers with an intuitive, fast and modern digital lending experience,” said Lynn Heitman, executive vice president of consumer banking product strategy and support at U.S. Bank.

The company expects that, with the recent spike in property values, more homeowners will want to tap into their equity. The company argued, using Black Knight data, that Americans are currently sitting on more than $6 trillion in home capital that they could put toward other purchases or investments.

Founded by former software engineers at Palantir in 2012, Blend, a portmanteau for “Better Lending,” has raised over $100 million in funding from venture capitalists. Last month, former Fannie Mae chief exec Tim Mayopoulos joined Blend as its new president amid promises to oversee the company during its rapid growth.

Email Veronika Bondarenko