Paperless closing provider Stavvy has landed $40 million in Series A funding from Morningside Technology Ventures, which the company says will allow it to bring its expertise to bear in helping mortgage lenders serve troubled borrowers.
The Boston-based startup also announced a deal to provide remote loan modification services to Flagstar Bank — a major expansion of the company’s customer base in mortgage loan servicing. Flagstar, a top 20 mortgage lender that does business nationwide, last month announced a $2.6 billion merger with New York Community Bancorp Inc.
Stavvy is one of fewer than a dozen companies certified to conduct remote online notarizations by the Mortgage Industry Standards Maintenance Organization (MISMO). Its competitors include MISMO-certified companies Black Knight, eNotaryLog, Hercules Holding, Nexsys, Notarize, NotaryCam, Pavaso, Signix and Snapdocs.
By bringing e-signatures and video conferencing to loan servicing, Stavvy says it can help mortgage lenders work with troubled borrowers to streamline the provision of loan modifications, deferrals and forbearance agreements.
“This funding round bolsters our ability to expand our operations and grow our team with top talent who share in our passion and mission to transform how banking and financial transactions are conducted,” said Stavvy cofounder Kosta Ligris in a statement. “Our alliance with Flagstar is a major step toward bringing real estate lending and servicing into the 21st century and has enabled us to assist consumers on a national scale. This is only the beginning of a very exciting journey to transform banking and lending.”
The company said the funding paves the way for it to hire “several key new team members,” including Chief Strategy Officer Shane Hartzler, formerly the director for eMortgage strategy and operations at Fannie Mae.
Although the share of mortgages in forbearance continues to dwindle, an estimated 2.1 million homeowners who were granted permission to stop making their monthly mortgage payments during the pandemic still haven’t resumed them.
Many borrowers will time out of the 18-month COVID forbearance program at the end of September, but many will be eligible to enter into a repayment plan, apply for a loan modification, or defer repayment until they refinance or sell their home. Homeowners and renters can learn more about their options on the Consumer Financial Protection Bureau’s website.
“We are confident in Stavvy’s ability to change the lending and banking experience for both institutions and consumers,” said Gerald Chan of Morningside Technology Ventures “We are especially proud to support the company’s efforts to enable COVID loan relief during these unprecedented times.”
Morningside’s prop tech investments include Bode, which identifies commercially-zoned multifamily properties and converts them into hotels; F-Wave, which manufactures synthetic roofing shingles; HqO, a provider of software and services for commercial real estate firms; Iris VR, virtual reality design tools for teams; and Second Home, a provider of creative workspaces and cultural venues.
Morningside also has stakes in CrestMarc, which refurbishes multi-family apartment complexes, and Monument Bank, a digital-first U.K. bank serving the “mass-affluent.”