Online lender moving into Northwest

A California startup aiming to drastically cut the costs of home refinancing has branched out to Washington and Oregon with an online lending service that it hopes will be the cutting edge of a transformation of the highly regulated home lending industry.

Lenda, www.lenda.com, which opened for business in October 2013, has closed on $25 million in refinancing loans in California. It has secured $1.8 million in seed funding to expand into new markets. Silicon Valley entrepreneur Jason van den Brand, founder and CEO of the San Francisco-based company, said in an interview with The Columbian that he chose the Northwest states in part because people here tend to be early adopters of new technologies.

While most consumers spend thousands on underwriting and processing fees, “we built software to automate all those processes,” van den Brand said. “We’re working with consumers who demand a better, faster experience.” It says its system cuts out layers of fees. The company’s example on its website outlines $800 in fees and transaction costs on refinancing a $300,000 loan, compared to $8,000 in fees and costs through a conventional lender.

Van den Brand, who has been in the mortgage industry for 11 years, said his company is legally a lender, and it sells its loans to loan processors following the transactions. The company hires an appraiser as part of its loan process, although he sees ways in the future to partially automate that part of the process as well by relying on available data about a home.

He said the online refinancing process feels natural for the generation of technology-savvy millennials. “They want things at their fingertips and by golly we’re going to put it there,” he said.

Lenda plans to expand into three additional states by the end of the first quarter of this year and across the country by the end of 2016. It wants to expand beyond home refinance loans into purchase loans as well, van den Brand said.

James Pishue, president and CEO of the Washington Bankers Association, said he was unfamiliar with the company but questioned how it could comply with complex federal disclosures required by Dodd-Frank legislation and the Consumer Finance Protection Bureau.

Charles Clark, director of the division of consumer services in the state’s Department of Financial Institutions, said Lenda was licensed in December to operate in the state. The company has not yet gone through the state’s examination process, which is conducted routinely for established companies, he said.

Clark said consumers can learn more about the options and costs of home loans through the state’s online guide for home loans, available at dfi.wa.gov/financial-education/.