Staircase, the company building integrated, digital infrastructure to accelerate tech-enabled mortgages, has secured $18 million in Series A funding led by Bessemer Venture Partners with participation from Avid Ventures, Clocktower Technology Ventures, Metaprop Ventures, RRE Ventures, and Zigg Capital, as well as a collection of notable angels, including Tom Montag, COO of Bank of America. In an industry hampered by disparate and often dated technologies, Staircase provides an application programming interface (API) platform that brings together the numerous parties involved in the mortgage origination process, from borrower application to employment and income verification through to closing and fulfillment.
“The frictionless integration of all the parties involved in producing a mortgage loan creates enormous benefits for both borrowers and the companies that serve them,” said Adam Kalamchi, CEO and founder of Staircase. “Enabling each participant in the process to exchange data with one another in just a few clicks is a game-changer.”
“We make it easy to access all the information required to originate and underwrite a mortgage in mere seconds or minutes—instead of weeks or months—as is common now. Staircase is doing for the mortgage industry what AWS marketplace does for enterprise infrastructure,” Kalamchi added.
It currently takes an average of 45 days to obtain a mortgage loan. It’s also a very costly process. According to a report issued by the Mortgage Bankers Association (MBA) on November 30, total loan production expenses rose more than $2,000 over a seven-year period, from an average of about $7,000 per loan at the end of 2014 to $9,140 per loan in the third quarter of 2021.
“A big reason why it takes so long and costs so much to produce a mortgage is the lack of efficient integrations,” Kalamchi said. “The sheer number of entities and systems that must share and validate data to originate a loan makes it a complicated transaction. The lack of a universal language among all of these systems makes it even more difficult.”
Staircase ensures that all parties involved in originating a mortgage don’t need to adopt a common language but can still communicate seamlessly. By providing a platform to integrate disparate systems, Staircase eliminates the challenges that typically prevent rapid adoption of technology in the mortgage origination process while ensuring compliance with legal and regulatory standards. In short, Staircase normalizes the data and helps make sure that each player can get the information it needs from others in the ecosystem.
As an API layer, Staircase integrates with any existing system or process. It has built adapters specifically for integrations with some of the leading mortgage point-of-sale (POS) and loan origination system (LOS) platforms in addition to dozens of service and technology providers that must communicate with those systems.
“Now, lenders, technology companies and service providers can be relieved of having to create and maintain custom APIs whenever they want to integrate with a partner and can instead simply focus on selecting and leveraging the best offerings on the market,” Kalamchi said. “As a result, they can have many more data partners to suit a variety of needs and circumstances which is beneficial to all involved. This has never been done before in this industry.”
“Consumer financial services have been entirely transformed over the past decade, but the mortgage industry remains in the dark ages due to incumbents’ inability to leverage the modern infrastructure and data providers that have impacted other categories such as payments, consumer banking, installment lending and wealth management,” said Charles Birnbaum, Partner at Bessemer Venture Partners. “We have seen plenty of companies digitizing each of the many steps it takes to close and service a mortgage, but until they can all work together more seamlessly, the industry will continue to remain behind other financial products. Staircase is building a platform that will take the entire space to the next level.”
The Place for Lending Visionaries and Thought Leaders. We take you beyond the latest news and trends to help you grow your lending business.