Product showcase: Neat Capital's product and pricing engine

Platform performs multiple tasks in the loan origination process

Product showcase: Neat Capital's product and pricing engine

Neat Capital is a fintech that plays multiple roles in the home-buying process.

The Colorado-based company is a mortgage bank and produces its own mortgage loans. Banks can also use its technology platform and production capabilities for their own purposes. As well, Neat Capital also provides brokerage services to help consumers list and buy real estate.

Words to describe the company’s various services vary. CEO and founder Luke Johnson (pictured) noted, for example, that the company as a whole has been referred to as a both a proptech group and a fintech home financing platform.

The platform

Neat Capital formally announced the release of its Neatify platform in late February – technology that includes a cloud-based loan origination system, a deeply integrated product and pricing and eligibility engine, and point-of-sale application software to automate the application and documentation process. Neat claims the platform can algorithmically process, underwrite, document and produce mortgage loans in about 24 hours.

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Johnson said the underwriting and pricing engine is a particular standout.

“What is driving the intelligence… and capabilities of that platform in a unique and novel way is our underwriting and pricing engine,” Johnson said. “It algorithmically determines whether a loan needs guidelines for a particular program and prices that program out.”

As Johnson sees it, the technology provides “much more” than machine learning.

“Machine learning is more based on correlations and guesswork, whereas this is much more fundamentally algorithmic,” he said. “When we want to determine if you meet guidelines, or which documents we need to collect to verify that you need a guideline, that needs to be certain,” he said.

“In mortgage, there’s not a lot of room for error, and so what we do is we determine with really detailed frameworks whether a borrower and property need very detailed mortgage guidelines, and what documentation we need to produce that loan.”

Other companies say they have underwriting automation, but Johnson said that means their process, in part, includes sending data to groups like Fannie Mae or Freddie Mac via their APIs to see whether their loans are eligible for purchase.

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“We’re describing the full way to completely process and underwrite alone, automatically, without even actually touching Fannie Mae or Freddie Mac,” Johnson said.

Johnson describes his company’s platform as both customer facing and back-office facing, something that qualifies clients even as they’re filling out their mortgage loan application.

“It’s all automated,” Johnson said. “As you’re filling out your income in an application online, it’s telling you this is what it means for you based on your income structure… [and] what you can afford, and the same is true of your assets and liabilities and declarations.”

Johnson noted the platform handles a lot of complex work with results translated into simple terms for customers.

“At the end of the day, we’re sending a couple hundred-thousand scenarios against our pricing and underwriting engine, to then see the whole universe of possibilities of what you actually are eligible for from a financing perspective,” Johnson said.

“Then we distill that information in a really simple-to-understand interface, so you can make an educated decision on what level of downpayment is best for [you], what is the best interest rate available at each level of downpayment, and what… purchase price [you] should be thinking about.”

At this point, Neat Capital has completed about 2,000 loans through the Neatify system but expect to grow this business substantially through the year.

Raising new venture financing

Neat Capital was incorporated in 2015 and its first mortgage lending operations began in 2017.

The company currently has licenses in 14 states, primarily in the west coast through Texas and in the Northeast in states including Connecticut, Massachusetts and Florida. Expectations are that Neat will be licensed in 49-50 states by the end of 2022. Plans call for more than doubling the company’s 100-person workforce by year-end.

Neat Capital has raised approximately $38 million in venture capital to date and is in the process of raising another venture capital round, Johnson confirmed. The precise amount coming in is to be determined, Johnson said, but expectations are that the round will close within the next 90 days.

The origin of “Neat”

Neat Mortgage’s name traces to the idea of creating a system that’s clean and easy to use, Johnson said.

“The idea was to clean up a messy, messy problem for clients… [to] make a neat, tidy process to get a mortgage,” Johnson explained. “Mortgage is characterized by this super long, arduous journey where there’s a ton of back and forth and uncertainty and a mess.”

Neat earned its name, then, by developing a system that puts the process of asking for documents and forms on the front end in a simple way.

“In the first 24 hours we do have a real time, one-session process so that a client can have absolute certainty without all that messy back and forth of getting approved,” Johnson said.

 He added that “Neat” is a low-key word that suits his company overall.

“It’s a little more humble than ‘awesome’ or what have you,” Johnson said, “which fits with our culture, of course.”