American Express AXP is directing its mortgage-hunting customers to bypass traditional brick-and-mortar lenders in favor of a pair of fintech partners.
Amex Recommends: According to a CNBC report, eligible American Express customers who take out a mortgage from either Better.com or Rocket Mortgage by Quicken Loans, a division of Rocket Companies Inc. RKT, can receive a $2,000 statement credit for a conforming mortgage or a $6,000 credit for a jumbo mortgage.
An American Express spokeswoman told CNBC there's no revenue-sharing pact between the companies and the fintechs, although American Express’s venture subsidiary invested in Better.com’s Series C fund raise in 2019.
About Those Fintechs: Quicken Loans was the nation’s largest mortgage lender in 2020, originating more than 1.1 million loans worth $314 billion, according to the Consumer Financial Protection Bureau’s Home Mortgage Disclosure Act data. But that volume came as much by default as by design.
“This has been the general trend since the financial crisis,” said Greg McBride, chief financial analyst at BankRate.com. “Banks have backed off of – but not eliminated – originations. Nonbanks more than filled the void as the market picked up, and the big banks often buy the servicing rights so they’re in the game with less risk and cyclicality on the origination side.”
As for Better.com, the $20 billion in 2020 mortgage originations is considerably behind Quicken, but the company appears gaining momentum. It originated $4 billion in 2019 and the company is expected to get a bigger boost in the fourth quarter when it goes public via the SPAC Aurora Acquisitions Corp AURC.
© 2022 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Your update on what’s going on in the Fintech space. Keep up-to-date with news, valuations, mergers, funding, and events. Sign up today!