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Interest rates are up and originations are down, but mortgage technology provider Maxwell has closed its second acquisition of the year and is open to more deals as it pursues a goal of becoming a one-stop shop for more local lenders during a cyclical downturn in the market.
In May, Maxwell grew its market share by acquiring Richmond, Virginia-based LenderSelect Mortgage Group, a capital markets provider to more than 180 community banks and credit unions.
Now Maxwell has acquired Chicago-based digital mortgage lending platform Revvin, developer of a consumer-facing “low-code/no-code” point-of-sale solution that’s used to take more than 20,000 mortgage applications a month.
Formerly known as MortgageHippo before rebranding in October, Chicago-based Revvin’s technology and customer base were both attractive to Maxwell, CEO John Paasonen told Inman.
John Paasonen
“The LenderSelect acquisition and the Revvin deal are similar in the sense that they are both bringing us new customers,” Paasonen said. “Revvin has 26 lender clients that will now be part of the Maxwell platform, and have instant access to all the other products and services that we offer.”
While the LenderSelect deal gave Maxwell new capabilities in capital markets, Revvin has developed a sophisticated point-of-sale solution — the software that allows consumers to submit loan applications and documents online — that will help Maxwell up its game in that department.
“Their point-of-sale is built out, it’s got a great feature set,” Paasonen said. “They’ve built a low-code/no-code workflow customization platform to allow lenders to define their own business rules as borrowers move through the process. That’s something we’re excited about, and they have a number of integrations with third-parties that we don’t have.”
Although terms of the sale were not disclosed, Paasonen said about 15 Revvin team members will join Maxwell. Broadhaven Capital acted as Revvin’s advisor, while Maxwell’s internal corporate development team handled its side of the deal.
Val Saportas
“Revvin has always prided itself on offering forward-thinking point-of-sale technology to lenders, with a focus on a configurable workflow management powered by modular components,” said Revvin co-founder and CEO Val Saportas, in a statement. “As a part of Maxwell, Revvin technology will continue serving that mission, while our existing clients gain a powerful competitive edge with access to Maxwell’s breadth of mortgage solutions and team of industry veterans.”
Paasonen said Maxwell will continue to invest in both Revvin and Maxwell’s existing point-of-sale solution, promising that “Revvin customers aren’t going to miss a beat. Both sets of clients will benefit from the years of work that both teams have invested, as we start to unify those platforms over the course of the next 12 to 18 months.”
Eventually the Revvin brand will be “pulled into the Maxwell brand,” Paasonen said, as the company continues its quest to help local lenders tackle the entire mortgage origination process.
Tool for local lenders as market resets
Co-founded by Paasonen and Rutul Davé in 2015, Denver-based Maxwell Financial Labs Inc. and its subsidiary, Maxwell Lender Solutions Inc., do business as “Maxwell.” Maxwell said Wednesday that to date, it has facilitated over $275 billion in mortgage loan volume for more than 300 non-depository mortgage banks, credit unions, brokers and local banks.
A $52.5 million raise in 2021 allowed Maxwell to hire new talent in its product, engineering, sales and marketing departments. Later that year, Maxwell rolled out a new product, Maxwell Processor Edge, geared at helping small-to-midsize mortgage lenders employ machine learning to accelerate the document review process and catch mistakes before loans are underwritten.
Since then, rising home prices and mortgage rates have curtailed both mortgage refinancing and purchase loan originations, leaving lenders looking for ways to cut costs while still competing aggressively for what little business remains. Maxwell thinks it can continue to grow by being a one-stop shop for lenders and helping them deliver the best experience, product and price.
“Lenders need more cost efficiency and this market reset is putting them in a position where they have no choice but to make some hard decisions,” Paasonen said. “What we really help lenders do is move things that are fixed costs into variable costs. So we’re able to take their back office fulfillment, and do that for them on a fully variable basis. We’re able to give them access to better margin in the capital markets when they sell those loans. And we’re able to lower their costs and increase productivity with our software.”
Even as rates have gone up and mortgage originations declined, Paasonen said Maxwell has grown the volume of loans it helps facilitate by 10 percent year-over-year, compared to a 50 percent decline for the industry as a whole.
“Lenders are finding Maxwell an attractive place to run their business to drive down costs, improve quality and productivity and enhance their margins,” he said. “So those remain really key to our business as the market resets.”
Paasonen said Maxwell has looked at “well over 35 potential acquisition targets” in the last year, and remains on the lookout for more opportunities that further the company’s goals of lowering costs and increasing productivity for mortgage lenders.
He said future acquisition targets would be in “broad categories where we’re investing ourselves, in our own product and engineering. If we identify a company that seems like it’s a good synergistic fit, we’ll take a look.”
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