Digital mortgage-servicing platform Valon will use ACES’ quality management and control software to handle compliance efforts.
The New York-based servicer and lender is scaling its operations — and projects growth of 150% this year — and that requires “stronger controls,” the company said in a statement this week.
Since its inception in 2019, the company has had its eye on cutting into market share held by traditional servicers. Valon’s co-founder and CEO Andrew Wang said in 2021 that demonstrating consistently higher margins and being compliant with laws and regulations would be the key to incentivizing lenders to use its platform.
The company will use ACES’ platform to “implement a robust quality program that could keep up with a much larger book of business,” a press release said.
“With the platform’s extensive compliance coverage at all levels and the fact that ACES is constantly optimizing the platform and monitoring the compliance landscape, we knew we could derive a ton of value from the system in a very short period,” said Christi Weber, senior director of operations enablement at quality at Valon. “We’re a very data-focused company, and ACES provides us with a wealth of data that we can analyze to look for trends and see how those affect certain subsets of our portfolio.”
Last year, the mortgage fintech enjoyed an influx of cash from venture capitalists to grow its business.
In February 2021, it secured $50 million in funding from a group of investors led by Andreessen Horowitz, Jefferies Financial Group, New Residential Investment Corporation, which has since rebranded as Rithm Capital. Almost half a year later, Valon raised an additional $43.9 million in equity funding with participation from affiliates of Starwood Capital Group and Freedom Mortgage. The company was worth over $500 million, according to a Bloomberg estimate in late 2021.
Valon said at the time that the funding would go to hiring, the development of a loan originations and property insurance business, and potential future strategic acquisitions.
By November 2021, Valon said it had over 20,000 consumers and $6 billion in mortgages being serviced by its platform. The company is approved to service Fannie Mae, Freddie Mac and FHA loans.
Compliance has been top of mind for all servicers since the onset of the pandemic. The Consumer Financial Protection Bureau has issued numerous warnings that it is monitoring how servicers navigate the end of forbearance and loss mitigation. It remains to be seen whether any enforcement actions will result from the CFPB’s promise of increased scrutiny.
