Housing data giant CoreLogic buys mortgage fintech Roostify: what’s in it for lenders & consumers?


Housing data giant CoreLogic just bought digital mortgage software maker Roostify for an undisclosed sum — the rumored number is favorable for CoreLogic, and pragmatic for Roostify given acute cycle strain. Here’s a strategy rundown as CoreLogic buys Roostify, and what’s in it for lenders and consumers.


CoreLogic went private mid-2021 in a private equity deal valuing the company at about $6 billion. Roostify was founded in 2012, and only raised $65 million, including a $32 million series C in January 2021. This total funding is multiples smaller than key competitors.

I’ve long respected Roostify founder Rajesh Bhat’s bootstrap approach to building incredibly complex software in a highly cyclical market.

Roostify and its competitors like Blend* (founded 2012, IPO 2021, $401m market cap today) and SimpleNexus* (founded 2011, $1.2b sale to nCino 2021, which now has $3.16b market cap) enable consumers to apply for, manage the process, and close mortgages on their phones.

They also enable lenders to run this process alongside consumers and remain compliant with every detail required by numerous regulators.

It’s push-button mortgage software that lenders brand as their own to make things easier for themselves and consumers.

The consumer simplicity part has worked, thanks to companies like Roostify.

The lender simplicity part has proven elusive for a few reasons.


First, the early-years sales pitch for these mortgage ‘point of sale’ (POS) systems was making the mortgage application process easier for consumers. But the rabbit hole was always deeper than that. POS systems must be where lender and consumer run the whole process together from application to close. This is harder than it looks with all the parties — lenders, consumers, realtors, title companies, appraisers — and all the regulatory requirements.

Second, the POS value proposition was first predicated on directly-connecting bank accounts, payroll providers, and tax filing partners so consumers didn’t have to deal in paper or uploaded docs.

But approvable loans comprised of only direct-connected data (and no supplemental uploaded docs) are still a minority of the 4.63 million the mortgage industry will do this year, per MBA. We’ve gotten away from paper in the last 10 years, but still too much data is stuck inside PDF docs. Which makes approving loans too manual still.

Third, the POS systems were supposed to get the loan officers out of the loan origination systems (LOS) of record that lenders use. ‘Let salespeople sell using light POS software, not monkey around with complex LOS software.’ Alas, those bigger systems — dominated by Encompass from ICE ($58b market cap) and Empower from Black Knight ($10b market cap) — are still where most of loan origination work happens, despite the messaging we all tell each other.

Also, those who control LOS systems control revenue and clout in the giant mortgage origination software space. And it’s giant indeed: America has averaged $2 trillion in new mortgage originations in each of the last 29 years.**


Still, POS systems are quite valuable to lenders and consumers. But full success — and usefulness to lenders and consumers — depends on nailing all three items above, especially the last two.

To achieve item 2 above, Roostify did a clever deal with Google in late 2020 to machine read docs. This gets data out of docs that lenders can use to make formal, regulatory-compliant loan decisions. Roostify was a leader here, and I hope they get to continue this important progress under CoreLogic.

There’s a chance for post-deal slowness here since CoreLogic already has a income/asset analysis tools of their own. But the CoreLogic mortgage suite has other useful tools to make Roostify’s POS better (more below).

To achieve item 3 above, I’ll be very interested to see if CoreLogic buys an LOS provider. Black Knight just put their Empower LOS up for sale, ostensibly to assuage antitrust concerns about their pending acquisition by ICE.

And The Basis Point often hears from investors that other LOS platforms are willing to sell.

This could be an interesting play for CoreLogic as they build their software capabilities.

Also notable: because CoreLogic is so deep into property and valuation data, this should provide a big lift to Roostify’s consumer experience and lender efficiency.

For consumers, they can maybe do home search as part of their mortgage process.

For lenders, they can do lightning fast valuations on properties once Roostify mortgage applicants get into contract on a home they’re buying.

This would be powerful for lenders and consumers.


For CoreLogic, this deal gets a formidable data company deeper into mortgage software with a credible digital mortgage SaaS leader.

For Roostify, this gives them access to CoreLogic’s marquee lender customer list, including major financial institutions. These big orgs, in this acute part of the market and fintech cycle, require software partners with scale resources. This deal does that for Roostify.

Congrats to both parties on the deal.

I love seeing the industry structure find its shape as the fintech era matures.

Please comment or reach out directly with questions.


CoreLogic Buys Roostify, Expanding Digital Mortgage Capabilities

Details on CoreLogic’s mortgage suite

Strategy briefing on Roostify competitor Blend*

* Blend IPO’d near $4 billion in valuation, and market cap is now $401 million due to adverse market shift. Blend raised $665 million before going public. SimpleNexus raised $128 million before being acquired by nCino, a core banking platform now worth $3.16 billion. Blend extended their mortgage POS capabilities to also address other banking products before nCino bought SimpleNexus. Now the two firms more directly compete not just on mortgage, but also broader banking fintech. In a post-IPO Blend strategy post, I noted 5 valuation drivers for Blend, with item 5 asking if they should go way deeper in mortgage as some argue. With nCino SimpleNexus competing on the mortgage-plus-banking side and CoreLogic Roostify competing on the pure-breed-mortgage side, this is a question I’ll revisit soon.

** The mortgage servicing software space is also giant, powering every customer and investor interaction on $13 trillion in outstanding mortgages. And the pending-regulatory-approval bid by ICE (dominant in originations software) to buy Black Knight (dominant in servicing software) is a clear indicator of originations and servicing software strategies converging. More on this convergence also coming soon.




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