Adam Rothblatt, Brian Faux and Nora Apsel cofounded Morty in 2016 as a solution to the difficult and often confusing process of first-time home-buying.
Morty
Buying a first home is, for most people, not a simple purchase. Calculating credit scores, getting pre-approved, finding a lender and eventually closing are critical steps that takes time usually allocated to weekday business hours.
For people who can’t step away from their daytime jobs, Morty, an online mortgage brokerage startup, has a solution. Nora Apsel, co-founder and COO, shared the real-world example of a nurse with a workload that made a long phone call going through her financials during mortgage broker office hours unfeasible. While she tended to patients by day, she signed up for Morty to purchase a mortgage at night. “Most people don’t know that they can get their mortgage online,” Apsel told Forbes. “They think that you have to go to a traditional bank, or the one that maybe your parents are referring you to.”
Morty does what fintech startups have done for small business, personal and student loans: bring mortgages online and make them more transparent. With its latest redesign, Morty customers can receive a Home Financing Score and real-time loan pricing, making it even easier to calculate how much they are eligible for and if the offer will be accepted, choose from a variety of lenders and close on a mortgage. It’s now offering services in 34 states plus Washington, D.C., an expansion backed by an $8.5 million Series A funding round led by Prudence Holdings, with investment from Thrive Capital and Lerer Hippeau, bringing the company’s total investment to over $11 million.
Morty is completely free for the homebuyers. Its platform is able to automate steps of the mortgage process, like instant verifications for pre-approvals, to bring the closing process time to as little as two weeks — less than a third of the industry average. Morty acts as a mortgage broker, and charges a fee off the principle of the loan that’s paid for by the lender, Apsel says.
Because Morty is a mortgage marketplace, homebuyers can choose from over 20 lenders to find the best option for their needs. “We believe that people should have optionality when they’re shopping for the largest purchase of their life,” Apsel says. “If you go to a direct lender, then you only get them, as opposed to us, where you’re getting all of the lenders on our platform.”
This also leads to greater transparency, according to Gavin Myers, general partner at Prudence Holdings. With the traditional method of using human brokers, customers aren’t able to see the process behind the prices the brokers bring them, Myers told Forbes.
Morty — a play on the word “mortgage” — was founded in 2016 after Apsel and Adam Rothblatt, the company’s CTO, met Brian Faux, CEO and then-senior advisor for the U.S. Department of Housing and Urban Development. The three launched the first iteration of Morty as a digitized mortgage application, building features over time that makes it even easier for consumers to walk through the entire mortgage process on Morty. According to the company, thousands of homeowners have registered with Morty and the company has seen over 100% year-over-year growth.
At launch, the founders assumed millennials in their late 20s would make up Morty’s primary clientele. Instead, Morty’s top users are in the 30 through 50 age range, people who are price sensitive as they navigate the purchase of their first home, Apsel says. Morty has done especially well in states like California, Colorado, Pennsylvania and New Jersey.
Still, one of the startup’s challenges is brand awareness. While Morty has reached over 50% of first-time homebuyers researching or looking to make a purchase, many people discovered Morty after they closed the deal. “We talked to a number of homebuyers who are like, ‘Oh, I wish I had known that you guys existed,’” Apsel says. “And so for us, our goal is really to make sure that we’re getting in front of them before that.”
While Morty has automated steps of the mortgage process, it also provides detailed information on home buying, including in the form of in-house mortgage loan experts, Myers says. These loan officers can also provide the human touch and support consumers might need.
“Real estate is a very emotional thing for most people,” Myers says. “It’s their home, it’s where they live, it’s where their families reside. And it also happens to be the type of transaction they don’t do a lot in their life.”