“If they (servicers) make a mistake, it could have long term impact to their entire business. Changing the software that you’re using or adopting new software that hasn’t been given that stamp of approval with every single possible regulator out there can cause you a lot of problems.”
From the viewpoint of a start-up, regulation can often appear to be little more than ballast, and for Wang, dyed-in-the-wool traditionalists who find it hard to accept “unusual” start-ups like Valon are a huge stumbling block.
“(Start-ups) are unusual to begin with for regulatory reasons. In addition, existing investors of both loans and servicing are also generally looking for a stable business and not really a start-up. So, getting into this space from the very beginning is a very difficult task,” he revealed.
That hasn’t stopped Valon’s upward trajectory since it was founded two years ago, in 2019. Licensed across 49 states (New York is expected to join the portfolio by the end of the year), the company has some big guns behind it, including Starwood Capital Group and Freedom Mortgage.
By the end of the year, Valon expects to service more than 20,000 consumers and $6 billion in mortgages on its platform.