Mortgage service fintech Valon increases compliance tracking

Digital mortgage servicing platform Valon will use ACES’ quality management and control software to handle compliance work.

The New York-based services provider and lender is scaling its operations — expecting 150% growth 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 eyes set on cutting the market share held by traditional service providers. 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 key to motivating lenders to use their platform.

The company will use ACES’s platform to “implement a robust quality program that can keep up with a much larger book of business,” it said in a press release.

“With the platform’s comprehensive compliance coverage at all levels and the fact that ACES is constantly optimizing the platform and monitoring the compliance landscape, we knew we could get a ton of value from the system in a very short period of time,” said Christi Weber, senior director of operations enablement at quality in Valon. “We’re a very data-focused company, and ACES gives us a wealth of data that we can analyze to look for trends and see how they affect certain subsets of our portfolio.”

Last year, mortgage fintech enjoyed an influx of cash from venture capitalists to grow the 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 renamed Rithm Capital. Almost half a year later, Valon raised an additional $43.9 million in equity financing with participation from affiliates of Starwood Capital Group and Freedom Mortgage. The company was worth over $500 million, according to a Bloomberg estimate at the end of 2021.

Valon said at the time that the funding Would have gone for employment, development of a loan assignment and property insurance business, and potential future strategic acquisitions.

In November 2021, Valon said it had over 20,000 consumers and 6 billion dollars in mortgages 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 service professionals since the outbreak of the pandemic. The Consumer Financial Protection Bureau has issued many warningss that it oversees how service personnel navigate the end of patience and loss mitigation. It remains to be seen whether any enforcement actions will follow from the CFPB’s promise of increased scrutiny.