The massive mortgage industry is mainly dominated by banks and large mortgage lending firms like Quicken Loans. However, since the past few years, tech-focused startups have been attacking the antiquated and painful mortgage process. These have built a variety of tools and services to improve mortgage technology, poor customer service, and slow mortgage approvals.

Mortgage represents a huge opportunity for tech startups, with around US$1.5 trillion of new mortgages originated annually in the US and about US$10 trillion of mortgages outstanding that require servicing, and that is just primary residential mortgages.

Digitalizing the mortgage process doesn’t just benefit borrowers, who get better customer experience through design and automation, convenience and efficiency. Digital verification also helps lenders make decisions quicker and based on more accurate information, and can further improve compliance and quality as it takes out the human error.

“More and more transactions are moving online, and today’s consumers – especially the 35-and-under set – take it as a given that they’ll be able to transact online,” Roostify CEO Rajesh Bhat, told HouseWire at the Mortgage Bankers Association annual conference last year. Moreover, “digital saves significant time and effort versus manual, paper-based processing.”

MortgageTech startups can be categorized in different segments. Mortgage processing and workflow software providers, for instance, include loan origination system providers, servicing platforms and other component solutions targeted primarily towards originators, issuers and servicers.

Companies that fall into this category include Blend Labs, which builds and operates a platform that focuses on mortgage lending, Cloudvirga, the company behind the cloud-based intelligence Mortgage Platform® (iMP) designed to streamline the mortgage process, Roostify, which provides a web and mobile service that simplifies and accelerates loan application and closing process, and Preclose, which delivers a mobile app to automate closing transactions for real estate agents, homebuyers, transaction coordinators and service professionals.

Blend Labs is the most well-funded startup in the category with roughly US$42.5 million in disclosed funding from investors like Lightspeed Venture Partners, 8VC, and Founders Fund, among others.

Another category is the tech-based mortgage lenders. This includes companies that are in the business of originating mortgages directly to consumers. For instance, Better Mortgage acts as a direct lender to consumers looking to access mortgage loans. The startup has raised roughly US$30 million in funding from investors like IA Ventures and Goldman Sachs, among others.

Others include LendInvest, a marketplace lending and investing platform for residential and commercial mortgages created by Montello, and Clara Lending, a company specializes in conventional, conforming residential loans in California.

Some marketplace lending platforms such as SoFi offer mortgage loans. SoFi, which began as a student loan-focused marketplace, has raised more than US$1.6 billion in disclosed funding from SoftBank Group and Renren Lianhe Holdings, among other investors.

Other ventures have specialized in mortgage data and analytics. These providers include companies that collect and/or supply data to mortgage originators, issuers, investors or servicers. They include the likes of LoanLogics, which provides loan performance and quality analytics software, Credit Sesame, a credit scoring system, and Cignifi, which develops an analytics platform that delivers credit and marketing scores for consumers using mobile phone behavior data.

Finally, the digital mortgage broker category is comprised of companies that connect consumers to the best mortgage possible by assessing various characteristics of the consumer. These companies include Habito, one of the UK’s leading digital mortgage brokers, but also award-winning Trussle, and Barclays Accelerator alumnus Morty.

John Harrell, the vice president of mortgage of USAA Bank, expects to see mortgages go 100% digital in at least five years. Within two to three years, the majority of the process will be digital, he told HouseWire.

Featured image: A conceptual image of a scale house and mortgage forms for the people buying a house, by Matt Benoit, via Shutterstock.com.