Read the full 2021 Year in Review edition here.
Invigorate Finance is proof positive that market volatility can breed enhanced innovation. As the global economy first began to shift last March with the onset of Coronavirus, two industry professionals with nearly a half-century of collective experience identified a prime opportunity to partner to address an emerging gap in the mortgage sector. Originate Report had the pleasure of speaking with Invigorate Finance President Jennifer McGuinness to learn more about her key takeaways from the past year, how those insights led to a strategic partnership with Ed Fay of Fay Financial, and what trends she anticipates in the near future.
McGuinness brings over twenty-five years of experience in lending and aggregation, banking, asset management, servicing, securitization, and structured finance to Invigorate Finance. Most recently, she was the Founder and Head of Aggregation & Structured Finance for both Mortgage Venture Partners (“MVP”) and Strategic Venture Partners (“SVP”), both named 2020 Top 25 FinTech Innovators. Prior to MVP and SVP, McGuinness held senior or executive roles at Colony American Finance n/k/a CoreVest Finance, Deutsche Bank, and WinWater Home Mortgage amongst others.
Forging Productive Relationships
The initial step in optimizing any process is identifying inefficiencies. With a truly diversified and extensive career in the industry, that spans the full lifecycle of mortgages, McGuinness was able to do just that, pinpointing major issues in the aggregation space: “The majority of aggregation or mortgage investment businesses typically outsource key components of the business , resulting in a general lack of consistency when it comes to implementing standards and practices, which is significant as it can impact the efficacy of the underwriting and assessment phases—both of which are critical in terms of long-term successful outcomes.” Invigorate Finance is a closed loan mortgage conduit aggregator specializing in the development of innovative and enhanced lending programs and the productive aggregation of both residential and business purpose loans.
With a focus on delivering solutions to both lenders and investors through innovative products and efficient processes, thus resulting in mitigating risk while streamlining the origination, asset management, and servicing processes from a client-centered approach, Invigorate Finance is revolutionizing the aggregation business.
McGuiness notes that “Invigorate is a business, not a trade”, and delivers a premium lender and investor partner experience. “We do not outsource operational features like credit. This allows Invigorate to truly understand the loans that we are acquiring and creates opportunities for lenders to build meaningful and productive relationships with us where both parties are mutually invested in long-term sustainability. Additionally, this also saves the lender a lot of time and headaches, as they get answers directly from us. No more chasing down third parties to get an answer that the investor may decide they do not like later. It’s time for lenders to be able to grow their business with a partner that truly understands what they do,” explains McGuinness.
“This aspect of our business model—and the rapport it allows us to build with our partners is key to our relationships historically and has become even more important amidst the ongoing uncertainty associated with the pandemic.”
Facilitating Positive Market Growth
After a truly unprecedented year packed with notable challenges and continued uncertainty, McGuinness understands the importance of keeping close tabs on emerging market trends as a tool to inform business decisions at Invigorate Finance. One of the issues she has noted over the past year is the growing disparity between housing demand and supply levels in certain asset classes.
“The overlapping demand of homebuyers and institutional investors has collectively fueled an exponential growth in home prices, which, combined with historically low interest rates, has enabled potential buyers to submit better offers. At times, it has created a situation where investors are competing with homeowners for the same properties due to the amount of capital that has been raised to, for example, purchase homes to be converted into rentals,” explains McGuinness.
“Invigorate Finance offers ground up construction lines of credit. Building new homes will help equalize this lack of supply, which is essential for market sustainability and as we continue to recover from the COVID-19 industry-wide setback.” Additionally, this same trend has increased equity in homes for those not looking to sell. Invigorate Finance offers first lien home equity lines of credit (“First Lien HELOC”).
“The pandemic taught us that having access to capital is important in times of uncertainty or need, it also taught us that cash management is extremely important. A First Lien HELOC with a single digit interest rate is a much better solution then running up your 27%+ credit cards, it’s the answer to allowing homeowners and investors to benefit from their equity when they want and/or need to, without becoming over-levered or being overcharged.”
If there’s one thing that the past year taught us, it’s that change is a constant. Anticipating these changes and being adequately prepared to adjust and leverage the resulting market opportunities is at the core of McGuinness’ business approach. One of her focuses is technology.
“Technology is becoming an increasingly relevant aspect of not just the lending industry but the entire economy—but it has to be leveraged correctly,” says McGuinness. “You can’t have all the tech and no understanding of the industry dynamics or vice versa—you need both to tap into the utility offered by modernization. Which is why we ensure our tech-forward approach is optimally supplemented with deep industry knowledge that allows us to deliver the best products and process possible to our clients. It also allows us to see trends others may not see and save our partners time and money.”
Invigorate Finance is in a position of strength and growing. Its strategic alignment with Fay Financial strengthens its offering by having access to other real estate lifecycle companies, such as a top five special servicer with Fay Servicing, amongst other sister companies which when combined, brings their partners and clients solutions and efficiency not often found in the industry.