As the mortgage industry becomes fintech, Dover’s Keystone Funding just cracked the Inc. 500

Keystone Funding, a Dover-headquartered mortgage company founded in 2006, isn’t brand new to the Inc. 5000 — it was #766 in 2020. But this year, at #407 with 1,186% growth, it can officially say it’s an Inc. 500 company. It’s also the highest-ranked Delaware company on the list that is actually physically located in Delaware.

Published by Inc. magazine, the annually published list tracks the fastest-growing private companies in the United States, based on self-reported data from the companies. To be included on the list, companies must have generated revenue as of March 31, 2017, including at least $100,000 in 2017 and at least $2 million in 2020.

Innovation — some of it fast-tracked when COVID-19 hit — has played a role in Keystone’s growth. That’s thanks in part to majority shareholder Jared Martin, who is an MIT School of Engineering alum and former launch vehicle systems engineer for the Department of Defense.

“He’s really a technologist in the mortgage industry,” Keystone Funding CEO Tim Paret told Technical.ly. “He turned the dynamic around so that work like rewriting, closing and post-closing, which were typically sent out of state, are now done here. We service eight states, and we’re going to be adding three additional states to that roster.”

And in July, former president and CEO of NewRez, Kevin Harrigan, joined Keystone as its chairman of the board of directors. While the NewRez name may not be as recognizable as, say, Rocket Mortgage, it was the fastest growing mortgage originator in the country from 2018 to 2020 under Harrigan’s leadership, according to the chairman.

“We were behind the scenes, a quiet number one for the past three years,” Harrigan said. “And most of that was driven by technology.”

The mortgage industry is now fintech. Or at least, it’s about to be.

“The old days are over with, even though some people are unwilling or unable to recognize that,” Harrigan said. “The same people who are still going into their tax account with a shoebox full of receipts are stuck in the old days of getting a mortgage. The demand in the market now is completely different — it’s for a streamlined, online, process-driven technology supported loan applications.”

Another area that is becoming more technology-based is appraisals, which are now often done virtually. That adoption has been rushed by the pandemic, along with the onslaught of all-virtual-everything.

“COVID came along and rushed the technology part of the business forward really fast,” he said. “The industry pushed things like e-signatures along with valuation of properties without an appraiser having to go inside. COVID helped the mortgage industry mature much much faster. That’s where our investments are going to be — in continuing to provide the ability for a borrower to get a loan with as little manual paperwork as possible, with as little phone calls an interaction as possible, because that’s specifically what the new generation is interested in.”

That said, borrowers who prefer to sit with a loan officer in an office can still do that, too. Paret said Keytone offers both in-person meetings with its loan officers inside retail branches, as well as app-based or other virtual interactions.

Right now, the mortgage industry is in the middle of a refinance boom, which also helps with growth. But Harrigan stresses that such booms in the industry are always finite.

“It’s not the only time it’s ever happened, it won’t be the last time it ever happens, but when the refinance opportunities are gone and everybody has their 2.5 or 3.5% rates, there’s still a really important place for lenders in the industry, and that’s what we’re getting ready for,” the chairman said. “I think what a good lender does, and what Keystone is in the middle of doing, is recognizing that this ‘race to refi’ that everyone has been a part of for the past two years will come to an end sooner rather than later and we’ll have a new set of constituents to serve, and three years from now we’ll be back in the middle of another refinance boom. We’ll stay nimble.”

Harrigan also noted the company’s commitment to philanthropy. As Keystone grows nationally, the plan is to keep giving back to its home state.