Digital Mortgage Exchange MAXEX Lands Investment From JPMorgan

The digital mortgage exchange MAXEX announced on Tuesday (June 22) that it had secured a strategic investment from J.P. Morgan.

According to a company news release, the investment will be used to “accelerate broad market adoption of the MAXEX exchange platform for buying and selling loans in the U.S. non-agency mortgage market.” Existing investors AGNC Ventures and Moore Asset Backed Fund, LP also took part in this new investment, the terms of which were not disclosed.

MAXEX, which says it is the first digital mortgage exchange to allow for the trading of residential loans through a sole clearinghouse, reports this investment comes at a time of “record growth.” The company more than tripled its volume from 2019, and as of the close of Q1, had exceeded $20 billion in aggregate trade lock volume since the launch of its platform.

MAXEX, which provides liquidity for non-agency home mortgage loans, says its platform is used by lenders and investors to “greatly reduce the friction costs and risks associated with acquiring, securitizing and selling mortgage loans.” More than 200 U.S. financial institutions have used MAXEX’s proprietary standardized contracts to trade on the exchange.

This investment comes at a time when the U.S. Consumer Finance Protection Bureau (CFPB) is putting mortgage servicers under a microscope, as PYMNTS reported in April. At the time, the CFPB proposed new measures including a review process that would prevent mortgage servicers from initiating foreclosures until after the end of this year.

The plan was to examine whether mortgage servicers had truly complied with programs set up during the COVID crisis to protect struggling homeowners. Some companies have been accused of failing to provide that help, or of discriminating in how they distributed aid. “We are very concerned and we’re watching closely,” a CFPB official said at the time. “Our supervision team is robustly asking for more data than ever from servicers.”

On Tuesday (June 22), Reuters reported that the agency was set to adopt new regulations that would allow borrowers until 2022 to resume mortgage repayments.