A new mortgage company called Clara has plans to change how borrowers take out mortgages by streamlining parts of the system and completely revamping others. Currently, Clara is offering mortgages in California, but the company plans to expand to four other states soon and to be nationwide by December 2017.
Jeff Foster, the founder of Clara, brings his years of work as a policy advisor for the U.S. Treasury Department to the table. During his years there, Foster saw first-hand how the mortgage process contains many inefficiencies. In 2014, he left the department and joined with Lukasz Strozek to begin transforming the process of buying a home. When the two launched Clara earlier in 2016, they did so with $27 million of funding from several venture capital firms.
Clara's mortgage process stands out from other lenders in several ways. One of the company's main policies is to educate potential homebuyers. Many, Foster says, do not understand basic loan terminology such as what a fixed rate is. Clara also makes use of an online hub that Foster claims helps make the process of applying for a mortgage more efficient. The platform allows borrowers to auto-fill forms needing repeated information, shows borrowers the loans they qualify for, and provides information about these.
While Clara is currently a mortgage-only lender, there are plans to expand into lending for other purposes in the future.