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March 12.2025
3 Minutes Read

Tomo Mortgage Secures $20M in Series B Funding to Transform Home Buying

New York skyline during sunset for Tomo Mortgage Series B funding.

Transforming the Mortgage Landscape: Tomo Mortgage's Latest Achievement

Tomo Mortgage is making headlines again, this time by securing a significant $20 million in its Series B funding round, which brings its overall investment to an impressive $130 million. Established by former Zillow executives, this ambitious digital mortgage lender aims not only to enhance the home-buying experience but also to reshape the entire mortgage industry with its innovative use of AI technology.

Pioneering a New Era in Home Buying

With Progressive Insurance joining the roster of investors—previously filled by Ribbit Capital, NFX, and DST Global Partners—this funding is set to drive Tomo’s expansion into new markets and bolster its team with loan officers and mortgage professionals in cities like Detroit, Seattle, and New York. The clear commitment from investors reflects a shared vision of modernizing the home-buying process and making it more accessible and less intimidating for customers.

The Heart of the Mission: Lower Costs, Improved Service

Tomo's core philosophy revolves around reducing unnecessary costs associated with traditional mortgage lending—excessive fees and complicated terms that have historically plagued consumers. CEO and Co-founder Greg Schwartz vocalizes this mission, stating, “Outdated business practices cost U.S. homebuyers billions every year.” Tomo is leading a charge to eliminate these financial pitfalls by harnessing AI to streamline processes, making mortgage approvals not only faster but also more affordable. On average, homebuyers stand to save about $4,000 during the closing phase, thanks to Tomo's commitment to transparency and straightforward pricing.

Growth Despite Industry Challenges

In a year marked by stagnation in the mortgage industry, Tomo has seen remarkable growth—reportedly 3.5 times over the past year. With its reception of AI-driven technology, the company has emerged as a strong player within the competitive lending market, boasting interest rates typically 0.50% to 1% lower than other lenders. Investors are particularly excited about Tomo's approach because, unlike many others in the industry, Tomo's use of proprietary technology allows them to cut out origination fees and lengthy processing delays, which are common pain points for borrowers.

A Vision for the Future

Looking ahead, Tomo is set to relocate its headquarters from Stamford, Connecticut to New York City, which could position it more favorably in the rapidly evolving fintech landscape. This strategic move underscores their intention to remain at the forefront of the industry by fostering continued growth and innovation. Progressive's Erwin Raeth shared insights on their collaboration, emphasizing how their dedication to understanding customer needs aligns perfectly with Tomo's mission.

Conclusion: A New Hope for Homebuyers

The strides made by Tomo Mortgage signal a transformative moment in the home-buying experience, combining technology and compassion for the consumer's journey. As they gear up for substantial hiring and product innovation, Tomo makes a compelling case not just for investors, but for potential homebuyers who have long sought a better avenue to homeownership. With innovative solutions and a focus on reducing costs, Tomo is shifting the paradigm and proving that it’s possible to modernize the mortgage market.

To find out more about how Tomo Mortgage can assist in your home buying journey, keep an eye on their upcoming initiatives and offerings!

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11.11.2025

Zillow's Broker Kickbacks Lawsuit: What Homebuyers Should Know

Update Understanding Zillow's Latest Legal Troubles Zillow, one of the most recognized names in real estate, is facing yet another class-action lawsuit, filed on November 7, 2025, in Washington District Court. The lawsuit draws attention to Zillow's Premier Agent program, accusing the company of allegedly engaging in unethical practices by requiring agents to meet certain mortgage pre-approval quotas to maintain access to valuable leads. This scenario paints a troubling picture of conflict of interest for agents who are supposed to act in the best interest of their clients. Allegations: A Closer Look at the Claims The plaintiffs claim that Zillow is violating the Real Estate Settlement Procedures Act (RESPA) and the Washington Consumer Protection Act, jeopardizing the fiduciary duties that real estate agents owe to their clients. The crux of the complaint resides in the assertion that agents are effectively being coerced into funneling clients towards Zillow Home Loans, a practice that not only impacts agent trustworthiness but also the options available to homebuyers. The lawsuit names Araba Armstrong, a first-time homebuyer from Alaska, as the lead plaintiff. Armstrong alleges that she felt pressured to use Zillow’s financing services, a sentiment echoed frequently among consumers who rely on real estate brokers for unbiased guidance. The Implications for Consumers and Agents One of the most concerning aspects of this ongoing saga is the potential impact on homebuyers. Those relying on real estate agents for impartial assistance may find themselves steering towards mortgages that may not offer the best rates or terms. By mandating these pre-approval quotas, Zillow's policies appear to turn its agents into salespeople for its own loan products rather than giving clients the broad, impartial advice they need during such a critical financial decision. Zillow’s Push for a “Super App” Further complicating matters is Zillow's broader vision of becoming a comprehensive “super app” that integrates every aspect of the home-buying process. This ambition, while innovative, raises serious questions about the ethical boundaries of such a platform. As Zillow expands its reach, can consumers be assured that their best interests will remain a priority, or will they simply become cogs in a machine designed to drive revenue for Zillow? Context: Previous Legal Challenges This recent lawsuit is not Zillow's only legal woe. In September 2025, a different class-action suit was filed against the company over its Flex agent tactics, which similarly accused it of inflating costs for consumers. These lawsuits reflect growing scrutiny over Zillow’s business practices, highlighting a contentious tension within the real estate industry. A Community Perspective on Real Estate and Trust For many homebuyers and sellers, real estate transactions are deeply personal. The emotional stress combined with significant financial implications makes trust between agents and clients essential. When that trust is compromised, as the lawsuit suggests, it can substantially impact community stability and relationships. Understanding the potential ramifications of these practices encourages buyers and sellers alike to be more diligent in their choices. This unfolding legal drama beckons us to examine our roles in this interconnected community, asking us to seek out transparency and integrity in real estate dealings. As stakeholders, consumers must demand clarity and fair practices in the marketplace.

11.08.2025

Navigating Credit Score Changes: Fannie Mae and Freddie Mac Behind the Curve

Update Understanding the Delay in Credit Score Adoption Fannie Mae and Freddie Mac, pivotal players in the U.S. housing finance system, are caught in a web of complexities as they navigate the acceptance of more inclusive credit scoring models. In July, Federal Housing Finance Agency (FHFA) Director Bill Pulte announced an intention to embrace VantageScore 4.0 immediately, a model designed to assess credit risk more inclusively. However, the announcement was met with industry surprise, given previous changes that had been rolled back. Today, lenders might find themselves perplexed as they anticipate the rollout of these new scoring guidelines. Why the Transition is Complicated The adoption of VantageScore 4.0 isn't just a simple switch. Fannie Mae and Freddie Mac face numerous technical challenges in integrating this new model. Historical data and loan-level price adjustments (LLPAs)—necessary for lenders to assess risk accurately—are key components still pending. Currently, lenders are waiting on LLPAs tailored for VantageScore 4.0, which are expected to be released no sooner than late 2026. Additionally, while FICO Score 10 T has been generating concern among lenders due to rising costs and a lack of historical data, it adds to the anxiety surrounding credit evaluation reforms. The Implications for Homebuyers The ultimate goal of shifting to more inclusive credit models like VantageScore 4.0 is to enhance access to homeownership for millions of Americans. The FHFA projects that the implementation of this credit model could facilitate up to $1 trillion in new, high-quality mortgages and provide up to five million prospective buyers an opportunity to qualify for homeownership. However, current uncertainties mean many may still face hurdles on this journey. Revolutionizing Mortgage Lending As stated by VantageScore's leadership, the updated model eliminates unnecessary requirements that frequently disqualified borrowers, such as the obligation for recent credit activity. These inclusive measures, expected to allow for a more accurate assessment of financial behaviors—including rental and utility payments—could transform the traditional lending landscape, allowing previously underserved populations to access loans. Counterarguments To Integration Yet, the push to transition isn’t without criticism. Some industry leaders argue that pushing for these new models could undermine the established FICO scoring model, leading to an undefined competitive disadvantage for Fair Isaac, the firm behind FICO scores. The concerns that an abrupt shift may exacerbate competition difficulties in the credit scoring realm highlight the contentious atmosphere surrounding the proposed changes. Looking Ahead: The Future of Credit Scoring As we approach the conclusion of 2023, it’s clear that the future of credit scoring in the mortgage industry is rife with challenges and opportunities alike. For borrowers eager for inclusivity, the wait may be frustrating, but it is essential to ensure a smooth transition that balances risk and access. Continued dialogue and transparency in how these scoring models are implemented will play a crucial role in shaping a more equitable lending future. The transition to inclusive credit models marks a critical evolution in addressing systemic inequities in home lending. As developments unfold, the hope remains that newer scoring systems will pave the way for a more inclusive narrative in the mortgage market.

11.08.2025

Top Declutter Tips: Smart Strategies to Maximize Your Home's Space

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