“Until he got all rich and fancy so that he no longer understands the common person’s plight.
Stash probably doesn’t even practice any of these money-saving things he preaches any more!”
When I read things like this, I can’t help but laugh. Because on the one hand, when you put a bunch of personal life details online like this, being misunderstood is just part of the package. But on the other hand, if the critics could peek in and see our real lives – not just mine but those of all the Mustachians – they would have to give up their conspiracy theories and accept the fact that this stuff just works.
Because really, not much has changed when it comes to the basics. Like many MMM readers over the past twelve years, my total wealth level has increased pretty regularly. But also like many of us, I haven’t felt the need to change very much about my spending because I was doing my best to live an enjoyable life in the first place.
How have so many people found such great success? I think we Mustachians have something that’s a bit more rare and special than standard financial advice, which is what makes it work so well:
Standard Advice: Slash your spending and make sacrifices until you reach a certain savings percentage, and beyond that it doesn’t matter, it’s all personal choice. More income? Great, that means you don’t have to sacrifice as much! FatFIRE for everyone!
Mustachianism: Cultivate a love of efficiency, creativity, self awareness, and self improvement. Use this knowledge to improve your life in all ways, including those which help you live better even as your monthly expense rate drops over time.
So what does this mean in practice?
Well, I’ll give you some examples from my own present-day life. Things I do because I happen to enjoy them, which also happen to save a lot of money. Some of these are normal, some are silly and may end up in some future gossip magazine hit piece, but all of them happen to work for me, so the critics can be damned.
As I list each item, I’ll include an estimate of how much the activity saves me per decade, because you should always think at least in terms of decades.
To make that calculation yourself, just use the “rule of 172” – take a monthly expense and multiply it by 172 to estimate how much it would compound into over ten years, if invested.
1) Fixing my own House (and everybody else’s too)
Construction projects from recent years, at home and around the state.
I’m a big believer in self-sufficiency, and working to build up the skills to manage the most important parts of your own life without depending on too many things (or people) that are outside of your control. In other words, one giant recipe for a happy life is simply to Become a Producer of the Things You Most Enjoy Consuming.
And in my case, I happen to love houses. I like living in beautiful, functional spaces and sharing them with friends. But most houses are ugly and poorly designed when you buy them, so I realized that I also love solving problems and redesigning old buildings to become new again. I enjoy this process so much that I spend most of my free time doing it – on both my own properties and the homes of friends.
And I love teaching other people to gain power over their own houses too. It’s amazing how great people feel as they lose their fear and dependence on outside contractors, and gain the ability to fix and maintain things with their own two hands.
Savings: An average of $20,000 per year = $287,000 per decade
2) Craigslist and Community
Members of our coworking space, swapping valuable free stuff every day.
You know what’s great? Having so much money that you can buy whatever you want – high quality things which get delivered to your front door the very next day.
You know what’s even better? Not buying some of those new things, and instead finding ways to share, repurpose and buy equally high quality items from other people who don’t need them any more. All while building up your own community and creating new friendships in the process.
Craigslist, Facebook Marketplace, and even NextDoor all have Buy Nothing groups for most areas. In the MMM-HQ community, we run a Discord server with about 200 local people, who chat around the clock on a wide range of subjects. They help each other with major projects in one channel called #diyhowto, and give away and sell things on #forsale and #buynothing.
Although our private Discord group is my favorite, I also use Craigslist regularly, and probably save (and earn) a few thousand every year thanks to the habit:
Savings: About $42,000 per decade
3) Bikes over Cars
Sure glad I’m not stuck in a Jeep on these off-road trails!
We all know that Mr. Money Mustache’s biggest contribution to personal finance is to insist that bike transportation is the best way to get around. And I still feel this way. As we learned in The True Cost of Commuting, cars cost at least 50 cents per mile to operate, while bikes are much cheaper, mainly due to reduced depreciation and maintenance costs (which are even bigger than the gas savings).
I do still use bikes (or walking) for at least 95% of my local trips these days, but because I live in the center of a small city, my life is pretty local. So this still only adds up to about 2000 miles per year, a savings of “only” $14,000 per decade.
But when you choose active transportation, there’s much more to the picture than just cutting your car expenses. You’re changing everything about your physical and mental health picture for the better, which brings us to the next point of…
4) Muscle over Motor
Digging out the crappy old window wells to build a bigger terraced garden.
Although I’m no competitive athlete, whenever I see an option to make my body work a bit harder, I usually take it. Stairs instead of elevators, running the golf course instead of using a golf cart, moving my own furniture and appliances instead of calling a mover, shoveling snow and raking leaves instead of using a machine.
When I face a decision like this, I simply ask myself the question:
“Well, Mustache. Do you want MORE health and fitness, or LESS?”
Putting it in that context makes the answer obvious. Every bit helps, because when it comes to your body, the rule is pretty much use it or lose it.
But how much money does this save? There’s no real way to calculate it exactly, but I like to think of it this way: The US average health care spending is about $13,000 per person per year. My lifetime costs due to illness or medication so far have been just about zero, plus I know I’ve had more energy and greater productivity due to being healthy. Let’s just put it very conservatively and set the estimated savings and benefits at $10k per year which means
Estimated Savings: $140,000 per decade.
5) Saving Energy by Running my home like a Glamping Retreat
Outdoor cooking, showering, laundry and even a homemade gym? Why not?!
Here’s where things get a bit silly, but my level of joy is actually at its greatest.
My personality type is probably a weird combination of an engineer, a carpenter, an artsy hippie, and a mad scientist. Oh, and a devoted homebody too. Because of this, my favorite activity most days is to just run around my house taking care of things and trying new little experiments and improvements.
Sometimes I’ll cut a few big holes on on the South side of the house and install sliding doors and big windows to allow nice sunbeams and passive solar energy to get into my house and give me free heat in the winters. Other times it’s just smaller things to save energy and live more at at one with the seasons of my area:
optimizing the use of air conditioning by running fans at night and building heat tolerance during the days (we set the A/C to only kick on at about 80F)
Enjoying most of my showers outside, with free hot water from the 100 foot garden hose that happens to be coiled in a sunny spot
Cooling myself and get free energy boosts by jumping in the “cold plunge”, which is simply an unheated hot tub I have set up in my back yard
Doing most of my cooking and dining outdoors with an induction cooktop, gas grill, espresso machine, and mini convection toaster oven deal that I keep set up outside during the warmer months of the year
Drying 99% of my loads of laundry out on the line instead of using the clothes dryer
I even charge my car with a little off-grid array of solar panels set up in the driveway (from Craisglist, of course!), which gives me free electricity for driving without going through the permit-hell hassle of a full grid-tied system in my city’s currently solar unfriendly environment.
Even taken all together, these things are pretty small – the average combined gas and electric bill for my area is about $250 per month, while my usage adds up to about $75. So while we’re only saving about $30,000 per decade for what sounds like a lot of work to most people, I consider this to be the biggest win because I enjoy living in “MMM’s Energy Efficiency Playground” so much.
6) Local Living over Constant Travel
This little lake right behind my house is a great daily “vacation” which allows me to savor home life more and travel a bit less.
“Hey, we’re having a big back yard pool party next weekend to celebrate Amy’s graduation from kindergarten, can you make it?”
“OH NOOOO!!! We will be off in at Disneyland that whole week! We planned the trip months ago, I wish we could make it!
As I type this in the height of the summer season, I really feel this effect at its fullest: almost all of my friends are off on trips, and my guest suite here at home is almost constantly full. People are traveling a lot, and many of them sound like they wish they could spend a few more of their precious summer weeks and weekends at home.
I’ll let you in on a little secret: you can! The trick is saying, “no thanks” more often to plans that involve you being away, and “yes please” to things that let you stay at home. The benefits are numerous:
You nurture your local friendships more and meet new people who live nearby
You spend way less money on plane tickets, hotels, restaurants gasoline, and car repairs
Your levels of health and fitness can go way up because you aren’t missing workouts and spending hours sitting in plane and car and bus seats. And you can better control your meals – more salads with grilled salmon, less McDonald’s and Pizza Hut
You sleep better
And you have more time to take care of projects around your house where you learn more skills which compound for life
Estimated Savings: Even if you replace just two weeks of travel for a family of four, with equivalent time at home you might save $5,000 per year in direct costs and a further $5,000 per year in incidental benefits like the health and local friendships. This would work out to a shocking $143,000 per decade of wealth increase!
Of course, travel is generally a good thing for broadening the life experience of you and your kids. It’s worth spending on, lavishly at times. But the key is to balance it out and be discerning, keeping the most enriching trips and pruning a few off the bottom of the list. And remembering that home time is valuable and healthy too.
And Whoa! We’ve already built up a huge list and I feel like I was just getting started.
Cutting a friend’s hair at a group event: entertainment, education and free haircut in one!
Taken all together, we’ve already detailed things that compound to $656,000 every decade, which already more than double the median wealth that most American seniors have as they cruise nervously into their retirement years – after over 40 years of work!
And now that I’ve been writing this blog for over ten years myself, I can safely say that over $656,000 of even my most recent worth increases are directly attributable to these simple habits. The same ones many of us have been enjoying and preaching about all along, both before and after our retirement dates.
If money is in genuinely short supply, you could go a lot further than the examples in this article. And indeed, there’s a lot more laid out in this blog or the MMM Boot Camp email series.
But one of the points of Mustachianism is that you usually don’t have to try all that hard. Just tweaking your lifestyle to be slightly less ridiculous and more efficient than average is usually all it takes.
—
In the comments: what are your quirks and frugal indulgences? The things you do now to save money, or things you still do even after it’s no longer about the money? I often wonder how widespread this frugality-just-for-fun is. But since we Humans are a naturally curious and problem solving species in our natural state, I suspect there are many more of us out there.
Some things to look for are what are known as “horizontals”. These are structural amenities local to the site of the planned build such as paved roads, power lines, and water lines. These prospects can look like an undeveloped lot in an existing suburban neighborhood, or what is known as an “In-fill” in more Urban … [Read more…]
Shopping for solar panels can be confusing, especially when trying to compare solar panel quotes. Solar panels are a big purchase ($23,885 on average, before tax credits), and one that will be with you for a long time. These seven steps can make comparing solar panel quotes easier.
1. Really know how much electricity you need
Solar installers might base their quotes on a measure of your average electricity use, but in the real world, your electricity needs are likely to fluctuate from month to month.
Look at your electric bill history, usually available online at your utility’s website. If your gas bill is combined with your electric bill, look at the portion of your bill that’s for electricity.
2. Review system sizes and designs
Sizing a solar system can be part science and part art, and solar companies are unlikely to arrive at exactly the same system size or number of solar panels for your home. For each quote, verify whether the estimated electricity production from your system meets or exceeds your monthly electricity needs. If system sizes vary widely in the quotes, ask the contractors about their sizing assumptions.
Do the quotes assume the same amount of available roof space?
Do the quotes assume you need to power an electric vehicle or heat pump heaters? You might want to size your system a bit larger now if you think you’ll need more panels later.
Do the quotes assume you will generate extra power to sell back to the grid?
🤓Nerdy Tip
If your utility’s net metering export credit is low for unused electricity you send back to the grid, your savings could be less if your solar system is too large.
Also, pay attention to the system designs. Consider where the contractors propose placing the panels on your roof as well as locating the conduit to them. You’ll be looking at your solar system for a while.
3. Find each quote’s cost per watt
The main thing to compare on solar quotes is the cost per watt. Don’t compare the total costs, because solar contractors are likely to propose slightly different sizes and financing options for your system. To compare apples to apples, compare the cash purchase cost per watt.
Fortunately, this is simple to do:
First, find the cash price for each quote. Solar quotes can be full of loans, leases, tax incentives and rebates. Focus on the cash price before incentives.
Next, determine the cost per watt. To find the cost per watt, divide the total preincentives cash price by the proposed system size. For example, if the quote’s preincentives cash price is $35,000 and the proposed system size is 11 kilowatts (kW) or 11,000 watts, you’ll divide $35,000 by 11,000 to get the cost per watt: $3.18.
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4. Look at the fine print on the financing options
There are four main ways to get solar:
Buy a system for cash.
Get a loan to buy the system.
Lease the system instead of buying it.
Get a power purchase agreement (PPA) instead of leasing or buying.
Not all contractors offer all of these options, and the terms will vary. If you’re opting for these, you’ll want to compare the terms:
Loans: There are various types of loans you can use to pay for a solar system. If the installer is offering to help you get a loan, find out who the lender is (often it’s a third party working with the installer). Be sure to compare each lender’s interest rates, monthly payments, repayment terms and fees.
Leases and PPAs: In addition to comparing the monthly payments for leases and PPAs, see if your quotes include escalators, which act as scheduled increases in your monthly payment each year.
5. Compare the panel efficiency scores
Installers sell different brands of solar panels. Find out the exact makes and models in the quotes, because some solar panels are more efficient than others. The more efficient the solar panel, the less roof space it will take to generate the electricity you need. If you have ample roof space, you may not need to consider efficiency, so you can save money by getting less-efficient panels, which are cheaper. If your roof space is limited, it may make sense to spend a bit more.
6. Check to see which kind of inverter the installer is quoting
The inverter converts the sun’s rays from direct current (DC) to alternating current (AC) power that your home can use. Solar installers offer four main types of inverters.
String inverters, which connect multiple panels, are the cheapest type and they offer the simplest maintenance. They aren’t as shade tolerant, so they’re best if your roof has full sun all day.
Microinverters, which attach to each panel, are generally more expensive than string inverters. They are a good option if you have any shading because if one or two panels are shaded at any time, the other panels will continue producing.
Power optimizers, which give a string inverter system a boost, are installed on the back of every solar panel. Adding expense to a string inverter system but cheaper than microinverters, they can provide a happy medium.
Hybrid inverters, also more expensive than string inverters, convert and draw energy from a solar system and a battery and may be programmable, providing more operating options.
7. Compare the warranties
They’re not all the same. To ensure that the equipment in your system continues working as it should, compare the warranties in solar quotes.
Product warranties, which protect against manufacturer defects, typically offer 10 to 25 years of protection.
Power warranties or guarantees, which guarantee that your solar panels will maintain a specified percentage of electric power production during the warranty period, often run for 25 years.
Workmanship warranties, which protect against damage during the installation process (especially to your roof), may cover five to 25 years.
Getting help
Frequently asked questions
How can I tell how much solar will fit on my roof?
The PV Watts Calculator from the National Renewable Energy Laboratory can estimate how much solar will fit on your roof and how much electricity the system will produce each year. First, determine your total electricity consumption for the year by adding your kWh consumption from your last 12 electric bills. Then, compare that with the annual kWh production estimate from PV Watts.
Should I compare estimates of how much energy or money I’ll save?
Solar installers will provide estimates in their quotes of how much energy your solar system will generate and how much money you’ll save. These are based on the number and efficiency of the panels in their design, but they also rely on assumptions like weather patterns and future electricity rates.
Because of that, it’s not very useful to compare projections for system performance or savings. If the proposed systems are the same size and use panels with the same watt capacity, you can expect to generate about the same amount from each .
Should I pick the contractor with the lowest bid?
The lowest price isn’t always the best. Consider the other factors covered in this article, such as the financing terms, the equipment and the warranties. If your solar quotes vary widely, ask the contractors to explain the difference.
Create unforgettable spaces with the best interior design software. Whether you’re a professional interior designer or a home design enthusiast, these are the top tools for bringing 2D and 3D spaces to life.
Our expert team of reviewers have tested the best architecture software or the best 3D modeling software, so we know what you want to check out when choosing your next interior design app, and which ones really measure up.
best landscape design software for crafting eye-catching exterior spaces.
The best interior design software of 2024 in full:
Why you can trust TechRadar
We spend hours testing every product or service we review, so you can be sure you’re buying the best. Find out more about how we test.
Below you’ll find full write-ups for each of the entries on our best interior design software list. We’ve tested each one extensively, so you can be sure that our recommendations can be trusted.
The best interior design software overall
(Image credit: Floorplanner)
Best interior design software overall
Specifications
Operating system: Browser
Plan: Free, Subscription
Reasons to buy
+
Free plan available
+
Intuitive and easy to use
+
Broad use from interior designers to real estate
+
Numerous customization options
Reasons to avoid
–
Some limitations with the free account
–
No desktop app
Floorplanner is an online interior design app for individuals and companies, letting you redesign everything from a single room to an entire floor, or even a whole building. You can also plan out how your furniture will fit in your new home.
This is a web-based home interior design tool, so you can achieve dazzling designs through the browser. There’s also online collaboration for editing and presenting projects in the cloud.
In our hands-on review, we felt the best home design software “is an excellent online service, designed to help you create rooms and furnish them with great accuracy. Working with it is fluid and easy, and we didn’t observe any discernible glitches. The fact there’s a free option means many amateur designer will happily use it to configure a room, but there are limitations to that option.”
Working in Floorplanner is fluid and simple – allowing you to create and furnish rooms with real accuracy. Best of all, if your needs are modest, using the program is free.
That makes it ideal for amateur designers or those learning the art of interior design. If you find the free account too limiting, there are several subscription options available to you. Business pricing starts at $59 a month for teams. Individual pricing starts at $5. You’ll also find a credit system. As you earn credits, you can unlock extra features not typically associated with your plan.
It’s all browser-based designing, however, so needs a constant inter connection. There is an Android app available, but this is designed for presenting designs created on the website.
Read our full Floorplanner review.
The best interior design software for architects
(Image credit: Chief Architect)
Best interior design software for architecture
Specifications
Operating system: Windows, macOS
Plan: Subscription, Perpetual license
Reasons to buy
+
Easy to learn
+
Multi-platform
+
Limitless possibilities
Reasons to avoid
–
Can appear daunting at first
–
3D views don’t always respond as expected
Home Designer Suite delivers professional-style interior design software – which makes it powerful but also increases the learning curve. It’s not too steep as to be unnavigable, although it might overwhelm first-timers. Stick with it.
If you’re looking for meticulous planning, precise editing and customizing tools, and everything else, right down to the material required for specific jobs, this is the best interior design software for you.
We praised the home design software in our review for its “highly detailed customisation options while at the same time, automating many processes to ease the creation process. It’s a great balance that help you create detailed environments quickly and easily.”
The interior design program is very full featured. You have full control over pretty much everything, including landscaping your dream garden. Despite its apparent complexity, there are many automatic tools that do a lot of the work for you, enabling you to focus on the details, to turn a design into a house.
Available for both Mac and Windows, you have in your digital hands everything you need to build the home of your dreams.
Read our full Home Designer Suite review.
The best interior design software for indoor/outdoor spaces
(Image credit: NCH Software)
Best interior design software for indoor and outdoor spaces
Specifications
Operating system: Windows, Mac
Plan: Subscription, Perpetual license
Reasons to buy
+
Easy to use
+
Multi-platform
+
Work on multiple levels
+
Can easily import 3D objects
Reasons to avoid
–
Not all objects installed initially
–
Occasionally awkward navigation
DreamPlan is the best home design software if you want powerful tools and simplicity of use.
The interior design program, out for Windows and Mac, helps you create buildings on multiple levels, furnish them with a library of 3D models, and customize homes inside and out. Yes, that even includes landscape design. It’s built to let you easily make modifications and alterations.
But, in our review, what we really liked about one of the best home design software tools is that it’s “designed to make it easy to make modifications, and even goes out of its way to help you understand the app’s inner workings.”
Trace Mode will be especially handy for those with existing floorplans. These can be imported into the home design software and turned into a 3D model.
DreamPlan features commercial and home licensing options – priced at $50 and $40 respectively, but check for regular discounts. So, it has a powerful enough toolset to use on a professional basis. But it’s intuitive enough for beginners.
For those just starting out with the best interior design software, the built-in video tutorials help you understand the inner workings of the app – just look for the subtle blue camera icon.
Read our full DreamPlan review.
The best browser-based interior design software
(Image credit: Dassault Systemes)
The best interior design app when you’re on-the-go
Specifications
Operating system: Browser, Android, iOS
Plan: Free, Subscription
Reasons to buy
+
Simple to use
+
Huge customisation
+
Can design an entire house for free
Reasons to avoid
–
3D pan can make some objects temporarily disappear
–
Long rendering times for low res photorealistic images
HomeByMe is one of the best interior design apps for when the ideas are racing. It’s browser-based – even mobile browsers are supported – and has Android and iOS apps, so you can map out thoughts for your home whenever and wherever inspiration strikes.
Since the interior design tool is cloud-only, you’ll need to stay connected to use it. During our time with the home design software, we were impressed that “HomeByMe offers a very affordable service with a myriad of options. We particularly appreciated the fact that the free plan doesn’t appear to limit your design options, and lets you work on up to three different projects.”
However, we were less impressed with the time it took to render low-res images. Worse, we found the free account pastes a giant watermark all across the image, rendering the effect pointless. HD images are rendered in minutes, and don’t have that watermark.
The platform offers three packages: free, one-time purchase, and monthly subscription. It’s a good way to see which works for you, as the free plan doesn’t appear to limit your design options, and lets you work on up to five projects.
The limit on the number of HD photorealistic images (1920x1080px) is somewhat compensated by offering an unlimited number of lower quality ones (640x360px). You can also place real-world, branded products in your rooms for extra realism.
HomeByMe has a lot to offer. If you’re not too fussed about those images, you can explore and create very complex designs with ease.
Read our full HomeByMe review.
The best interior design software for mobile
(Image credit: MagicPlan)
Best interior design software for Android and iOS
Specifications
Operating system: Browser, Android, iOS
Plan: Subscription
Reasons to buy
+
Easy to use
+
Free mobile app
+
Two free projects
+
Professional Report and Estimate tools
Reasons to avoid
–
AR appears to struggle when furniture is in the way
–
No desktop app
MagicPlan is one of the best interior software kits for busy creatives and contractors.
When we reviewed the home design app, we liked its “easy to use features, an interesting AR option, and an original way of generating estimates for work needed to be done. The monthly subscriptions could pay for themselves if designing if your business, and it also offers you two free projects for casual users to explore as well.”
Like HomeByMe, it lets you build designs from your browser, or within the Android and iOS apps. The free solution lets you design two projects. A monthly subscription is needed to unlock MagicPlan’s full capabilities.
You’ll find three tools in one: Sketch, Report, and Estimate. Essentially, tiered subscription packages that offer additional features.
Sketch lets you create interior designs – and, for home users, that’s likely enough. Professional designers will appreciate the inclusion of reporting and estimating tools. Enterprise licensing is also available.
One of the best interior design software tools here is the AR-enabled ‘Scan with Camera’. This lets you scan and measure the room you’re in – although we suspect this augmented reality feature would function a lot better in an unfurnished space.
Read our full MagicPlan review.
Best interior design software: FAQs
What is interior design software?
best 3D printers.
Time is a considerable factor. Even some of the best interior design software takes a long time to render concepts, especially when using photorealistic images. It’s a natural price to pay for high-resolution 3D designs. For some, speed may trump quality.
Check the system requirements for the software In certain cases, highly professional interior design computer programs require high-performance computers. In this case, you may need a machine comparable to the best laptops for architecture students or the best laptops for engineering students. These are build to smoothly run complex CAD designs.
Check the price (and pricing model), too. Some options, like HomeByMe, offer free, paid-for, and subscription versions of its home design software. Others offer only one pricing model, so choose the one that best suits your creative budget.
How we test the best interior design software
We’ve tested a massive range of creative apps, including the best digital art and drawing software and the best graphic design software. But whether we’re testing out the top tools for 3D design or the best software for interior decorating, we follow the same fair and rigorous review process.
When testing the best interior design software for homes, we’re looking to see how easy the experience is, how powerful the tools are, and how well the software performs. Designing in 3D can often take its toll on computers, after all.
Asset library sizes are a factor — interior design tools should make your creative ideas a reality, not just a loose approximation. We’re also reviewing these design apps based on use. Unlike consumer software, professional-grade tools offer more advanced features, but might also have steeper learning curves and more expensive pricing models. So, we assessed how well the interior design program delivers for its intended market – whether they’re professionals or personal users.
Essentially, when we test the very best interior design software for ourselves, we expect to see it work for its intended audience — whether they’re professional interior designers or creative enthusiasts.
During our tests across the best home design software tools, we first set up an account with the relevant software platform, whether as a download or online service. We then tested each app using a handful of files to see how the software for interior design could be used for creating indoor spaces from scratch, bearing in mind issues such as ease-of-use, professional viability, and performance.
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Job creation slowed in June, despite continued tight labor market conditions, which economists say is good news for the Federal Reserve. Data from the U.S. Bureau of Labor Statistics released on Friday shows that total nonfarm payroll rose by 206,000 jobs in June, compared to 272,000 jobs in May.
Job gains in June were most notable in industries like government (70,000), health care (49,000), social assistance (34,000) and construction (27,000), a positive for the housing industry.
When broken out, the residential construction sector added 3,100 jobs month over month, while the number of residential specialty trade contractors rose 2,400 from a month prior. Overall, for the past year, the construction sector has added an average of 20,000 jobs per month.
The real estate and rental and leasing services sector added 1,100 jobs from May with real estate posting a 500-job gain and the rental and leasing sector gaining 800 jobs.
Despite the continuing job growth, unemployment rose slightly from May to 4.1% in June, with 6.8 million people unemployed. A year ago, the unemployment rate was 3.6% with 6 million people unemployed.
While economists noted that the month’s job gains were higher than anticipated, they highlighted that most of the jobs were in the government sector.
“Similar to May, the headline gain in nonfarm payroll employment data in June does not tell the entire story,” Mike Fratantoni, the MBA’s senior vice president and chief economist, said in a statement. “While the headline gain showed an increase of 206,000 jobs, more than one-third of that was a gain in government employment, largely a function of increases in state and local jobs. Although June’s increase was above our expectations, both April and May figures were revised down by a combined 111,000 jobs, marking the three-month average down to a 177,000 increase.”
Fratantoni also highlighted the rise in unemployment as an indicator that the job market was slowing.
Although a cooling economy is what the Federal Reserve wants to see, economist believe this jobs report does not guarantee an interest rate cut.
“This not-too-cold/not-too-hot Goldilocks economy is what we want to see as the Federal Reserve will deliberate on the timing of interest rate cuts in the second half of 2024. In addition to today’s report, the Fed is watching a range of other economic indicators, most notably inflation,” Lisa Sturtevant, the chief economist at Bright MLS, said in a statement. “The first June inflation reading will be out next week. Lower inflation and a looser labor market means it is more likely for there to be two rate cuts instead of one in 2024.”
If the Fed does cut interest rates, Sturtevant believes housing market activity will pick up as many buyers have been waiting on the sidelines hoping for lower rates.
Paywatch, an earned wage access (EWA) service provider, has secured USD 30 million from a mix of equity and credit facilities to bolster its growth.
Paywatch received over USD 14 million in Series A funding, in a round co-led by Third Prime and a consortium of US investors, including Vanderbilt University and University of Illinois Foundation, with participation from new investors Octagon Venture Partners and Wooshin Venture Investment. Additionally, Paywatch secured USD 16 million in credit facilities from global banks, including Citi, to fund its product expansion. This is the largest funding round closed by an EWA player in Southeast Asia.
Paywatch offers a debt-free EWA solution that allows workers to instantly access a part of their accumulated salary in real time. The company said this service decreases employees’ dependence on loans, alleviates household debt, and enhances financial management while boosting companies’ employee retention and productivity. Lotus, Jaya Grocer, and QSR Brands are among the brands to have partnered with Paywatch, collectively supporting the region’s financial well-being and economic growth.
Ai Palette snags USD 1.45 Million in Series A1 funding from InnoVen Capital
Ai Palette, a Singapore-headquartered tech startup specializing in using artificial intelligence and machine learning to enable consumer packaged goods (CPG) companies in product creation, has snagged an additional USD 1.45 million in its Series A1 funding round from InnoVen Capital.
The funds will deepen Ai Palette’s generative AI product stack for the CPG sector and strengthen its presence in the Americas.
According to Ai Palette, its platform utilizes advanced AI technologies, including text analytics, natural language processing, image recognition, predictive analytics, and reinforcement learning, to help brands track real-time trends, predict market changes, and quickly adapt. The company is said to specialize in aiding concept generation, portfolio optimization, localization, and credibility enhancement.
Photo of Himanshu Upreti (left) and Somsubhra GanChoudhuri, co-founders of Ai Palette. Photo from KrASIA’s archive.
Blibli operator acquires Dekoruma for IDR 1.16 trillion
PT Global Digital Niaga, which operates the e-commerce player Blibli, online travel agency Tiket.com, and supermarket chain Ranch Market, has acquired a 99.83% stake in the home decor startup Dekoruma for IDR 1.16 trillion (USD 70.7 million) with the backing of the local conglomerate Djarum Group.
Completed on June 20, this acquisition is expected to bolster Blibli’s home and living vertical and enable an integrated approach to online and offline trade. Dekoruma, established in 2015, connects consumers with home furnishing merchants, interior designers, contractors, and property developers. It has ostensibly served over one million customers and partnered with more than 5,000 designers and contractors. —DealStreetAsia
Okapi Technologies closes funding round and launches in Malaysia
Okapi Technologies, a fintech startup in the solar financing space, has closed its funding round and officially launched in Malaysia, starting with the residential solar vertical. The round was led by The Radical Fund with participation from angel investors including Lai Chang Wen and Shaun Chong, co-founders of regional logistics unicorn Ninja Van.
The funds will be used to develop solutions to democratize access to affordable solar energy and create a new asset class for environmental, social, and governance (ESG) investors globally. —TechNode Global
Carro secures SGD 75 million loan from HSBC
Carro, a Singapore-based used car marketplace, has signed a SGD 75 million (USD 55.4 million) multicurrency loan with HSBC to fund its fintech arm, Genie Financial Services.
Genie Financial Services currently operates in Singapore, Malaysia, Indonesia, and Thailand, leveraging data-driven lending to support its customers.
Carro is said to be the first client to tap into HSBC’s recently launched USD 1 billion ASEAN Growth Fund. —TechNode Global
Photo of Carro’s team in 2021. Photo from KrASIA’s archive.
Zepto bags USD 665 million at multibillion valuation
Zepto, an Indian quick commerce platform specializing in grocery deliveries, has raised USD 665 million in an investment round, increasing its valuation to USD 3.6 billion. The round saw participation from Avenir Growth Capital, Lightspeed Venture Partners, and Avra Capital.
Zepto, competing with Zomato’s Blinkit and Swiggy’s Instamart, plans to use the funds to double its dark stores to over 700 by March 2025. —Reuters
Recent deals completed in China:
Metis Pharmaceuticals, a biotechnology company, has raised USD 100 million in a Series C funding round. The round was led by CICC Capital, with participation from the Taiping HK I&T Fund under China Taiping Insurance Holdings. The funds will be used to advance the development of its AI-driven drug delivery platform and proprietary pipeline, supporting ongoing innovations in the drug delivery sector. Established in 2020, Metis focuses on leveraging AI for precise targeted drug delivery and drug discovery, aiming to develop innovative nanomaterials. —36Kr
TalentSec, a Shanghai-based cybersecurity firm, has raised tens of millions of RMB in a Series A funding round. The round was led by Eminence Ventures, with participation from existing investor Shunwei Capital and financial advisory by Cipher Capital. The new funds will be used to strengthen the company’s product capabilities and core competitiveness by creating value for more customers. Since its establishment in 2020, TalentSec has been specializing in solutions combining altered state machine (ASM) and AI technology. —36Kr
Tengyu Technology, a real-time interactive cloud service provider, has raised an undisclosed amount in a Series B funding round jointly led by Sealand Innovation and Fosun RZ Capital. The round also saw participation from Cornerstone Venture Capital, Zhongxiang Venture Capital, Guolian Shixun Information Technology, SCCI, 37 Interactive Entertainment, and Jiangxin Investment, with I&R Capital acting as the sole financial advisor. The funds will be used to further develop its solutions. —36Kr
Homa2u, Robo Co-op, VITG, and more led last Friday’s headlines:
Homa2u, a Malaysian platform for overstocked renovation and interior design materials, secured an additional USD 625,000 in its pre-Series A funding round from Asia Fund X (AFX), which is backed by MSW Ventures and Pavilion Capital.
Robo Co-op, a social enterprise focused on empowering refugees through digital learning, received a USD 700,000 investment from Ritsumeikan University’s Social Impact Fund (RSIF).
Virtual IT Group (VITG), an Australian IT services provider, signed a definitive agreement to secure investment from global mid-market private equity firm The Riverside Company. The financial details of this deal were not disclosed.
If there are any news or updates you’d like us to feature, get in touch with us at: [email protected].
Victor Ciardelli beamed as his mortgage company, Chicago-based Guaranteed Rate, launched a “financial wellness” and “personal well-being” app last fall before a live audience in Times Square with wellness celebrity Deepak Chopra.
“Something we are passionate about at Guaranteed Rate is caring about people and their overall well-being,” Ciardelli said in a video of the event posted online. “We wanted to make sure that we did something to help people in their general stress and alleviate pain.”
But in the days following the launch of the app, which offers home loan applications and other financial services alongside yoga classes and nutrition advice, Ciardelli wasn’t happy. Yelling at executive leadership on company calls, he referred to his employees as “failures,” complained that the team did not show him from a particular camera angle and said “Marketing is a f−−−ing disaster,” according to two executives who were on the calls.
Despite Ciardelli’s public remarks on the importance of personal well-being, many former employees told the Tribune they experienced or witnessed persistent verbal abuse and a misogynistic environment while working at Guaranteed Rate. As part of a Tribune investigation, reporters interviewed nearly 80 former employees and reviewed court records, internal company emails, written exit interviews and text messages.
Many of the former staff members who spoke with the Tribune described Ciardelli, the company’s president, CEO and founder, as a boss who was quick to berate, swear at and demean employees.
“Every person that works directly under Mr. Ciardelli is terrified of his potential anger outbursts,” one former assistant wrote to human resources after she was let go from the company a couple of years ago, according to an email reviewed by the Tribune.
Some former employees who spoke with the Tribune said they were driven to seek mental health care because of the work environment at the company; one former worker said she contacted a suicide hotline last year.
Multiple women who used to work at Guaranteed Rate, meanwhile, described working in a sexualized atmosphere where some male loan officers and managers made sexually explicit remarks to female employees, hit on them in the office or at work events, and commented inappropriately on their appearance — even, in one case, encouraging a woman to use her looks to help close a loan.
In February, a woman who used to work as a loan officer at Guaranteed Rate filed a lawsuit against two high-producing loan officers at the company, alleging sexual harassment and gender discrimination. Her complaint alleges one of the male loan officers sexually harassed her at a corporate event, that the other loan officer pressured her not to report the incident to human resources, and that for the remainder of her employment the man who made the remark used “gender-based and demeaning slurs to refer to” her and other women at the company.
Other former employees said they did not bring their complaints to human resources because they thought Ciardelli or other executives and managers meddled in the department’s business and might retaliate, with at least two former employees saying they’d observed how company leaders protected certain staff members. Others said they did complain but felt the department didn’t take the information seriously.
In response to a detailed list of questions from the Tribune, Ciardelli and Guaranteed Rate vehemently denied all of these allegations, describing the company as a positive workplace environment where women in particular are supported. The firm went to remarkable lengths to dispute the allegations, including sending the results of a worker satisfaction survey it conducted and forwarding more than 80 testimonials from current and former employees. Among them were five of Ciardelli’s current or former assistants, as well as numerous male and female executives praising his leadership and support.
The company also retained an outside law firm that, even before receiving the reporters’ list of questions, threatened to sue the newspaper for defamation.
Guaranteed Rate, whose corporate headquarters is in Chicago’s North Center neighborhood, has grown tremendously since its founding in 2000 to become one of the largest mortgage lenders in the country based on loan volume, according to industry news and data provider Inside Mortgage Finance. Its name has adorned the White Sox stadium since 2016, and as recently as 2018, Guaranteed Rate was named a Chicago Tribune Top Workplace — a distinction based on surveys conducted by an outside company, with no input from editorial staff on the selection.
Guaranteed Rate CEO Victor Ciardelli prepares to throw out the ceremonial first pitch at a White Sox home game in August 2016. The ballpark would be renamed after his company later that year. (Chris Sweda/Chicago Tribune)
Jason Scott, a former top-producing loan officer and director of VA lending, which provides home loans to military veterans and active-duty service members, at Guaranteed Rate said his earlier years at the company — when lower mortgage rates fueled industry growth — were positive. But Ciardelli’s outbursts and verbal abuse of employees grew more noticeable, he said, when rising interest rates started to erode those gains, especially after the boom years of the COVID-19 pandemic.
“I think crazy success just brings out who the real people are,” said Scott, who reported to Ciardelli in his director role and now works for CrossCountry Mortgage, a competitor of Guaranteed Rate. “What did you sacrifice to get there? Did you sacrifice your soul or your core values?”
Many other former employees who spoke with the Tribune did so on the condition they would not be named in this story, saying they feared Guaranteed Rate would sue them. Guaranteed Rate has filed lawsuits against former employees to claw back signing bonuses; it also has sued competitor New American Funding and former employees who have hired former Guaranteed Rate workers, accusing them of unlawful poaching.
Ciardelli declined to be interviewed without his attorney for this story. In response to written questions provided by the Tribune, he and the company suggested the criticism of Guaranteed Rate came from disgruntled employees who could not succeed in a demanding work environment within a challenging industry, or from people who now work for a competitor and therefore would benefit from disparaging the company.
“We hold ourselves and our team members to an incredibly high standard and are not apologetic about that,” Ciardelli said in his written responses, sent through the outside law firm retained to handle communications with the Tribune. “We also recognize … that to achieve great success, one must embrace a full ownership for their actions, both successful and otherwise to achieve growth and most important optimally serve our customers. We promote a transparent culture that supports all our team members toward that goal and welcome constructive criticism. As a result, we are not for everyone.”
Ciardelli specifically denied berating staff, yelling at executives after the app launch or ever calling employees “stupid” or “failures.” He quoted the company’s chief operating officer, Nik Athanasiou, as saying: “I have worked with Victor for 15 years. No one is in more meetings with him than me. I do not ever recall an instance where Victor was abusive toward another employee.”
Ciardelli also pointed to the company’s anti-discrimination and anti-harassment policies and said neither he nor any other executive interfered with human resources.
In response to questions from the Tribune about women’s complaints, including being subjected to sexually explicit comments and working in a “boys club” atmosphere, Ciardelli wrote that such allegations are “simply not true.” The company “has not, does not, and would not objectify women or put them in uncomfortable personal or professional situations,” he wrote.
Ciardelli also highlighted the large number of female loan officers working at the company, their professional success and the testimonials from female employees. When the Tribune asked to speak with four of those women, only one — Rola Gurrieri, the company’s New Jersey-based chief fulfillment officer — agreed to be interviewed without outside counsel or management present.
Regarding the lawsuit filed by former Guaranteed Rate loan officer Megan McDermott, the company told the Tribune it had “found no evidence supporting Ms. McDermott’s allegations of sexual harassment or gender discrimination” after conducting a “comprehensive investigation.”
Guaranteed Rate also sent a general statement detailing the company’s business philosophy, which includes a “fierce commitment to excellence.” Employees who do not “meet our core values or our quality standards” find it challenging to maintain job satisfaction at the company, it said.
“Many of these employees walk away not feeling good about the company which is a natural emotion when faced with a reality that their standards and the company standards are not aligned,” the statement said.
But many of the former employees who spoke with the Tribune described a cutthroat work culture they said could be frightening and upsetting, with several attributing that culture to Ciardelli’s laser focus on making money and growing Guaranteed Rate.
A sign is installed at the White Sox stadium in October 2016 to proclaim its new name: Guaranteed Rate Field. (Zbigniew Bzdak/Chicago Tribune)
The former assistant who emailed human resources asked not to be identified in this story, fearing it might jeopardize her current job or trigger retaliation from Ciardelli. In that email, the woman wrote that she was “constantly on edge and terrified to have an interaction with Mr. Ciardelli” and that she had “consoled each assistant on his team that endured the wrath of Mr. Ciardelli’s behavior.”
“I hope that my experience will open your eyes,” she wrote.
Flying too close to the sun
In an interview with the Tribune in 2014, Ciardelli made plain his ambition to grow the company.
“If you can’t handle it, you shouldn’t be here,” Ciardelli said. “Instead of feeling like, oh, we care about people’s feelings and all that, it’s all about results.”
In the same article, Ciardelli said he worked constructively with his employees when issues arose at work. “There’s no drama involved; there’s no yelling,” he said. “Let’s fix the issue and move on.”
But multiple former executives and employees told the Tribune Ciardelli regularly yelled at and verbally attacked executives and other employees in person and on company calls, sometimes in front of hundreds of people, with the calls following the app launch just one example.
Some former and current employees told the Tribune they tried to avoid Ciardelli because they were scared of his temper.
Scott, the former director of VA lending who worked at Guaranteed Rate from 2017 until he resigned in 2022, splitting his time between offices in Hawaii and Colorado, called Ciardelli a “bully.”
Scott told the Tribune that, during one call, Ciardelli took an executive “to the woodshed and just eviscerated him verbally,” saying things such as “I can’t believe you are this stupid.”
“(Victor) throws the grenade and then he leaves the room,” not giving people a chance to explain or talk through the issue, Scott said.
At the time of Ciardelli’s 2014 Tribune interview, Guaranteed Rate had 2,500 employees nationally, 1,050 of whom were based in Chicago, according to Tribune archives.
The company grew to employ 9,708 people nationwide at its peak in 2021, Guaranteed Rate told the Tribune in May. Part of the company’s growth stemmed from its acquisitions of other mortgage companies: Manhattan Mortgage and Superior Mortgage in 2012 and Stearns Lending in 2021.
Victor Ciardelli, shown in 2014 at Guaranteed Rate’s headquarters, told the Tribune that year that he had ambitious plans for the company and “if you can’t handle it, you shouldn’t be here.” (Abel Uribe/Chicago Tribune)
Guaranteed Rate also partners on mortgage services with some of the largest real estate companies in the country. Including the people working in those partnerships, Guaranteed Rate had 14,264 employees at its height in 2021.
Like other mortgage companies, Guaranteed Rate has suffered a significant decline in business over the last two years, stemming from mortgage rates that have more than doubled from their record lows during the pandemic.
As mortgage rates soared in 2022 and 2023, the firm implemented thousands of layoffs, with only 3,871 workers remaining as of April, or 5,756 among all its companies, excluding contractors, as of May, according to the company.
Yet Ciardelli’s volatile behavior predated the stressful times in the housing market, according to some people who worked for Guaranteed Rate. Many people who “fly too close to the sun” — a metaphor some employees used to describe working directly with Ciardelli — eventually leave, they said.
People who work in personal and executive assistant roles for Ciardelli rarely last long in their jobs, with many leaving after less than a year, former employees said. Some referred to Ciardelli’s assistant position as a “revolving door,” and the LinkedIn profiles of multiple former assistants show short stints with the company.
More than two dozen executives and senior loan officers have left the company over the last decade, with a significant exodus occurring in the past two years. Multiple former executives and loan officers — including Scott — told the Tribune they left because of Ciardelli’s verbal outbursts and what many described as a workplace where they felt bullying and misogyny were tolerated. Most now work for competitors.
Ciardelli and other executives sometimes would disparage people who left the company, according to Scott.
“I would be like ‘Guys, did anybody ever think about reaching out to them before they left and having an exit interview with them?’” Scott said. “You are talking about a person that was a top producer here that you loved them as long as they produced, and now that they leave, they are an enemy? … They are leaving for a reason.”
In Ciardelli’s written responses to Tribune questions, he said allegations of a toxic work environment or bullying on his part are “not aligned with Guaranteed Rate or my leadership.” He said neither he nor other executives have disparaged former employees when they left the company.
In response to a question about assistant turnover, Ciardelli wrote that he has worked closely with five “primary” assistants since 2000. “As is the case with any demanding support roles, there has been some turnover with secondary and tertiary assistants, but nothing that is abnormal or unexpected,” he wrote.
One testimonial sent to the Tribune was from Melissa Czaszwicz, who said she worked for Ciardelli as an executive assistant in the early 2000s. She wrote that she had a positive experience working closely with Ciardelli, who she said was especially supportive when she had children.
“Never did I witness anything inappropriate or out of line,” said Czaszwicz, who still works at Guaranteed Rate.
‘Mental health has suffered’
Some former employees who spoke with the Tribune said they were driven to seek mental health support during and after their time at the company because of the negative work environment they experienced at Guaranteed Rate.
Most of those who shared their experiences worked for an executive who has a close working relationship with Ciardelli. Former workers said this executive also verbally abused staff and was prone to volatile mood swings.
One told the Tribune she texted and called a suicide hotline last year while working at the company because of verbal abuse from the executive; she shared the texts she sent with the Tribune.
In her resignation email, sent to the executive and to the human resources department last year, she wrote: “My mental health has rapidly declined due to the way I have been treated and spoken to in the last couple of months.”
Another employee from the same team wrote in a 2019 resignation letter sent to the executive, human resources, Ciardelli and others that his “mental health has suffered.”
Founded in 2000, Guaranteed Rate grew to become one of the largest mortgage lenders in the country but has suffered a decline in business as mortgage rates have soared in the last two years. (Brian Cassella/Chicago Tribune)
In the resignation email and in an interview with the Tribune, the former employee said his boss gave him the runaround when he asked for time off to attend his mother’s chemotherapy appointments and complained to other employees about his requests.
Other employees discouraged him from requesting leave directly from human resources, warning him he would be fired if he went around the executive, according to the email.
Alyssa Ortiz, another former employee, said working with this executive was like being in an “abusive” relationship, being yelled at one minute and being invited for drinks the next.
“Everyone has gotten … chewed out and left crying,” said Ortiz, who worked for Guaranteed Rate from 2017 to 2019.
Ortiz told the Tribune that human resources and Ciardelli had been notified of this executive’s verbal mistreatment of employees but did nothing. She and about a dozen other former employees told the Tribune they felt Ciardelli protected this executive because of their working relationship.
In a written exit interview from 2020, one employee from the same department described how the executive would discuss former employees’ exit interviews with current employees.
“This created a fear for us to go to HR for anything moving forward,” the employee wrote.
Ciardelli said the company was not aware of any incident in which an executive read former employees’ exit interviews aloud; he said Guaranteed Rate “would never support this practice.”
Dozens of employees have left the executive’s department since 2017, according to interviews with former workers and LinkedIn profiles. The executive has since been promoted, the executive’s LinkedIn profile and the company’s website show.
In 2018, the head of human resources at the time took away the HR representative working with the executive’s department because of “risks” the executive posed to the company, according to an email reviewed by the Tribune.
“I can’t in good conscience keep allowing (the executive) to drag other employee (sic) into … schemes,” the former HR head wrote. “And by schemes I mean risky bull−−−−.” The department would have no assigned human resources representative after that, according to the email.
In correspondence with the Tribune, Guaranteed Rate described the company as a positive workplace where abuse and harassment are not tolerated and where complaints to human resources are taken seriously.
“We are not perfect by any means, but we do work hard to listen to our employees and make sure they feel supported,” a company spokesperson wrote in an email to the Tribune in April. “Most of all, we have no tolerance for any form of bullying, harassment or mistreatment. It is not who we are or who we want to be.”
Some of the employee testimonials provided by Guaranteed Rate expressed similar sentiments. For example, Mohamed Tawy, a branch manager and senior loan officer who has been with Guaranteed Rate for three years, wrote that the culture at the company is the best he has experienced in his 15-year career.
In an interview with the Tribune, Tawy said: “As a top producer … and I’m also a minority myself, I haven’t felt anything or seen anything that makes this company in any way negative for anybody that’s different. … I’ve seen here all that matters is that you do a good job, your production is good and that you follow the protocols and the rules, and I’ve seen people succeed with that more than any company I’ve been with.”
The Guaranteed Rate spokesperson also shared the results of an employee experience survey conducted in February. According to the company, the average rating for the culture at Guaranteed Rate was 8.49 out of 10, with nearly 75% of 3,745 employees responding. Those ratings were based on employees’ stated level of comfort providing feedback and/or concerns, how much they felt supported by the company in maintaining a healthy work-life balance and their sense of Guaranteed Rate’s commitment to promoting diversity and inclusion.
The email from the spokesperson said the company received “a countless number of positive comments and appreciation for their leaders, teams and our overall culture.”
In response to Tribune questions, Guaranteed Rate said in May that the survey was anonymous and it was analyzed by its “employee experience team.” The company did not provide the Tribune with a complete set of responses from the survey, but it volunteered that employees used the word “toxic” to make a negative comment about Guaranteed Rate in only 14 of the more than 5,000 written responses provided to three open-ended survey questions.
‘Mortified and disgusted’
Megan McDermott, a single mother of three, met her supervisor at Guaranteed Rate, Jon Lamkin, in person for the first time at a corporate event in December 2015, according to the lawsuit she filed in February.
When Lamkin heard the age of her oldest child, the suit alleges, he said: “You should have known better than to let some guy’s d−−− c−−− inside you.”
According to her lawsuit, McDermott reported the comment to Joseph Moschella, a regional manager and senior loan officer at Guaranteed Rate who was responsible for McDermott’s region while she worked at the company. Moschella, the suit alleges, “pressured” her not to make a formal complaint of sexual harassment to human resources.
McDermott told the Tribune she was “mortified and disgusted” after Lamkin made the comment.
“The irony here is that Jon should have known better than to treat an employee the way he did rather than telling me I should have known better to become a single mother at 20 years old,” McDermott said, “which is vile. … He set the tone the first day I met him of the power Joe and Jon had over my career.”
Megan McDermott, shown in March in New Jersey, has filed a lawsuit alleging she was “subjected to a sexual and gender-based hostile work environment” at Guaranteed Rate and did not receive the same opportunities, treatment and pay as male loan officers. (Brian Cassella/Chicago Tribune)
As McDermott went on to become a top-producing loan officer for Guaranteed Rate in New Jersey, her suit alleges Lamkin subjected her to abuse by “regularly screaming at her and using gender-based and demeaning slurs to refer to” her and other women at the company.
Her lawsuit alleges she was “subjected to a sexual and gender-based hostile work environment” by Guaranteed Rate, Lamkin and Moschella. Her suit also alleges McDermott did not receive the same opportunities, treatment and pay as male loan officers, which some other female loan officers told the Tribune reflected their own experiences as well.
McDermott did not lodge a complaint after Lamkin’s comment because she “believed she would be retaliated against” if she did so, the suit states. When she did report to HR around 2019 that Lamkin had engaged in “abusive behavior,” the department “failed to do anything to investigate or curtail Defendant Lamkin’s behavior,” the complaint alleges.
“Joe encouraged me not to go to HR because of the damage it would do to Jon’s career,” McDermott said. “Ultimately, all that they were worried about was Jon, his reputation and his career versus reporting inappropriate behavior.”
Guaranteed Rate told the Tribune in its May response that Lamkin’s comment was “nothing more than a single off-color joke,” that McDermott accepted an apology from Lamkin and that Moschella “encouraged” McDermott to contact human resources if she was “still upset.”
The company said it “could not find any record of Ms. McDermott making any form of complaint to the company’s human resources department in 2019, either verbally or in writing.”
McDermott told the Tribune she helped build Guaranteed Rate’s business in north Jersey from the ground up and said she loved the work until she found out she was not being treated equally as a woman.
“I believe management did not want to see me succeed, didn’t take me seriously and made decisions that negatively affected me and my children financially,” said McDermott, who now works for CrossCountry Mortgage, a competitor. “I ultimately left GR because I could no longer work in an environment where I was not valued and leadership felt that they could exploit me.”
Moschella and Lamkin are still employed at Guaranteed Rate. They did not respond to a Tribune request for comment. Guaranteed Rate told the Tribune in May that it had investigated McDermott’s allegations of sexual harassment and gender discrimination and found that “there is no evidence that Mr. Lamkin or anyone else at Guaranteed Rate ever created a hostile work environment for women.”
Guaranteed Rate also said in a statement that it complies with state and federal equal pay laws. The company said an “outside law firm” had reviewed its 2023 pay data and found it compliant with state equal pay laws.
In his written responses, Ciardelli highlighted the high percentage of female loan officers at the company in comparison to its competitors and said “our women originators thrive more than at any mortgage company in the industry.”
Employee statements provided through Guaranteed Rate’s attorneys included testimonials from dozens of women. Some noted the existence of the company’s employee resource group for women, GROW, while others cited the presence of women in leadership roles throughout the company.
“In addition to my professional growth I’ve experienced, I am equally grateful for the respect and dignity with which I have been treated as a woman in the workplace,” Jaime Kinman, a senior loan officer, said in her statement. “In an industry where gender biases still exist, I have never once felt marginalized or overlooked because of my gender.”
Gurrieri, the company’s chief fulfillment officer, said in an interview with the Tribune that she “never one time” experienced misogyny at the company.
“I got promoted when I’m six months pregnant,” she said. “That’s unheard of.”
Gurrieri, who has worked for Guaranteed Rate for more than six years, described Ciardelli’s leadership style as “extremely passionate.”
“There’s never been a day where I ever felt disrespected or not appreciated,” she said.
According to a former top executive who reported to Ciardelli for many years and a former human resources employee, a handful of loan officers at Guaranteed Rate were known sexual harassers, making women feel uncomfortable with inappropriate touching and unwanted advances in work settings.
But that behavior was rarely addressed, the former workers believed, because the men were friends with Ciardelli or were high-producing loan officers — each responsible for bringing in tens of millions of dollars in loan volume. Some of these loan officers still work at Guaranteed Rate.
Ciardelli called these allegations “simply not true” and said they were contradicted by the employee testimonials provided through the company’s attorney.
“They are also inconsistent with the recollections and experiences of multiple former HR professionals,” Ciardelli wrote.
A ‘sex-driven’ culture
In interviews with the Tribune, multiple former employees described a “boys club” atmosphere at Guaranteed Rate; Scott, the former director of VA lending, said there was “a lot of misogyny.”
Jessica Moreno, a former Chicago employee who started at Guaranteed Rate at age 23, said she was the first in her family to get a corporate job. Within a year of starting her job, she said, she was paying the mortgage on her family home.
But in her department, Moreno said she experienced a “sex-driven” culture.
“All the guys were just like, tongues on the floor,” said Moreno, who worked for the company for about four years starting in 2014. Her workplace was “like a men’s locker room, and women were in it,” she said.
Jessica Moreno, shown in April in Arizona, worked for Guaranteed Rate for about four years starting in 2014. She said male co-workers and managers hit on her and made comments on her appearance. It was “like a men’s locker room, and women were in it,” she said. (Brian Cassella/Chicago Tribune)
Male co-workers and managers would hit on her and make comments on her appearance, calling her pretty, Moreno said. Comments made at Christmas parties or happy hours could be crasser, she said.
“You’ll get, ‘Oh, I’ve always wanted to f−−− you,’” she said.
Moreno said she once overheard a male manager describe a woman who had interviewed for a job as a “fox.” Another time, she said, a manager invited a female massage therapist to the office; Moreno remembers male co-workers commenting on the therapist’s body, too.
Soon after she’d started at Guaranteed Rate, Moreno said, she met with HR to make a complaint about a manager who swore at and belittled her. The HR representative brushed off her concerns in that meeting, she said.
“After that, I felt so discouraged to never even speak up again,” Moreno said.
Moreno ended up leaving her position before taking a job working for a Guaranteed Rate loan officer; she said she was terminated after clashing with the loan officer’s assistant.
Some female former employees of Guaranteed Rate said they understood looks to be a currency within the company.
One former Chicago employee said a manager encouraged her to text a selfie to a client after hearing the client flirt with her over the phone and say he’d be inclined to speed up the loan process if he knew what she looked like.
The employee said she sent the selfie, and the manager then pushed her to go along with the client’s harassment until the loan closed, she said.
After receiving the photo, the client responded, “As pretty as you are I can’t believe some man hasn’t run off with you just howling away,” in a text reviewed by the Tribune. Later on, after sending her forms, the client texted her: “You said I would get another pic when I sent you the forms so?”
The employee said another manager in her division would frequently flirt with her and comment on her appearance. He once texted her to “stop losing weight damn it” and another time texted her that she “broke (his) concentration,” according to texts reviewed by the Tribune.
Another former Chicago employee remembered a manager telling her, while she was pregnant with her first child, “Whatever you do, don’t get a C-section — you’ll never wear a bikini again.” The employee went out on maternity leave days later. She said she did end up needing a C-section and remembers the manager’s comment echoing in her head as she was wheeled back for surgery. Two people the woman told about the incident at the time corroborated her account in interviews with the Tribune.
Several former employees in the marketing department, including two men, told the Tribune Ciardelli made comments about workers’ ages. One employee got Botox and fillers after Ciardelli told employees they were “too old” and likened the marketing department to his “grandmother’s mortgage company,” according to former marketing department employees.
In his written responses, Ciardelli said “Guaranteed Rate is committed to fostering an environment that promotes diversity, equity, inclusion, and accessibility. We maintain a comprehensive set of employment policies aimed at providing a work environment free of unlawful harassment and discrimination, where all employees treat one another with dignity and respect.”
Guaranteed Rate’s corporate headquarters is in Chicago’s North Center neighborhood in a building with a rooftop gathering space. (Brian Cassella/Chicago Tribune)
A spokesperson said in the April 1 email sharing the employee survey results that the company had launched “even more initiatives to ensure we have a positive work environment,” including anti-harassment training, training for the human resources team “to take proper and appropriate steps and best practices for investigating and responding to employee complaints” and reminders to employees on how to report harassment or abuse.
“Our executive team has emphasized to Human Resources that all complaints should be investigated, and any form of harassment and misconduct should be dealt with swiftly – and all managers and employees who are not acting in accordance with our values be rooted out of our organization,” the spokesperson wrote.
In the company’s May responses, it said these initiatives were launched in 2023 and were to “expand and enhance” the existing training program.
All Guaranteed Rate employees must complete “harassment and discrimination prevention training” upon being hired and on an annual basis thereafter, according to the company’s May response. The company said Guaranteed Rate has an “anti-retaliation” policy that prohibits retaliation against employees who report alleged harassment or discrimination or participate in an investigation into the conduct. The company also noted it has an ethics hotline through which employees can make anonymous complaints.
“We respect and treat all employees equally no matter their sex, color, or creed,” Ciardelli wrote.
In the last 10 years, Guaranteed Rate has not settled any lawsuits involving claims of a hostile work environment, according to the company. Guaranteed Rate’s response stated that within that time frame, the company settled six claims involving allegations of a hostile work environment, including arbitration cases as well as claims filed with the Equal Employment Opportunity Commission and state and local agencies. The majority of those claims were brought by male employees, and one was resolved in Guaranteed Rate’s favor, the company said.
Guaranteed Rate employees are asked to sign mandatory arbitration agreements when they are hired, but sexual harassment claims and claims filed with the EEOC and similar state agencies are not subject to arbitration, according to Guaranteed Rate’s May responses.
‘Positive thinking’
Publicly, Ciardelli presents himself as a champion of a positive work environment — an image the company has encouraged employees to promote.
In an email sent in February by a company executive and obtained by the Tribune, employees were encouraged to share a Forbes article featuring Ciardelli; the email provided step-by-step instructions for posting it on social media.
The story, published Feb. 7, was titled “Guaranteed Rate Founder Is All In On ‘Positive Thinking’ This 2024” and described his leadership style as “Chicken Soup for the Mortgage Industry.”
“I communicate the power of positivity and gratitude to everybody around me: employees, friends, family members, everyone,” Ciardelli was quoted as saying.
Less than 24 hours after it went live, the article disappeared from the Forbes website. The site provided no explanation, but one former Guaranteed Rate employee told the Tribune former workers had written to the author about factual inaccuracies.
On Feb. 8, a Guaranteed Rate executive sent another email encouraging employees — again with step-by-step instructions — to delete any social media posts linking to the article.
“We are working with Forbes to resolve and will let you know when it will be reinstated,” the email said. “We apologize for the inconvenience, and we will send out a new link as soon as it’s available.”
The Forbes contributor declined to comment for this story. Forbes told the Tribune the article was taken down because it did not adhere to the company’s “editorial guidelines” and did not respond to further questions.
The article has yet to be republished, but Guaranteed Rate still wants people to read it. The company shared it in a PDF on its LinkedIn page.
The longer you live in your house, the more obvious it may become that you could use more living space — perhaps for a guest bedroom, home office, or workout space. Your first thought might be to build an addition, but the sticker shock may cause you to shelve that idea and instead consider an attic conversion.
Fortunately, an attic conversion is an idea that may be more economical than a complete home addition. Read on for a full breakdown of the cost to finish an attic.
Should You Convert Your Attic Space?
There are many benefits of converting an attic into usable space, including:
• The space already exists in your home, making this choice both cost- and time-effective.
• You don’t need to pour a foundation, again making it a more viable and economical option.
• Wiring is likely already in place and can be modified to suit your needs.
An attic conversion also allows you to use the entire envelope of your home, rather than wasting potential living space.
Before you fully commit to your attic remodel, though, it’s crucial to make sure your attic has the potential to become a usable living space (more on that below).
Tips on Converting an Attic
One of the first things you might do before converting your attic is to see if your roof is being supported by W-shaped trusses in your attic. If so, building an addition might be a better choice. If your attic contains A-shaped rafters, though, that’s a plus; if there’s enough open space beneath the rafters, then you can potentially convert your attic into usable space.
Other steps to take before an attic remodel include:
• Check your local building codes to make sure your remodel will fit. The rules vary by area but a typical requirement is that the attic space must be at least 7.5 feet high and over 50% of the floor area. The thickness of the material will also factor into the final headroom and ceiling height. The quickest way to add significant costs to your attic remodel is to be forced to change course mid-project because of a code violation.
• Determine how you’ll get into the space. Will you need to add a staircase or expand the current one? Stairs that go straight up will need more floor space than, say, spiral staircases. Or perhaps your only option is a pull-down access point; this will limit what furniture and materials you can fit into your attic conversion and how utilitarian the new living space might be.
• Consider whether you’ll need to add windows. If you’re creating an additional bedroom, codes may require an egress window in case of fires. But even if they aren’t required, you might consider adding windows or punching skylights that open to brighten the space with natural light.
• Decide how much flooring needs to be reinforced, along with any electrical or plumbing issues. If you ultimately decide that your attic has what’s needed for a successful conversion, it’s time to think both practically and creatively to shape what may well become the most interesting — and potentially challenging — room in your house.
• Consider your priorities and budget. Once you get a sense of costs (listed below) and what’s most important to you, you’ll want to come up with a budget and a plan for how you’ll pay for the upgrade. If you don’t have enough cash to cover the project, you may want to explore financing. Funding options for finishing an attic include using a credit card (generally the most expensive route), getting a home improvement loan (a type of unsecured personal loan designed for small to mid-sized home renovations), or applying for a home equity loan or line of credit (which uses your home as collateral for the loan).
• Consult with a professional unless you’re already an experienced builder. Ask friends, family members, and building associations for recommendations and referrals, then request quotes from at least three contractors to understand both possibilities and associated costs. When you contact contractors, ask them for credentials. Compare bids and, tempting as it may be, don’t automatically choose the lowest one. Make sure the contractor describes what will be provided as well as the estimated time frame.
Want to know how much value your attic conversion will bring to the table? Check out SoFi’s Home Project Value Estimator.
How Much Does It Cost to Finish an Attic per Square Foot?
On average, you can expect to pay between $10,600 to $50,000 — or $50 and $150 per square foot — to refinish your attic, according to Angie (formerly Angie’s List). A specialized or high-end attic conversion can cost as much as $200 per square foot.
Overall, costs vary depending on the overall square footage and the materials you use.
How Much Does It Cost to Finish an Attic per Task?
If you hire individual contractors for each aspect of your attic remodel, then it’s easy to see what each portion of the remodel is costing you. However, if you hire a contractor to manage the entire project, you likely won’t receive the project broken down into great detail.
What follows is a breakdown of common costs involved in an attic renovation.
Cost of Walls and Ceilings
New walls and ceilings can effectively transform an unfinished attic into a space that’s both comfortable and livable. Although prices vary by where you live, attic drywall can cost an average of $1,000 to $2,600 to install, with ceilings costing anywhere from $200 to $12,000.
Other aspects to consider: Will you paint the walls and ceilings? Add wallpaper? Do you need trim and crown molding? All of these features will be additional costs and can quickly cause your project budget to skyrocket.
Cost of Flooring
Flooring is another important consideration, so first think about what’s located directly below the attic space. Do you need soundproofing? If a bedroom is located below the attic space, you’ll likely want some sound control. Insulation provides that to some degree, and carpeting adds even more dampening.
The cost of attic flooring will depend on the current state of the attic and what materials you choose. Replacing floor joists to beef up the strength will cost anywhere between $1,000 and $10,000, while installing subfloor will run between $500 and $800. Installing the flooring itself averages between $1,531 and $4,848, depending on material and square footage.
Recommended: Renovation vs. Remodel
Cost of Windows and Skylights
If there currently are no windows in your attic, you may want to add an egress window, which will run you between around $800 and $2,400, as a safety precaution. You also might want windows or skylights to brighten the space with natural light. Expect to pay an average of $2,500 – $5,500 to install an attic window, and $1,000 to $2,400 to add a skylight.
Recommended: How Much Does It Cost to Replace Windows?
Cost of Heating and Cooling
Your attic conversion might require additional heating and cooling. The price to install an attic fan is around $400 to $900, and a standard window AC costs about $150 to $800 per unit. A skillful contractor could also potentially tie in your current climate control system.
For heat, baseboard heaters run $942 on average. If you need to add HVAC ductwork and vents to extend your home’s AC and central heating systems to the attic, you can, expect to pay anywhere from $1,000 to $5,000.
If your attic is difficult to access during the renovation period, contractors may tack on a surcharge. To get an idea of how much your attic renovation will cost, you may want to use an online home improvement cost calculator.
How Much Does It Cost to Finish an Attic Yourself?
It’s generally cheaper to go the DIY route than to hire a professional — though you will need some know-how. If you’re making minor improvements to your attic space (such as adding an attic fan and cleaning it up, you may be looking at an attic remodel cost as low as $300. However, if you’re looking to make a total transformation, your costs for materials could run as high as $50,000.
Though you’ll certainly save on labor costs, make sure to take into account the time involved if you decide to do it yourself as opposed to bringing in a professional.
Recommended: Four Ways to Upgrade Your Home
How Much Does It Cost to Finish an Attic by Type?
How much it costs to finish an attic will also vary depending on the type of attic space you’re creating. Here’s a look at how much an attic remodel costs by attic type.
Cost of Finishing a Walk-Up Attic
The cost of finishing a walk-up attic generally ranges anywhere from $8,100 and $26,000. Large portions of the costs are typically adding a staircase and installing flooring.
Finishing an Attic as a Storage Space
If you’re finishing an attic to serve as a storage space, your costs are generally a little lower as there isn’t as much polishing involved. Generally, the attic remodel cost for a storage space runs from $4,600 for a simpler setup to $18,900 if the space is larger and you opt for more elaborate storage systems.
Cost to Finish an Attic With a Dormer
Installing a dormer — a window that juts out vertically on a sloped roof — can add in some ceiling height and natural sunlight into an attic. However, it will set you back. On average, the cost to add in a dormer along with finishing the attic can run between $8,800 and $32,400.
Cost to Finish an Attic Above a Garage
The cost to finish an attic above a garage can vary widely depending on what’s involved, such as the installation of heating, insulation, or ventilation. You can typically expect to pay anywhere from $4,600 up to $24,000.
Recommended: Garage Conversion Ideas Worth the Effort
What Factors Influence the Cost of Finishing an Attic?
As you may have guessed from the wide-ranging estimates above, the cost of finishing an attic can vary a lot depending on what’s involved and what materials you use. Here a look at some major factors that can affect how much it costs to finish an attic.
• Square footage: How large your attic is will play a big role in the total costs involved in remodeling. The bigger an attic is, the more materials required and the more time it will take to finish it, which translates to additional labor costs.
• Need for structural changes: You’ll also pay extra if your attic is an odd shape or difficult to access. These challenges could call for structural updates, such as the addition of height, the expansion of space, or the creation of a staircase.
• Intended use: Your planned purpose for your attic will also influence cost. If you just want to add in some additional storage space, you’ll pay a lot less than if you plan to install a full suite complete with a bedroom, bathroom, and closet.
• Extra features desired: Perhaps unsurprisingly, the more features you want in your newly remodeled attic, the more it will cost you. Big-ticket items include windows, electricity, plumbing, and heating and cooling.
Of course, another factor that influences your cost is whether you need to get financing for the project and, if so, what terms you’re able to secure.
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The Takeaway
An attic conversion can be one way to create a unique room and add more usable space to your home. It also tends to be more economical than adding an addition to your house. There are a lot of technical aspects to consider, and before getting started, it’s best to check with your local building department so you know any building or permit requirements upfront. You can then come up with a project wishlist and start soliciting bids from at least three contractors.
At the same time, you’ll want to determine if you’ll pay cash or finance all or some of the project. One financing option you might consider for an attic renovation is an unsecured personal loan. Offered by banks, credit unions, and online lenders, rates are typically lower than credit cards. And unlike a home equity loan or home equity line of credit (HELOC), you don’t need to use your home as collateral to qualify.
SoFi’s Personal Loan was named NerdWallet’s 2024 winner for Best Personal Loan overall.
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The main difference between solar shingles and solar panels is the way they’re mounted. Solar panels are mounted on a roof (or the ground), while solar shingles do double duty as rooftop shingles. Solar shingles generate electricity the same way solar panels do.
How solar shingles work, what they’re made of and how they’re installed
Solar shingles work the same way solar panels do, but solar shingles look like and function as traditional roof shingles. This means they serve a dual purpose: to generate electricity and to protect your home from the elements.
Solar shingles can be made of silicon (the oldest and one of the most popular options) or copper indium gallium (CIGS).
Here’s how solar shingles (and solar panels) generate electricity:
You can have only solar shingles for a roof, or you can install some solar shingles with your existing roof shingles. Typically, if the solar shingles don’t need to take up your entire roof space, the installer integrates the new solar shingles with the rest of your existing roof structure. Once the shingles are mounted, they’re connected to an inverter, and the inverter is connected to the home’s electrical panel, so you can enjoy usable AC electricity from your solar shingles. The installation process usually takes a few days.
Solar shingles vs. solar panels: Key differences
Although they generate electricity in the same manner, there are some important differences between solar shingles and solar panels.
Cost: Solar shingles are generally significantly more expensive than solar panels.
Appearance: Solar shingles offer a sleeker look than solar panels. Unlike solar panels, which are mounted on racks, solar shingles sit flush with the home’s roofline and can be indistinguishable from regular shingles from a distance.
Efficiency: Solar panels typically are more efficient than solar shingles. This is partly because solar shingles sit flush against the mounting surface, which doesn’t allow for cooling airflow beneath them.
Availability: As an older, tried-and-true product, solar panels are more widely available than solar shingles.
Installation: Installing solar shingles tends to take longer than installing solar panels (unless you’re replacing your entire roof or working with new construction). Solar shingles don’t require drilling into the roof to attach a rack; they are installed with roofing nails, which reduces the risk of leaks or roof damage during the installation process.
Roof considerations: Your roof needs to be in good condition to support solar panels. Solar shingles, on the other hand, can double as a roof replacement for an old roof in poor condition. Additionally, unlike solar panels, which can be tilted to catch maximum sunlight, solar shingles lie flush with your roof. This means solar shingles aren’t suitable for flat roofs or roofs that don’t face the sun.
How to decide between solar shingles and solar panels
Solar shingles may be your best choice if:
Aesthetics and curb appeal are a top concern.
You’re dealing with an HOA that has strict guidelines about appearance and might challenge the installation of solar panels.
You’re replacing your roof at the same time or working with new construction.
Solar panels may be your best choice if:
Your existing roof is in good condition
.
You have a flat roof.
You have a roof that isn’t at the optimum angle or orientation for shingles (some panels can be tilted to maximize the capture of sunlight).
Frequently asked questions
Are solar shingles and solar panels eligible for the federal tax credit?
Both solar shingles and solar panels can be eligible for a federal tax credit. With solar shingles, however, be aware that the costs of actual roofing components such as deckings or rafters that only serve a structural function and are not related to solar energy do not qualify for the credit.
Can you walk on solar shingles like you can on a regular roof?
Although solar shingles are usually strong enough to hold the weight of an adult and contractors do walk on them while wearing a harness, these shingles can be very slippery and unsafe to walk on.
Which lasts longer, solar panels or solar shingles?
Both solar panels and solar shingles have similarly long lifespans of 20 to 30 years.
A study commissioned by the U.S. Department of Housing and Urban Development (HUD) Office of Policy Development and Research (PD&R) in 2022 aimed to assess the state of the Home Equity Conversion Mortgage (HECM) program over a 20-year period.
Released late last year, the study examined three core elements of HECM program effectiveness between 2000 and 2020. It was conducted by analytics firm SP Group LLC and its subcontractor Econometrica Inc.
RMD already examined the study’s sections related to borrower trends and various program policy impacts, but the section on economic impact attempts to assess the value provided to taxpayers, as well as the HECM program’s impacts on the Federal Housing Administration’s (FHA) Mutual Mortgage Insurance (MMI) Fund.
Assessing financial impacts
The researchers assessed the financial impact through the scope of gains and losses over the 20-year period, with data derived from “HUD’s data systems, including mortgage insurance premiums (MIPs), claim payments, note-holding and property-holding expenses, and net recoveries on dispositions for terminated loans,” the report explained.
Determining what constituted “gains” and “losses” was seen through the impact that the program had on the solvency of the MMI Fund. They do not include the administrative costs for the program incurred by HUD, including “the cost of direct and indirect staff, contractors, facilities, data systems, and other resources used in administering the HECM program that are not recorded as program costs.”
Insured loans were looked at through both mortgage insurance premiums and claims, or cash outflows paid to the lender under the FHA insurance program that the HECM program operates from.
“Of the 1.1 million HECM loans endorsed during the 20-year period, the research team identified 533,894 HECM loans that were terminated and disposed as of September 30, 2020, and no further transactions occurring after September 30, 2020,” the report said. “Based on this sample, the research team estimated that FHA incurred a total loss of approximately $10.4 billion, or an average loss of $19,556 per loan.”
Roughly two-thirds of the more than 533,000 loans studied resulted in net gains for the FHA, the report found. The average gain per loan that was terminated without a claim was just over $10,000.
Disposition over time
Loans were also examined on a year-by-year basis, the report stated. It found that, aside from 2007 and 2008, the program ”incurred gains on most of the loans endorsed in each of the other fiscal years.”
The average loss for each loan originated in 2007 was estimated to be $37,300, or a total loss of about $2.5 billion for that cohort of loans. Beginning in 2014, all loans that were terminated with gains reached 92% of the total share — and ultimately reached 100% by 2018, where it has remained despite severely reduced volume, according to the data.
The report also reviewed impacts of alternative disposition methods HUD has used for assigned loans. It characterized the first of the two most common options as the “conveyance program,” which is “used for those HECM loans that are assigned to and foreclosed by HUD and for which the underlying REO is sold through the traditional conveyance program.” The second is the “note sale program,” in which an assigned loan is attached to a vacant property that HUD then sells to a third party through a vacant note sale.
The report aimed to determine the loss severity and overall timeline associated with each option, finding 15,380 loans within the time period disposed of through one of these two methods.
“On a per loan basis, the conveyance program generates a higher cash inflow, but the outflows in that program are almost twice as high as those under the note sale program, resulting in a loss of approximately $142,000 per loan,” the report stated.
When compared by fiscal year of loan endorsement, the report determined that the average loss for each loan “was consistently lower for those disposed through the note sale program,” the report said. “The difference in average loss per year was largest for loans endorsed in fiscal years 2009 and 2010, when losses generated by the loans disposed through the conveyance program were more than twice as high as those generated by the loans disposed through the note sale program ($180,000 versus $80,000).”
Loans sold through the conveyance program had a timeline of approximately two years between initiation and final disposal, and the “average number of months for REO sales stabilized at approximately 37 months” since then, the report said.
Loans sold through the note sale program typically took less time than those through the REO sale channel — save for those loans terminated in 2017, according to the data.
“It does not appear that time to disposition is the primary driver of holding costs, because average holding costs rose from fiscal years 2014 to 2020, whereas the average time to disposition did not fluctuate,” the report explained.
Other findings
The report also found that certain policy changes applied to the HECM program during the study period — including financial assessment and life expectancy set-aside (LESA), “detected that the introduction of the financial assessment, LESA, and underwriting requirement was associated with reduced likelihood of defaults, lower unscheduled draws, and lower net losses to loans made to Black borrowers — although a net loss reduction to the overall population could not be established.”
The study also found that borrowers during this time tended to skew toward the younger end of the senior demographic. This reinforced longstanding data showing that single women use the reverse mortgage program far more than single men — and at rates well beyond the average divisions present in the senior demographic.
Since 2011, roughly half of all borrowers specifying why they sought out a reverse mortgage chose only one reason, while the other half selected multiple reasons. Most of the borrowers who chose one reason (53%) selected “additional income” as their reason for obtaining the loan.
“This finding is in line with the HECM program goal of providing seniors the ability to turn their home equity into supplemental income,” the report stated.