Ever wondered what it’s like selling rural real estate or doing land deals? Al Wisnefske specializes in these types of real estate transactions and has set up some unique systems to scale his sales. Hear how he markets to buyers and sellers, where he gets his leads, and what it takes to make out-of-state real estate referrals. Al also shares advice for new real estate agents and talks about his real estate investing strategy. Don’t miss it!
Listen to today’s show and learn:
Al Wisnefske’s start in real estate [3:15]
Al’s real estate transactions in 2022 [7:20]
The type of property $250,000 can get you in rural Wisconsin [8:36]
How Al got his first real estate deals [10:04]
Direct mail marketing, radio ads, and text campaigns [12:40]
How to get leads for texting and what to text [14:31]
Ways to text leads without getting into trouble [17:14]
Approaching properties as an agent and as an investor [20:04]
What Al wishes he knew as a new real estate agent [23:34]
Investing in real estate actively versus passively [24:46]
Wisconsin real estate market predictions [28:17]
What to do with nationwide real estate leads [31:16]
Advice for new real estate agents [36:25]
Where to find and follow Al Wisnefske [40:45]
Al Wisnefske
Al grew up in the rural part of Washington County. It’s there where he grew a fascination with land, farms, and country homes. After graduating from the University of Wisconsin – Stevens Point in 2014, he decided to take his knowledge, experience, and entrepreneurial spirit into the real estate industry. As the Managing Partner of Land & Legacy Group, Al knows firsthand that sellers can be assured that their finest asset is being fully showcased, and the relationship they have with a real estate brokerage will be unsurpassed. Since 2014, Al has helped his clients buy, sell, or invest in everything from sprawling rural estates to first time dream homes for young couples. Al has the skills, knowledge, and insight necessary to deliver unsurpassed results for all different kinds of real estate needs.
As a Realtor, communication and connection is what keeps Al’s clients coming back for more. At the core of who Al is and what he stands for is unsurpassed customer service, insightful opinions and negotiation, honest advice, and endless support. For these reasons and more, he is proud to have numerous raving fans and repeat and referral clients. As an advocate, he knows what it’s like to feel like an outcast. People overlook what you can do and who you can become. Through his own personal struggles as being the “shy kid,” he learned how strong he could be. As he fought for what he dreamed of, he learned that no dream is too hard to make a reality. He’s faced scrutiny from teachers, employees, classmates, family members, and friends. He grew stronger each time adversity was put in front of him. It took over 20 years to climb this mountain, but when he did, everything else he wanted to achieve was within arm’s reach.
Al has not only helped hundreds of clients move in and around Wisconsin he is also an active member in our community.
He’s previously served on the Washington County Deer Advisory Council (CDAC)
He’s held the office of branch President for the Quality Deer Management Association (QDMA) Kettle Moraine Branch.
With these groups, he got a firsthand look at the interaction between our local community and Wisconsin’s hunting heritage.
More recently, he has been an active sponsor for:
Kettle Moraine ATV Association
Wisconsin Wildlife Federation
Multiple other local businesses and organizations, including serving on the Community Relations Committee of the Cedar Lakes Conservation Foundation
As a local business owner, he can relate to the walls and barriers one can encounter along their business journey. He believes in a strong investment and giving back to the fabrics of his communities.
His reach goes far beyond real estate and changes the lives of those who interact with him in a positive way.
Related Links and Resources:
It might go without saying, but I’m going to say it anyway: We really value listeners like you. We’re constantly working to improve the show, so why not leave us a review? If you love the content and can’t stand the thought of missing the nuggets our Rockstar guests share every week, please subscribe; it’ll get you instant access to our latest episodes and is the best way to support your favorite real estate podcast. Have questions? Suggestions? Want to say hi? Shoot me a message via Twitter, Instagram, Facebook, or Email.
Everyone loves a good celebrity story—the dazzling red carpets, the breathtaking performances, and sometimes… the scandals. From Justin Bieber to Meghan Markle, each star brings their own set of controversies that make us scratch our heads in disbelief. But what’s worse than a scandal is when an influential celebrity gets away with toxic behavior without facing any repercussions.
In today’s blog post, we’re counting down 20 celebrities whose questionable deeds mostly flew under the radar. So if you want to learn more about who wasn’t caught in these webs of drama, keep reading!
1. Nicki Minaj
One user posted, “Nicki Minaj and oh god where to begin…. She paid for the bond of her brother, who was convicted of s-xually assaulting his 12-year-old step-sister, and years later went on Twitter and accused the girl’s mother of extortion, but let’s just say the forensics evidence in court made it VERY clear the child was not lying.
“She dressed as a fairy princess and ‘demanded’ a woman in a wheelchair walk.
“She married a man who had broken into a 17-year-old girl’s home, put a knife to her back and attempted to assault her… She then went on to her radio show and told over 10 million people that the victim was a white woman (she was not) who was lying to an innocent black man due to spite. The victim has been harassed by her fans since, even receiving death threats.
“She gloated in a now-deleted tweet about how she fires her employees who ask for days off. When asked, she would tell them to think about the days she wanted off but never got, and if they still wanted the day off after her spiel, she would fire them.
“She’s consistently a very vile person, and it seems no one cares enough to say anything about it.”
2. Kirk Douglas
“Kirk Douglas. R*ped Natalie Wood and probably more. Still regarded as a legend,” one user shared.
Another user added, “It was a violent [too], from what I read. He was a horrible man. Comparing women to dogs.”
“…And maybe killed a pregnant girlfriend. I don’t think they ever found her body,” one commenter replied.
3. Jack Nicholson
One Redditor said, “In 2000, Jack Nicholson beat a woman so severely that she sustained permanent damage to various regions of her brain.”
Another user asked, “Why haven’t I heard of this? What a [horrible human].”
One user replied, “Nicholson is getting up in years as he’s in his mid-eighties now, and rumour has it that he’s got Alzheimer’s—hasn’t made a film in several years. If some of the more unsavoury and sinister stories about him are true, it’s likely to come out after he passes. Once he’s gone, I don’t know whether his several adult children would have the clout and influence to suppress something like an exposé biography.”
4. Oprah
One Redditor commented, “Oprah. Oprah started the anti-vaxxer movement by bringing on Jenny McCarthy and Andrew Wakefield and didn’t bring out an actual scientist to dispute the claims. She gave them the voice that they should never have had, and because of it, she has the blood of every person who has died because of their anti-vaxxer beliefs on her hands.”
Another user added, “Oprah and Meryl Streep enabled and supported Weinstein for decades. I’ve even heard stories about them directing young hopefuls in his direction, knowing full well what he would do. Somehow they haven’t had a word said against them for their behaviour and are treated as modern-day saints.
“No amount of wearing a ‘Times up’ button and espousing girl power nonsense will cover up the fact that they were complicit in his crimes. But because they are so powerful, rich and (most importantly, women), they have gotten away with it without much mention. I get you can’t be held responsible for someone else’s actions. But they knew, and they were fine with it.”
5. Charlie Chaplin
“Charlie Chaplin treated his children and teenage wives with relentless cruelty,” one user shared.
Another user replied, “There was a documentary on Chaplin where they tried to wave all these ‘[abusing] teenage girls’ [claims] away by basically saying: ‘Oh, women in Hollywood are all jaded cynical;… Charlie just appreciated the pure innocence of young girls before they corrupted themselves.’ I remember thinking they should have just ignored the issue entirely if that was the best they could come up with.”
6. Ellen DeGeneres
One Redditor posted, “Ellen got away with it for a long time.”
Another user shared, “Ellen always had a nasty streak, all the way back to her Carson appearance. Her humour was always based on pain, but she crossed a line when she went from exploring it to inflicting it on others. I honestly think she had some incredible insight into modern culture, but it’s all [thrown] away by being a sh-thead. Losing her sitcom really seemed to have broken something in her.”
One user replied, “Remember when she tricked a celebrity (don’t remember who) into revealing she was pregnant on her show, which is a massive breach of privacy in a world where famous people need to fight to keep anything private.
“Then the woman had to announce sometime later that she suffered a miscarriage. Sure, it’s not Ellen’s fault that it happened, but if she had just minded her own business, this person would not have to deal with her trauma publicly. There’s a reason some people wait a few months to announce a pregnancy.”
7. Paul Walker
“The internet still seems to go all lovey when Paul Walker comes up, but he was literally mid-thirties when he started hooking up with his 16-year-old girlfriend. I never understood why he got a pass for that,” one user shared.
Another user replied, “Cause he died young and starred in a successful franchise.”
8. Antony Starr
One user shared, “[Antony] Starr, who plays homelander on The Boys, was harassing women at a restaurant. A 21-year-old chef tried to be diplomatic with him, and Anthony smashed a bottle against his face; when he literally had glass shards implanted in his eyebrows, Anthony said, “You don’t know who you’ve messed with, you don’t know who I am and what you’ve done. You’ve committed the mistake of your life, and I’m going to look for you. I want to kill you.”
“There’s a reason why his co-stars say he’s most like his characters. The way he got so violent after someone being diplomatic with him and the desire to continue wanting to destroy him, as indicated verbally by him, are clear signs of someone on the psychopathy spectrum and someone with the wealth and status to habitually and casually get away with treating people terribly.”
9. Victor Salva
“Victor Salva. Director of the Jeepers Creepers films. Less toxic, more convicted [child abuse] behaviour, but nobody seems to care and keeps giving his films—which are clearly him living out his fantasies of tormenting young boys—the time of day,” one user commented.
Another user replied,” (Not so)Fun fact. He filmed jeepers and creepers right next door to an elementary school and high school. I was at the high school when it was filmed. Total piece of sh-t.”
10. Dr. Phil
One user shared, “Dr. Phil. He literally sent troubled teens to an abuse camp (‘ranch’) to ‘fix them.’ The workers physically, emotionally and s-xually abused those kids.”
Another Redditor responded, “You can just call him “Phil.”
11. Phil Spector
“Phil Spector used to point guns at everyone in the studio and would threaten people on a daily basis. He made a gold coffin for his wife in case ‘she would ever leave him.’ Yet, people were surprised when he murdered someone.”, one user shared.
Another user added, “He held Ronnie Bennett captive and abused her for years. She gave up custody of her children and all future earnings on her recordings during the divorce out of fear he would hire somebody to kill her. His kids all say he s-xually abused them and kept them captive.”
12. Kobe Bryant
One user commented, “Kobe got away with r-pe…
Kobe’s defenders claim Kobe is innocent by citing something the victim allegedly said after the trial, ‘I’m going to make so much money off of this,’ even though every publication that initially reported this eventually had to take their article down. And even then, maybe it’s ok to be happy considering what Kobe’s PR team, the media, and celeb worshippers who say the same stuff you’re saying put her through?”
13. Steven Tyler
One user posted, “Steven Tyler makes me want to vomit. I hate how Aerosmith is still played all over.”
Another user added, “I am almost certain that when their guitarist went solo in the 80s, Tyler’s BS was part of the issue, and only part of the band wanted to sober up. Amazing what a large contract with tons of money can make some people come back to, though.”
14. Joan Crawford
“Joan Crawford, in her lifetime, physically and emotionally abused her children, and it was not a secret to those close to her. Woody Allen is still welcome in some social circles though he is a [predator] and a sociopath who has groomed and… abused his own children. He married his stepdaughter, a child when they began living together… There’s a long list,” one Redditor posted.
15. Jimmy Page
One user shared, “Jimmy Page. He [abused] a lot of children.”
One user asked, “Wait, what? Really?”
One user answered, “Dude was even caught red-handed with hard drives of child [images]…”
16. Heidi Klum
“Heidi Klum. She’s literally abusing minors on camera AND is making money off of that, but nobody is talking about it,” one user posted.
One user replied, “I couldn’t agree more. I’m from Germany, and just about every woman over the age of 10 watches her show ‘Germany’s Next Top Model.’ In school, my classmates would just talk about this show all the time when it was on, and some of my friends still watch it. I’ve never watched it, and I’m not going to.
“It’s really disgusting what happens there. You are allowed to participate from the age of 16. The participants even have to pose [in nothing] or only in their underwear. Anyone who refuses will be kicked out. There are countless things I could list now, but that would be too much for me. I can not understand how something like this can still be produced and shown. Heidi Klum is a terrible person, in my opinion.”
17. Cardi B
One Redditor asked, “Didn’t Cardi B admit to drugging and robbing guys she had met at the strip club? I was pretty surprised at how quickly the media let her off the hook for that one.”
Another user answered, “Didn’t one of the victims say that being drugged was still a better experience than listening to her music.”
One commenter responded, “That’s hilarious if true.”
18. Woody Allen
“Before Allen v. Farrow HBO came out, Woody Allen used to have supporters on Reddit who would go hard at defending him like the Al Franken supporters do these days. They would link to bullshit publicans and weird pdfs claiming to be from the court case. People would usually give up arguing with them because they were so many, and they were extremely knowledgeable about the case, so they could just keep citing shit whenever people would critique Woody Allen.
“I would keep talking shit about Woody, and sometimes there were no defenders, but weeks later, you would have someone come in and start a point-by-point breakdown about how Woody was innocent and was framed by Mia.
“Then Allen v. Farrow HBO came out, and suddenly, I don’t see these types of comments anymore. I suspect a social media astroturfing campaign was a part of Woody’s PR budget, but then it became exhausted after Allen v. Farrow,” one user posted.
19. Sean Penn
A user also commented, “Sean Penn tied [up] his wife, Madonna,… and beat her. No one seemed to care. Most people don’t even know it, I bet.”
However, one user disagreed, “According to her, it never happened. There are many documented instances of him being an asshole, but I’m inclined to believe her on this.”
20. Billy Joel
“Billy Joel. Dated a 19-year-old Elle McPherson in his mid-thirties. Then moved on to Christie Brinkley. He treated his band, who was co-writing and arranging his songs, like absolute garbage. He then unceremoniously fired them at a producer’s insistence.
“They protested fishing limitations imposed on fishermen on Long Island by getting purposely arrested. The thing is, there were dangerous levels of chemicals in the fish. The restriction was so people didn’t get sick and die.
“He was allowed to play Moscow during the height of the Cold War. They proceeded to act like a total asshole because the film crew documenting it wanted to light the audience. Also, years of being a fat, drunken slob and terrorizing Long Island.” one Redditor posted.
Another user added, “My Father owned an appliance repair company on the south shore of Long Island; he sold it in ’95. Billy Joel was a customer, and my Dad said the man was always a huge [jerk]. He hated doing service calls for Joel and always tried to pawn them off on his apprentice, but that didn’t always happen, and he’d have to go there himself. I wondered why the guy didn’t just buy a new washer, but whatever. Apparently, his brother was a nice man.”
Do you agree with the list above? Tell us below!
Source: Reddit.
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An AskMetafilter user wonders: How many credit cards do typical people have?
For various reasons I have four credit cards. I always thought of this as too many, but haven’t cancelled mine since the crappiest one is also the oldest, and has no fee, and I want to maintain the age of the card on my credit report. Most people I know have one or two cards. But reading online forums on credit, I see plenty of people with more than four. How many is normal? How many do you have?
According to How Many Credit Cards is Too Many? at MoneyCentral, “most Americans carry between five and ten credit cards”. According to Steve Bucci at bankrate.com:
The average person carries eleven “credit vehicles.” Typically, seven are different types of cards and four are installment loans for cars, furniture, student loans or mortgages.
I heard recently that the average number of credit accounts was 12.7 per person, which is slightly higher than Bankrate’s numbers indicate. The numbers I heard are closer to the average credit statistics at myfico.com:
On average, today’s consumer has a total of thirteen credit obligations on record at a credit bureau. These include credit cards (such as department store charge cards, gas cards, or bank cards) and installment loans (auto loans, mortgage loans, student loans, etc.). Not included are savings and checking accounts (typically not reported to a credit bureau). Of these thirteen credit obligations, nine are likely to be credit cards and four are likely to be installment loans.
Perhaps of more interest to some readers, Nellie Mae has statistics from the year 2000 about student credit card use. Undergrads carry about three credit cards each and graduate students carry about four credit cards each. The credit trap begins early.
Myfico.com also offers information about average debt load:
About 40% of credit card holders carry a balance of less than $1,000. About 15% are far less conservative in their use of credit cards and have total card balances in excess of $10,000. When we look at the total of all credit obligations combined (except mortgage loans), 48% of consumers carry less than $5,000 of debt. This includes all credit cards, lines of credit, and loans — everything but mortgages. Nearly 37% carry more than $10,000 of non-mortgage-related debt as reported to the credit bureaus.
Liz Pulliam Weston at MSN Money sees these numbers and concludes that the media is filled with alarmists. She recently wrote a column entitled The Truth About Credit Card Debt in which she attempts to argue that the U.S. is not filled with people struggling under the burden of too much debt. Weston says that one quarter of Americans have no credit cards. Another third of Americans do not carry a balance on their cards. She claims this is good news. And it is, but I think she’s overstating the situation.
According to her own admission, 45% of American households still carry a median of $2200 in credit card debt. She also admits that debt burdens are climbing (she notes that credit card debt has increased 10% in three years), that debt-to-income ratios are near record highs, and that bankruptcies are at record levels.
Weston’s broad point may be correct, but it minimizes the trouble that millions of Americans have: they’re in debt, and deeply so. Credit cards play a huge role in the problem.
Most experts recommend keeping between two and five low-interest credit cards, and to pay them off regularly. Certainly keep balances below 50% of the max (for credit score purposes and for debt burden purposes). Personally (and I’m no “expert”), I think a person should have zero credit cards if at all possible. If this makes you nervous because you think you need one as a safety net, or if you know (not “think”) that you’re responsible enough to pay off your balance regularly, then carry one or two cards to get free credit report for easy maintenance (preferably rewards cards that you pay off monthly). Don’t carry more. (And if they’re truly for “emergency use”, make them cards that don’t let you carry a balance.)
Too many people focus on credit cards with regards to credit history. The ideal — admittedly very difficult to obtain — is to live a life in which your credit history is irrelevant because you’re not obtaining new debt (aside from a mortgage). I haven’t carried a personal credit card in almost a decade. I don’t miss them at all.
Ready or not, artificial intelligence seems poised to play a larger role in the home lending industry, but companies are trying to create their AI strategies in what are largely uncharted regulatory waters.
While some have already found ways to take advantage of generative AI tools on the back end of the home buying process, the arrival of ChatGPT shined an even brighter spotlight on potential opportunities and dangers in artificial intelligence, which many expect to propel technology development in the mortgage industry.
But while real estate companies have taken advantage of generative AI chatbots as plugins to their own home-search platforms, few mortgage lenders and servicers have joined the bandwagon by using ChatGPT-like tools in a consumer-facing capacity amid concerns of noncompliance. In a regulatory environment that currently provides few clear-cut rules but frequent warnings about possible enforcement, companies designing AI-enabled communication find themselves in a situation comparable to building an airplane while trying to fly it.
The potential risk within generative AI corresponds directly to the quality and quantity of data contained within it, experts agree. A key challenge for developers lies in ensuring available data is sufficiently rich enough to provide accurate responses from the AI.
Inherent bias in some data models represents “a real danger” and could result in discriminatory practices and violations of fair lending, according to Jennifer Smith, principal at mortgage advisory firm Stratmor Group.
“The black box of those algorithms can be very difficult to understand. There’s very little transparency of what is this being built on as it’s learning through,” she said.
“Regulators are very much wanting to force lenders to understand what’s going on inside those systems. And that’s darn near impossible.”
One home finance company striking up a conversation on AI chatbots is Providence, Rhode Island-based Beeline. In July, the company, whose products range from traditional refinances to investment-property loans, launched what it claims is the first AI-powered mortgage chatbot, called Bob.
Rather than drawing on the same sources of data ChatGPT taps into, Bob attempts to form answers based on what is within its own “brain,” which is continually tested to ensure accuracy, said Jay Stockwell, Beeline’s co-founder and chief marketing officer, who helped develop the proprietary platform. Much of the original data and answers fed to Bob’s brain came from analysis of over 70,000 previous messages that came through an older Beeline chatbot.
“We took that big body of messages and then we did a cluster analysis based on what are the clusters of questions that people ask, because a lot of people ask more or less the same question but just in different ways,” he said.
“We just went at it for months to provide really rich, clear answers to those exact questions.” But Bob is constantly learning, Stockwell added.
“We review it every day. We go through and then we improve the brain, and run the same questions again and continually optimize this.”
Among other safeguards Beeline has introduced to try to ensure the safety and accuracy of its AI are deployment of multiple AI models, including a constitutional version, to regularly check on its responses. Beeline also will not allow Bob to collect personal client data that could result in discriminatory bias and can “turn it dumb” when necessary, according to Stockwell.
“Bob doesn’t know the name, doesn’t know their email, doesn’t know the location, doesn’t know any of that. And then if we ever kicked them into a quote, that’s removed out of the AI system.”
Removing potential bias triggers is key because just as a lender would be held accountable when human personnel errs, the same will hold true if a chatbot does, Smith said.
“The regulators have been very clear that a violation is a violation, whether it’s a chatbot or a live person, and that’s where it becomes very difficult,” she said.
Other guardrails placed around Bob are similarly no different to what certain human employees would require. “What would that person be held to, thinking of it as an unlicensed non-loan originator position?” said Jess Kennedy, another Beeline co-founder as well as its chief operating officer.
“All the things that you would train a human on, we said — hey, let’s make sure Bob doesn’t do any of these things either.”
For instance, Bob, as well as any type of chatbot, is prohibited from doling out anything resembling financial or legal advice, a rule that will likely always be in place, according to Alec Hanson, chief marketing officer at loanDepot.
“There’s going to be some clear lines in the sand because it’s not a licensed entity. And in lending, you need to be licensed to do certain activities and that clearly isn’t,” he said.
But even with consumer safeguards in place, responses AI generate still hold the risk of unintentionally misguiding clients through the omission of some options.
“The problem is sometimes we have datasets — you’re not going to fit into the majority of them if you are oftentimes a low-to-moderate income minority borrower. And so you’ve got to be very careful,” Smith said.
Whereas lenders have made dedicated efforts in the past two years to open up homeownership opportunities to underserved communities, the AI black box may not hold the information about various affordability programs a human agent knows, Smith added.
“If your algorithm has been built upon datasets that have an inherent bias in them, you may end up having that same chatbot steer a prospective borrower to a product that’s not good for them,” Smith said. “It might steer them toward a subprime product when they are actually very eligible for a conventional product, especially if you’re including special purpose credit programs or down payment assistance programs.”
AI chatbots are also still not close to the point, nor intended or allowed by regulators, to be a full replacement for human interaction, developers say. “For today, it’s a very reactive system,” Hanson said. “It doesn’t necessarily ask you the right questions.”
To prevent user frustration from building, Beeline programs its chatbot to not provide any responses to queries it lacks answers for and also reads customer sentiment while the tool is being used. If it senses growing dissatisfaction or misunderstanding based on the language or punctuation in a message, Bob will instead send the user to a service agent.
“That was a key thing in terms of best practices,” Kennedy said. “It’s evolving so quickly, so we know the best practice, but there often hasn’t been a method to do the best practice because it’s so new.
As chatbots develop further and become “smarter,” mortgage fintech leaders think they may possibly realign the workforce at lenders, taking over the customer service tasks which don’t demand a licensed employee.
“We’ve been big believers in how the mortgage industry itself is ripe for this type of application, where you can take tons of this raw data and have AI go through it and better organize it, clean it, model it to really enhance the human beings that we have working,” said Dan Snyder, co-founder and CEO of lending fintech Lower.
“I think you end up getting people like your customer service agents — instead of answering the same questions every day — they can move to higher-paying elevated jobs,” he said. Snyder added that his company was exploring bringing AI tools to his business, either by resurrecting old blueprints the company initially developed a few years ago or adopting new models
The next two years should be a pivotal period that will determine the full potential of AI, Snyder noted. “You’ll start to see a lot of the vendors that are launching AI into their existing product to maybe speed it up.”
But that anticipated growth of consumer-facing AI platforms will likely occur in a still-fluid regulatory environment. Although a full set of rules might hold some lenders back, the opportunity that lies ahead makes development today vital to future growth, Beeline’s Kennedy said. While the warnings agencies issued in the spring may not have spelled out regulatory details many would like, Beeline welcomed them, as it gave them hints at how to best proceed.
“We understand that if you’re looking to innovate, there is inherent risk because you’re on the bleeding edge of something that regulators and I mean, Congress, has yet to wrap their arms around,” Kennedy said.
“Our goal is just to be transparent and as proactive as we possibly can be with the regulatory environment.”
Mortgage tech firm Blend Labs narrowed its financial losses in the second quarter on the strength of its platform business as well as cost-cutting measures.
Blend, whose white-label software processes billions in mortgage transactions for lenders, reaffirmed its goal of reaching profitability by 2024.
The San Francisco, California-based company reported a non-GAAP net loss of $22.7 million in the second quarter, compared to $35.6 million in Q1 and $45.1 million in Q2 2022. The company’s GAAP net loss in Q2 was $41.5 million, down from a GAAP net loss of $66.2 million in the previous quarter, according to the documents filed with the Securities and Exchange Commission (SEC) on Wednesday.
Nima Ghamsari, head of Blend, said Q2 results exceeded expectations for the second quarter in a row largely driven by its resilient customer base.
“We’re driving adoption and utilization growth of our value-add features, maintaining strong retention, and growing mortgage market share – all while continuing to set the foundation for our next-generation mortgage products on our Blend Builder platform,” Ghamsari told analysts.
The company posted $42.8 million in revenues in Q2, above the guidance provided by executives of between $39.5 million and $41 million.
Blend Builder — a cloud banking platform designed to help businesses in the financial services industry streamline processes for mortgages, loans, deposits and accounts – is a “key driver of the company’s growth strategy,” Ghamsari noted.
Blend’s platform segment — which includes the mortgage suite, consumer banking suite and professional services under the changed reporting structure — came in at $30.3 million in revenues. The Title 365 segment revenue posted $12.5 million.
The mortgage banking suite revenue declined by 17% year-over-year to $22.3 million, performing better than a 37% mortgage market volume decline over the same period as reported by the Mortgage Bankers Association (MBA), the company said.
Blend’s white-label technology powers mortgage applications on the websites of major lenders such as Wells Fargo and U.S. Bank. With client’s increases in adoption of add-on products and renewals, mortgage suite revenue per transaction increased from $77 to $93 from the same period in 2022.
Add-on products released in Q2 include a soft credit inquiry function for lenders that would save them about $50 per file. The company previously noted that lenders that adopted soft credit into their workflows saved up to 71% compared to lenders utilizing all hard inquiries.
Blend deployed 18 consumer banking products this year, bringing in $5.8 million revenue in its consumer banking suite – a 27% increase from Q2 2022.
Professional services revenue increased 10% year-over-year to $2.2 million.
Ghamsari’s priorities for the rest of the year is to roll out value-add features like soft credit pulls and add-on products such as Blend Close and Blend Income.
Blend’s cutting costs, accelerating path to profitability
On the expenses side, non-GAAP operating costs in Q2 totaled $41.7 million compared to $65.3 million in the same period of 2022.
As part of the internal efficiencies gained with Blend Builder, the company announced Wednesday that it streamlined its workforce, positioning its customers and Blend for more efficient growth and value creation.
Blend’s fifth round of layoff affected 150 positions, about 19% of the company’s current onshore workforce and about 20 vacancies across the firm, according to its 10 Q filing with the SEC.
The company conducted three workforce reduction initiatives in 2022 and two in 2023.
“The restructuring initiatives are expected to reduce Blend’s operating expenses an additional $33 million on an annualized basis,” Amir Jafari, Blend’s new CFO, told analysts.
As of June 30, 2023, Blend has cash, cash equivalents, and marketable securities, including restricted cash, totaling $277.9 million with total debt outstanding of $225.0 million in the form of the company’s five-year term loan.
Going forward, Blend will be charging customers a recurring Software as a Service (SaaS) fee to increase the stability of its future cash flow.
Blend’s $25 million revolving line of credit remains undrawn.
“We are increasing the stability of our future cash flows by adding a recurring SaaS-like fee while retaining the upside associated with our consumption based model,” Jafari said. “We believe this shift in payment terms should improve our overall free cash flow with more fees being paid in advance.”
Despite the challenging mortgage environment, Blend reiterated its goal in reaching its non-GAAP profitability goal by 2024 from the originally planned timeline of 2025.
Since going public in July 2021, Blend is yet to turn a profit.
In Q3, the mortgage tech firm expects its Q3 revenue to be between $38 million and $42 million. Platform revenue is projected to post between $27 million and $30 million. Its title business revenue is forecast to come in between $11 million and $12 million.
The company estimates a non-GAAP net operating loss between $17.5 million and $15.5 million in Q3.
You know that old saying, “Every little bit helps.” Well, the opposite might also be true when it comes to home prices.
A new study from the National Association of Home Builders (NAHB) revealed that a mere $1,000 increase in the cost of a new, median-priced home prevents more than 200,000 prospective buyers from even making an offer.
The NAHB makes several assumptions to come up with that number. For example, they use a median national new home price of $275,000. Additionally, the buyer is only expected to put down 10%. And the maximum front-end DTI can’t exceed 28%.
Also, the mortgage rate used is 4.5% on a 30-year fixed mortgage. For the record, if any of these details change just a little, the math could be thrown completely out of whack.
And guess what, mortgage rates do change all the time, and not everyone has to pay private mortgage insurance. It also depends on the type of loan in question, among other things.
Still, of the nearly 118 million households in the United States, 206,269 wouldn’t be able to purchase a home that is $1,000 more expensive.
Texas the Most Priced Out State in the Nation
Of course, the impact depends on where the home is located. In places where homes are already mostly unaffordable, tacking on another $1,000 to the sales price will do very little, if anything.
But in places where prices are largely affordable, a seemingly small shift can force thousands to continue renting as opposed to buying.
Overall, Texas would be the hardest hit state, with 18,250 households no longer able to qualify for a mortgage based on a $1,000 increase to a median-priced home.
Of course, there are more than nine million households in the Lone Star State, so it’s not as bad as it sounds.
Conversely, only 313 households (of over 225k) in Wyoming would be affected by a $1,000 home price increase, making it the least vulnerable state in the nation.
In California, where the population is largest, only 14,423 households would be priced out because there are fewer affordable new homes to begin with.
At the metro level, the New York-Northern New Jersey-Long Island area would be most affected by a $1,000 price increase, with 5,742 households effectively priced out.
It’s followed by the Chicago-Joliet-Naperville, IL-IN-WI MSA, where 5,325 households would be priced out, despite having about half the number of households.
Same story here – nearly a third of all local households can afford new homes in the Chi-Town metro, whereas only 19% of households in the New-York area can qualify for new home mortgages before any price hikes are even factored in.
Similar pricing out can be seen in places like Atlanta, Baltimore, Houston, and Las Vegas.
In Napa, California, where less than 15% of all households can afford a median-priced new home, only 18 households would be priced out.
By the way, the purpose of the study seems to be driven by the NAHB’s distaste for regulatory fees, which they claim are passed onto the consumer. For example, every $833 increase in cost (permits, impact fees) results in a $1,000 increase in home price.
And their research shows regulations imposed by the government account for 25% of the final price of a newly-built single-family home.
In reality, there are all always plenty of options to qualify for a mortgage, even if the numbers are really tight. Shopping around to get your interest rate and closing costs lower can make much more of an impact than a $1,000 home price increase.
From BLS: The Consumer Price Index for All Urban Consumers (CPI-U) rose 0.2 percent in July on a seasonally adjusted basis, the same increase as in June, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all-items index increased 3.2 percent before seasonal adjustment.
However, once you strip out rent — which is what the Fed has told us they want to focus on because of the lag in rent data — the growth rate of inflation is falling more noticeably. The Fed is focused on core service inflation less shelter.If you take CPI data in total and subtract the shelter data, inflation data has collapsed.
90% of the inflation growth came from the shelter data, which we know needs to catch up to the reality that the data line below is much lower in real terms.
How can this lead to a 2024 pivot if we don’t have a job-loss recession? This is a good question, as I am not a Fed pivot person until the labor market breaks. For me that means jobless claims data gets above 323,000 on the four-week moving average. Today we did see a spike in claims data. However, the four-week moving average is still 231,000, far from my Fed pivot level.
So why would we see a Fed pivot if labor is still good? In a recent interview with the New York Times, the Fed mentioned something that can set the groundwork for the Fed to cut rates without a job-loss recession. They talked about real yields being restrictive. A simple way to think about this is that with inflation falling and rates up as much as they are now, the Fed believes their Fed Funds rate is at restrictive levels currently.
At first, that could make it sound like they don’t want to hike again. However, if the growth rate of inflation falls even more, then the Fed can change its tune in 2024, even cutting rates next year to make policy less restrictive.
Of course, economic data matters here; if the economy picks up steam and inflation picks up again, this variable changes. However, if the labor market weakens, they have given the marketplace a signal that fed rate cuts will happen. Even if the labor market stays firm, cuts could happen next year if inflation’s growth rate falls. This doesn’t mean we will see massive rate cuts soon, but it does lay the foundation for a less hawkish Fed going into 2024.
So far the bond market has had a mild response to today’s data. Even with the weaker jobless claims data, we haven’t seen any significant moves this morning. As of this second, the 10-year yield is at 4%.
My 2023 forecast range for the 10-year yield was 3.21%-4.25%, meaning mortgage rates between 5.75%-7.25% for 2023, and that the labor market would be the big driver on bond yields, not inflation. As we can see in the chart above, the growth rate of inflation has fallen, but bond yields are near the highs, not the lows. The economy has stayed firm, and labor hasn’t broken. So far in 2023, my premise of bond yields and labor has held as the economy has stayed firm.
The inflation report was slightly better than expected: we see how much rent inflation now holds up the core side of the CPI data. However, I believe the more critical storyline here isn’t the inflation report today, it’s what it can mean next year if this trend continues. I discuss this topic with HousingWire Editor in Chief Sarah Wheeler on today’s HousingWire Daily podcast.
One of my economic themes over the past year is that you don’t need a job-loss recession to have the growth rate of inflation fall — this isn’t the 1970s. We had a global pandemic, and historically global pandemics are very inflationary early on and then things get better over time. I hope the Fed sticks to this theme for next year and that we don’t need jobless claims to get worse for the Fed to pivot.
My wife — the NPR addict — pointed me to a Marketplace commentary by Amelia Tyagi. Tyagi says not to focus on small expenses, but to focus on big expenses. You can listen to the piece in RealAudio format from the NPR web site, or read this transcript:
Clip those coupons. Shift to that cheap, scratchy toilet paper. And whatever you do, don’t buy any more lattes at Starbucks.
You’ve heard it before. Some famous financial advisor, shaking his finger and telling you how all you have to do is save $5 a week and all your financial problems will disappear. Before you know it, you will be debt free, investment rich, and lighting cigars with Donald Trump.
Yeah, right. The bottom line is, the little stuff really doesn’t add up. Unless you live to be 500 years old, saving five bucks a week is not going to pay for a retirement home in Tahiti.
The real advice is that the big things add up. The fact is, one-third of Americans live in a house they can’t really afford. Even more of us drive a car we can’t afford. Fifty percent of us aren’t saving a single dollar for retirement, let alone the 10% of our salaries that most experts recommend. So clipping a few coupons isn’t going to build that nest egg.
If cutting the lattes isn’t going to fund a comfy retirement, why do we hear that old advice so much? Because it is easy. It is easier to pack a brown bag lunch than to sell your car. It is easier to give your husband a haircut at home than to move to a smaller apartment. And it is easier to boil your own beans than to sell your house.
But of course, just because it’s easy, doesn’t mean it’s right.
So the next time some expert shakes a finger at you for enjoying a lunch at an upscale restaurant, go ahead and roll your eyes.
Just try not to roll your eyes when it’s time to make the real money decisions.
Tyagi’s advice on big expenses is great. Some people spend so much time sweating the small stuff that they miss the big stuff. They’re penny wise and pound foolish, negating their daily scrimping and saving through stupid financial choices that burden them for years. (My wife told me yesterday of a co-worker who wants to sell his Ford Expedition, which he bought new last summer. The problem? He owes $43,000 on it but can only get $23,000 in trade-in. Ouch.)
But I don’t like Tyagi’s advice on the little stuff.
Her Marketplace piece is basically a condensed version of passages from her book All Your Worth: The Ultimate Lifetime Money Plan. Here’s a paragraph directly from the book’s first chapter — compare it to her opening sentences above:
We are […] not going to say that if you’ll just shift to generic toilet paper and put $5 a week in the bank, all your problems will instantly disappear. A few pennies here and a few pennies there, and the next thing you know, you will be debt-free, investment-rich, and lighting cigars with Donald Trump. Nope, we’re not selling that brand of snake oil.
The problem is: neither is anyone else. In Tyagi’s revised version of that paragraph, she makes a direct swipe at David Bach’s latte factor. What has she got against Bach? And what has she got against saving money? Yes, many people — including myself — advise you to exercise frugality, and warn you of the danger of small expenses, but nobody’s claiming that these are quick paths to wealth. They’re tools in a toolbox. When used in conjunction with other techniques, they can help you establish sound financial habits.
It turns out that Tyagi doesn’t have anything against saving money on the little things. In fact, she believes that some people need to cut the little expenses, which she terms Wants. She recommends a budget structured thusly: 50% of after-tax money spent on Needs, 30% on Wants, and 20% on Savings. She says that if any of these are out of balance, you’re not financially healthy. (Note that this is a refinement of the Andrew Tobias three-step budget.)
I’m reading All Your Worth for a future review here, and I like it (in fact, I love parts of it), but I don’t like the way Tyagi presented her condensed version on Marketplace.
Sure, give up the big things, but pay attention to the small stuff, too.
The Federal Reserve Chair, Jerome Powell, also played a role in shaping this change when he informed reporters that the central bank’s own economists no longer foresaw a recession. Despite an aggressive Federal Reserve tightening cycle, the US economy showed resilience this year, leading many on Wall Street to adjust their forecasts for the recession’s … [Read more…]
A rule change related to how America’s largest loan guarantors calculate upfront mortgage fees is set to take effect May 1.
Fees on new mortgages will become relatively cheaper for home loans backed by Fannie Mae and Freddie Mac. For borrowers with higher credit scores, the costs are generally increasing.
The updated fee structure means the costs will increase by as much as 0.75% for borrowers with higher credit scores. And for people with lower credit scores, the fees will decrease by as much as 2%.
For example, a buyer with a credit score of 650 putting a 25% down payment on a $400,000 home would now pay 1.5% in fees on the loan, or $4,500. That compares with 2.75%, or $8,250, under the previous fee structure.
Meanwhile, a borrower with a credit score of 750 who puts down 25% on a $400,000 home would now pay 0.375% in fees, or $1,125, compared with 0.250%, or $750, under the previous fee regime.
Why is this happening? In January, the Federal Housing Finance Agency, which oversees Fannie Mae and Freddie Mac, announced it wanted to make buying homes more affordable for people who are “limited by wealth or income” and to ensure “a level playing field” for sellers.
The agency updated its mortgage fee structure to accomplish that.
“FHFA is taking another step to ensure that [Fannie Mae and Freddie Mac] advance their mission of facilitating equitable and sustainable access to homeownership,” it said in the release.
Not everyone is happy about the newly adjusted fees. Some conservative-leaning commentators have criticized them as a subsidy from higher-income to lower-income borrowers.
Matt Graham, a co-founder of the mortgage news website MBSLive.net, said the FHFA has long engaged in that type of cross-subsidy program, especially since the Great Financial Crisis of 2007-08.
“It goes back to its affordable housing goal,” Graham said of the agency’s new fee structure. “If you only charged absolute, full-market rates, you would only have investment properties in a nation full of renters.”
Homeownership has only moved further out of reach for many people who have been shut out by rising interest rates and a low supply of available homes on the market.