real estate brokers

Apache is functioning normally

TPO and Correspondent, Non-Agency Best Ex, Verification; Equity Figures for Refis; STRATMOR on Customer Experience

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TPO and Correspondent, Non-Agency Best Ex, Verification; Equity Figures for Refis; STRATMOR on Customer Experience

By:
Rob Chrisman

Fri, Nov 17 2023, 11:13 AM

Talk can be humorous. “That lowdown scoundrel deserves to be kicked to death by a jackass, and I’m just the one to do it.” (Attributed to a congressional candidate in Texas.) Here in Dallas, mortgage talk is certainly wide-ranging and varied as there’s a lot going on out there as we head toward Thanksgiving week, including cost cutting, M&A, and Fair Lending. Today’s Rundown features Feliks Viner, VP of Capital Markets with First World Mortgage discussing rate volatility at 3PM ET. We have the Wall Street Journal story about the union between hoops and loans: “Mortgage King Wants the NBA Crown, Too.” Some housing industry observers may only think it was “only a flesh wound,” but the Realtors™ antitrust case decision in Missouri, coupled with other recent settlements and an onslaught of new cases, likely portend real changes for how homes are bought and sold in the US with the assistance of real estate brokers. Attorney Brian Levy, breaks it down and offers his view of the crumbling dam for buyer broker commissions and the Realtors’ control over local listings in his most recent Levy’s Mortgage Musings. (Today’s podcast can be found here, sponsored by LoanCare, the mortgage subservicer known for delivering superior customer experience through personalization and convenience. Its award-winning portfolio management tool, LoanCare Analytics, supports MSR investors with a focus on customer engagement, liquidity, and credit risk. Interview with Calque’s Chandra Srivastava on the inner workings of a mortgage marketing department and how companies justify ROI on marketing spend.)

Lender and Broker Software, Products, and Services

“Truv is saving Lenders 60-80 percent over competitors. That’s the savings of multiple full-time employees. For example, Compass Mortgage saved roughly 60 percent in verification costs and maintained their same conversion rate. “Truv has given us the ability to lower costs, all while speeding up the verification process and providing better employment data” said Justin Venhousen, COO, Compass Mortgage. Stop wasting money. Contact TRUV today to discuss how we can help you with your income, employment, insurance, and asset verifications.”

The Work Number® can help streamline processes and provide greater value to employment and income verification processes. Wider data coverage can help streamline lending processes. The Work Number is the largest commercial repository for consolidated income and employment data with access to 641 million instantly returned records, updated each pay cycle, provided directly by employers and payroll providers, so there’s no need to collect an applicant’s private banking or payroll credentials, potentially exposing them and yourself to risk. Lenders and brokers have a choice: access The Work Number directly from Equifax OR through our pre-built integrations with over 60 Point of Sale (POS) and Loan Origination Systems (LOS). Not all methods for verification of income and employment are created equal. Discover why The Work Number is the leading choice for seamless, swift, and automated verifications.

In this market, hustle is everything. You can’t afford to waste a single deal, or a single minute. That’s why ReadyPrice has launched Shop, Lock, Deliver, an innovative platform designed to help independent mortgage brokers and their lenders save time and money. Now you can shop competitive loan offerings from multiple lenders, get rate lock guarantees in real time, receive underwriting findings, and deliver the borrower’s complete loan file to lenders, all on a single platform, at no cost to brokers. It’s already helping brokers around the country thrive and compete in the toughest market. Multiple lenders. One platform. Zero b.s. Come check us out today.

Join MAXEX at 2 p.m. ET on Thursday, December 7, for a special webinar on how the company is expanding its role as the cash window for the non-agency market. MAXEX’s multi-buyer-to-multi-seller exchange now provides more than 300 originators with access to more than 25 leading jumbo, non-QM, DSCR, Agency-eligible (NOO and 2nd Homes), and scratch & dent investors through a single clearinghouse. Join this event to learn about how MAXEX can help your business stay nimble and prepare for profitable, efficient growth in 2024.

Homebot is making a move towards an even more connected consumer experience through its launch of the Homebot Mobile App, allowing clients to connect with their trusted home advisors in a single tap right from their mobile device. With this announcement, every Homebot customer has the opportunity to engage their clients more deeply while generating more relationships with first-time homebuyers. See full story here.

Broker and Correspondent Products

Spring EQ Wholesale is now offering investment property HELOCs for 1st and 2nd lien positions! There is high demand for this product, and now is a great time to reach out to your clients who own investment properties and offer a way to access the equity in those homes. Need help with pricing? Click here to submit a scenario to Spring EQ’s team of Account Executives. Don’t forget, with Spring EQ you can earn up to 2.5 percent in traditional broker compensation on HELOCs and HELOANs. Looking for new opportunities in the mortgage space? We’d love to speak with you! Explore our job postings and come join our growing team of fun and experienced mortgage professionals! At Spring EQ our primary focus is second mortgages. So, think of us first for all your seconds. Become a partner now or contact your Account Executive to learn more.

“Now is the perfect time to align yourself with a top-tier correspondent partner like Newrez Correspondent. How are you going to meet and exceed your 2024 goals in this challenging market? By choosing a partner with the strength, size, and quality of Newrez. We provide competitive pricing, an expansive product line and an unwavering commitment to service. Don’t take it from us. Visit our website to read what our valued clients have to say. More reasons? We offer multiple affordable lending options, a comprehensive monthly client training calendar and access to marketing materials you can customize on The Marketplace by Newrez. Non delegated/Non-QM product availability with access to LoanNEX (pricing and product eligibility platform). Contact your RSM to learn more by clicking here. At Newrez, there is much to be thankful for: our team, our clients, and our families. Wishing you and yours a safe and Happy Thanksgiving.”

What if you had a powerful tool that could help you close your purchase pipeline at four times the rate? Rocket Pro TPO’s Verified Approval (VAL) goes beyond typical pre-approvals by providing a fully underwritten solution that includes a review of your client’s credit, income, and assets. As a result, you will realize the benefit of more committed clients with a clear picture of affordability and the confidence to start shopping. And partners can rely on fast Verified Approval reviews to jump start the purchase process: VALs are available to partners from their portal in as little as 24 hours after the request. Plus, clients using a VAL have the option to lock their rate before finding their new home! Interested in learning more about a Broker or Non-Delegated Correspondent partnership? Contact Rocket Pro TPO to learn more.

STRATMOR on Customer Relationships

What if our response to the prolonged market downturn was less about waiting it out, and more about learning and improving? What if we became learners and doers, not just survivors? In his November Customer Experience Tip, STRATMOR CX Director Mike Seminari talks about the need for being active in the downtime, building relationships, gaining product knowledge, reading books and listening to podcasts, always in pursuit of self-betterment and excellence in customer care. He shares three lessons that 2023 has taught us and how we can parlay them into success in 2024. Check out, “Top Three CX Lessons That Will Drive 2024 Success.”

M&A is not Lender-Exlusive

Lenders are not the only ones in our biz with shrinking balance sheets, competitive pressures, and owners looking at strategic alternatives to battling it out every day.

Stavvy, a fintech firm specializing in digital and remote collaboration for lending and real estate companies, acquired SigniaDocuments, a technology suite from Texas-based lender Evolve Mortgage Services. “Stavvy will acquire assets, including eClosing tools, eNote and eVault services, eRegistry capabilities for agency and non-agency loans and SigniaDocuments’ SMART Doc technology – a data-driven electronic document engine.” Stavvy will offer eNote, SMART Doc disclosures and loan documents for all 50 states across all loan programs and Evolve’s Charlie Epperson and Tim Anderson will join Stavvy as chief product officer and EVP of digital mortgage strategy, respectively. Recall that in August, Stavvy acquired digital mortgage servicing tech firm Brace to provide a streamlined platform for mortgage servicers and homeowners.

Equity and the Future of Refinance

A report from ATTOM shows that in Q3 2023, fewer homes were equity-rich, meaning their loan balances were less than half of their market values. The share of equity rich mortgaged homes was 47.4 percent. This is a drop from 49.2 percent in Q2 2023, making it the largest quarterly decline since 2019. The decline in equity-rich properties happened despite recent home value rebounds. That said, the percentage of seriously underwater mortgaged homes continued to improve. Only 2.5 percent were considered seriously underwater in Q3 2023. That’s the lowest point in the past four years. It’s down from 1 in 36 homes in Q2 2023 and 1 in 35 homes in Q3 2022.

Elliot F. Eisenberg, Ph.D. writes, “As of 9/23, the percentage of home mortgage holders with negative equity is just 383,000 or 0.7 percent, less than half the percentage prior to Covid and prior to the Housing Bust. The percentage peaked in 2009 at 30 percent. Currently, the city with the highest percentage of underwater mortgage holders is Austin at 2.1 percent, because prices are 14 percent off 2022 peaks, followed by Las Vegas at 1.7% and Phoenix at 1.6 percent.”

Capital Markets

Have you stopped your spending? Inflationary price tags, high interest rates and the return of student loan payments were thought to prompt many Americans to hold back on opening their wallets, but that doesn’t appear to be the case. A strong labor market has helped keep spending afloat across the economy, with new revisions even showing that the blowout retail reports from the summer were even better than initially estimated. Those trends are expected to continue with Black Friday only a week away, followed by the traditional holiday spending spree.

But as the fabled “soft landing” for the U.S. economy comes more and more into focus, we have seen mortgage rates and other bond yields drop as of late. Yesterday morning’s batch of data showed a larger than expected increase in weekly jobless claims coupled with a two-year high in continuing claims, fitting the Fed’s preferred script of seeing some softening in the labor market. Initial claims are at their highest levels since August and continuing jobless claims are at their highest level since November 2021. Export prices were down 1.1 percent month-over-month in October and down 4.9 percent year-over-year. Import prices were down 0.8 percent month-over-month and down 2.0 percent year-over-year. And total industrial production declined 0.6 percent month-over-month in October while the capacity utilization rate fell to 78.9 percent, though all figures were adversely affected by the UAW strike. Today’s calendar kicked off with housing starts and building permits for October (+1.9 percent and +1.1 percent, respectively). As has been the case all week, there are plenty of Fed speakers, and today features Boston President Collins, Vice Chair for Supervision Barr, San Francisco President Daly, and Chicago President Goolsbee. Today is also 48-hour notification for Class D MBS. We begin the day with Agency MBS prices better by .125-.250 and the 10-year yielding 4.40 after closing yesterday at 4.45 percent.

Employment

“If you are looking for a lifeline to save your people and your business in this challenging rate environment, you have an opportunity to partner with a well-capitalized independent mortgage company with over 40 years of experience. We offer a portfolio product line that gives our origination team the opportunity to quote unique scenarios for DPA, 2nd liens, ARMs, non-owner, Jumbo, Doctor/Professional, and more. Our proprietary coaching program is free to all Loan Officers. Even in this market, we’ve doubled-down on the support we provide, from a dollar-for-dollar marketing match to in-house creative & design services, video marketing, social media, training, and credit services. With unmatched operations support at the branch and corporate levels, your clients and referral partners will be more than impressed. Our company is Fannie and Freddie seller/servicer, FHA, VA, and USDA approved. For a confidential conversation, please contact Anjelica Nixt and mention this opportunity.”

“It’s all part of the Plan! Operating as MWF Home Loans in Tennessee, Mountain West Financial is continuing our expansion plans in Tennessee. Throughout this year, we have continued our growth with recent launches in North Carolina, South Carolina, Florida, and several other states east of Texas. The expansion is part of our overall growth strategy to expand our footprint. EVP and Board member, Ben Holloway has relocated to Tennessee in an effort to help drive our expansion. For more information about our growth plans and career opportunities, contact Ed Adams or Ben Holloway. Or visit us here for more information.”

“At Evergreen Home Loans™, we’ve always believed in supporting our associates and team members in their commitment to local causes. With the establishment of the Evergreen Cares Foundation, we’ve provided a powerful tool to help them do just that. The Evergreen Cares Foundation is our way of enabling our team to make a difference in the community. Whether it’s addressing hunger, promoting education, or providing assistance during crises, this foundation reflects our dedication to community well-being. Our associates are passionate about giving back, and this foundation allows them to channel their energy and resources toward causes they care deeply about. By doing so, we strengthen our community and embody our core values of empathy and support. Learn more about the Evergreen Cares Foundation and the remarkable impact it’s making. Together, we can build a brighter future for everyone.”

“Explore Spring EQ’s job postings and come join our growing team of fun and experienced mortgage professionals! At Spring EQ our primary focus is second mortgages.”

 Download our mobile app to get alerts for Rob Chrisman’s Commentary.

Source: mortgagenewsdaily.com

Apache is functioning normally

Intercontinental Exchange (ICE) Mortgage Technology reported an adjusted operating income of $131 million in the third quarter of 2023, up from Q3 2022’s $126 million — despite the headwinds the mortgage industry is facing.

ICE attributed “an analog to digital conversion occurring in the U.S. residential mortgage industry” for its mortgage business outperforming in Q3 even as the industry experienced a nearly 20% decline in origination volumes. 

Strong sales in its Encompass loan origination system, as well as its mortgage servicing platform (MSP) solutions business, drove an improved adjusted operating income for the mortgage technology division at ICE.

In Q3, about 60% of existing Encompass customers that were due for a renewal increased their base subscriptions. ICE expects to have its second-best year for MSP sales since 2017.

“Through October, we have already surpassed our prior full year record for new Encompass sales, which was set in 2020. In our servicing solutions business, the closing of the Black Knight transaction has unlocked the pipeline with four new MSP customers signed in October alone,” Warren Gardiner, chief financial officer of ICE, told analysts in its Q3 earnings call. 

Since ICE completed its acquisition of Black Knight in September, M&T Bank has become a new customer of Encompass, replacing its existing loan origination platform and adding ICE’s data and document automation platform.

ICE also cross-sold MSP and several data and analytics products to Fifth Third Bank, an existing customer of ICE, Ben Jackson, president of ICE and chair of ICE Mortgage Technology, noted.

ICE said it doesn’t anticipate any negative impact to its Encompass business from the recent commission lawsuits if homebuyers use fewer real estate agents which, in turn, could result in loan officers losing their largest referral pipeline.

“We don’t have a business of selling leads to real estate brokers and the like. For us, our core businesses are all in and around the origination transaction itself,” Jackson told analysts. 

“If anything, all of the data and analytics offerings that we have that underpin this overall platform, front to back both between ICE Mortgage Technology assets that we’ve had historically, as well as the data assets that have come with the Black Knight business, all position us very well in that space going forward,” Jackson added. 

The mortgage technology division at ICE posted $330 million in total revenue in the third quarter, up about 19.6% from Q3 2022’s $276 million. 

Adjusted operating expenses posted $199 million in Q3 2023, up about 32.7% from $150 million in the same period a year ago.

Looking ahead to Q4 2023, ICE expects near-term cyclical headwinds in the mortgage industry to persist. 

“Coupled with typical seasonal pressures on origination volumes in the first and fourth quarters of each year, we expect the total fourth quarter ICE Mortgage Technology (IMT) revenues will be in the range of $490 million to $500 million, bringing full year pro forma IMT revenues to approximately $2.06 billion,” Gardiner said. 

Source: housingwire.com

Apache is functioning normally

In addition to discussing Zillow’s financial results and the continual evolution of its Housing Super App vision on its third quarter earnings call, CEO Rich Barton and Zillow executives took time to address the elephant in the room: the verdict of the Sitzer/Burnett commission lawsuit.

While the industry has yet to find out what Judge Stephen Bough’s injunction will say and the three defendants, the National Association of Realtors, Keller Williams and HomeServices of America, have vowed to appeal the decision, Barton believes his firm will thrive regardless the outcome.

In his remarks about the suit, Barton said Zillow is a strong supporter of free, fair and transparent access to real estate information, independent representation, and transparent and negotiable agent commissions.

“From where we stand it seems clear that these principles are in the best interest of mover consumers, agents and the industry as a whole,” Barton said. “We expect industry changes resulting from this lawsuit or ones like it will involve commission transparency and negotiability provisions similar to those seen in several of the settlement the plaintiffs entered into with other real estate franchisors in advance of the trial.”

Barton also told listeners that Zillow believes complete disruption to the existence of buyer’s agents is improbable, as the firm believes it is important for buyers to have someone looking after their interests in the homebuyer transaction. However, if buyer’s agency does disappear, Zillow is considering models where the U.S. market transitions to one where one or two large listing portals offer pay-to-play inclusion on a digital listings marketplace.

“In this scenario, Zillow would be an odds on favorite to become the leading digital listings marketplace, given our brand, traffic, engagement and our unique focus on solving movers real pain points,” Barton said.

Despite what Barton believes would be an advantage for his firm, he said Zillow is not advocating for this to happen.

“We believe the pay-to-play marketplace is a step backwards for consumers and the industry as a whole and we very much like our position and growth plan in a market structure the continually evolves towards our principles of access, independence and transparency,” he said.

Zillow’s financial results

Despite a slower residential housing market environment caused by rising mortgage rates and low housing inventory, Zillow Group still managed to record an annual increase in revenue in the third quarter of 2023.

The real estate behemoth recorded $496 million in revenue, an increase of 3% year over year. The firm’s residential sector was responsible for $392 million of the overall revenue. The sector’s revenue for the quarter was down 3% annually, which Zillow executives were pleased with given the macro environment.

Zillow was also pleased with the performance of its mortgage sector, Zillow Home Loans, which reported an 88% year-over-year increase in purchase loan origination volume for the quarter. Even with this massive increase, Zillow Home Loans still recorded an 8% annual decline in mortgage revenue to just $24 million.

The firm’s mixed bag of revenue results garnered Zillow a net loss of $28 million for the quarter, which represents an improvement over the $53 million net loss it reported in Q3 2022.

“Today we are focused on delivering the Housing Super App, a tech enabled end-to-end platform with products and services that make it easier for people to move,” Barton told investors and analysts listening to the firm’s Q3 2023 earnings call Wednesday evening. “You’ve heard me say many times that 2023 is crucial for Zillow. It’s a year of execution as we prepare to scale in 2024 and 2025. We are very pleased with what we’ve accomplished today.”

While much of the call was given over to discussion of the Sitzer/Burnett suit, to which Zillow is not a party, none of the call featured discussions of the REX Real Estate false advertising lawsuit, in which Zillow, the only defendant, emerged triumphantly less than a month ago.

Originally filed by REX in March 2021, against Zillow and NAR, the lawsuit alleged that changes made to Zillow’s website “unfairly hides certain listings, shrinking their exposure and diminishing competition among real estate brokers.”

Despite the verdict, it does not appear that Zillow’s legal battle with REX is over. On Tuesday, the now defunct discount brokerage, filed a motion seeking a new trial.

In the motion, REX claimed that during the initial trial the court “gave an improper and case dispositive affirmative defense instruction on REX’s claim under the Washington Consumer Protection Act.”

REX claims that this enabled Zillow to “improperly escape liability for knowingly creating a deceptive and unfair web site by simply convincing the jury that it benefitted from doing so.”

Source: housingwire.com

Apache is functioning normally

Intercontinental Exchange (ICE) Mortgage Technology reported an adjusted operating income of $131 million in the third quarter of 2023, up from Q3 2022’s $126 million — despite the headwinds the mortgage industry is facing.

ICE attributed “an analog to digital conversion occurring in the U.S. residential mortgage industry” for its mortgage business outperforming in Q3 even as the industry experienced a nearly 20% decline in origination volumes. 

Strong sales in its Encompass loan origination system, as well as its mortgage servicing platform (MSP) solutions business, drove an improved adjusted operating income for the mortgage technology division at ICE.

In Q3, about 60% of existing Encompass customers that were due for a renewal increased their base subscriptions. ICE expects to have its second-best year for MSP sales since 2017.

“Through October, we have already surpassed our prior full year record for new Encompass sales, which was set in 2020. In our servicing solutions business, the closing of the Black Knight transaction has unlocked the pipeline with four new MSP customers signed in October alone,” Warren Gardiner, chief financial officer of ICE, told analysts in its Q3 earnings call. 

Since ICE completed its acquisition of Black Knight in September, M&T Bank has become a new customer of Encompass, replacing its existing loan origination platform and adding ICE’s data and document automation platform.

ICE also cross-sold MSP and several data and analytics products to Fifth Third Bank, an existing customer of ICE, Ben Jackson, president of ICE and chair of ICE Mortgage Technology, noted.

ICE said it doesn’t anticipate any negative impact to its Encompass business from the recent commission lawsuits if homebuyers use fewer real estate agents which, in turn, could result in loan officers losing their largest referral pipeline.

“We don’t have a business of selling leads to real estate brokers and the like. For us, our core businesses are all in and around the origination transaction itself,” Jackson told analysts. 

“If anything, all of the data and analytics offerings that we have that underpin this overall platform, front to back both between ICE Mortgage Technology assets that we’ve had historically, as well as the data assets that have come with the Black Knight business, all position us very well in that space going forward,” Jackson added. 

The mortgage technology division at ICE posted $330 million in total revenue in the third quarter, up about 19.6% from Q3 2022’s $276 million. 

Adjusted operating expenses posted $199 million in Q3 2023, up about 32.7% from $150 million in the same period a year ago.

Looking ahead to Q4 2023, ICE expects near-term cyclical headwinds in the mortgage industry to persist. 

“Coupled with typical seasonal pressures on origination volumes in the first and fourth quarters of each year, we expect the total fourth quarter ICE Mortgage Technology (IMT) revenues will be in the range of $490 million to $500 million, bringing full year pro forma IMT revenues to approximately $2.06 billion,” Gardiner said. 

Source: housingwire.com

Apache is functioning normally

Apache is functioning normally

A class action lawsuit has been certified by a Maryland federal court against Home Point for alleged Real Estate Settlement Procedures Act violations stemming from a decade ago. 

The suit claims Home Point acquired a company in 2015 that was already involved in a kickback arrangement with a title company, but these practices continued a few years after the company was purchased.

RESPA violations at first occurred between Maverick Funding Corporation and All Star Title, a now-defunct title and settlement services company, the suit says. Maverick purportedly referred residential mortgage loans to the title company in exchange for payments that were then laundered through third-party marketing companies, per the suit. 

The arrangement, which went on from 2014 to 2016, resulted in Home Point receiving “thousands of dollars in kickbacks from All Star Title in exchange for assigning and referring 444 loans,” the suit claims. The certification was first reported on by Law360.

To fund the kickbacks, plaintiffs allege that the now defunct lender and All Star Title “charged Home Point borrowers fraudulent and unnecessarily increased charges for title and settlement services.”

Mr.Cooper, which acquired Home Point earlier this year, declined to comment.

The class action is represented by plaintiffs Sandra Moyer, Richard Martin, Terry Patterson, Jr., and Yvonne Matthews on behalf of similarly situated individuals. 

The defendant in turn filed a motion questioning evidence the plaintiffs presented to the judge to be granted class certification.

The motion points out that the class action relies on certain email chains that “do not involve Home Point at all, but instead involve the relationships between All Star Title, Inc. (“All Star”) and two entirely different lenders.” This, in Home Point’s opinion, provides no foundation for class certification, nor does this amount to any kind of confession.

The lender also argues that the class relied on a previous RESPA case involving a bank and All Star Title – Brasko v. Howard Bank – for the certification, which ” involved different facts, different evidence, and a different lender” making it moot  and not relevant in this case. 

Specifically, the defendant argues the plaintiffs failed to show evidence of communication between Home Point and All Star, wherein in Brasko V. Howard Bank, there was proof.

RESPA violations and kickback schemes are under the watchful purview of the Consumer Financial Protection Bureau, which seems to have ratcheted up its enforcement efforts.

Most recently, Freedom Mortgage was accused of such practices and fined $1.75 million for allegedly providing illegal incentives to real estate brokers and agents, such as cash payments, paid subscription services, and catered parties, with the understanding purchase business would be sent its way in return.

Source: nationalmortgagenews.com

Apache is functioning normally

Apache is functioning normally

After nearly 10 days of trial proceedings, Zillow is ready for its years-long legal battle with REX Real Estate to be over. On Wednesday, just nine days after the long-awaited trial’s September 18 start date, the real estate behemoth file a motion for judgment as a matter of law in the U.S. District Court in Seattle hearing the trial.

A judgement as a matter of the law is permissible if there is no legally sufficient basis for a reasonable jury to find for the nonmoving party (in this instance, REX) on that issue.

Originally filed by REX in March 2021, against Zillow and the National Association of Realtors, the lawsuit alleges that changes made to Zillow’s website “unfairly hides certain listings, shrinking their exposure and diminishing competition among real estate brokers.”

Two months prior, in January 2021, Zillow began moving homes out of its initial search results for sellers who chose not to use agents adhering to the NAR and local multiple listing service (MLS) practices, creating a two-tab design for agent listings and “other listings.”

In January 2022, NAR filed a countersuit claiming that REX uses false advertising and misleading claims to deceive consumers in violation of the Lanham Act, but the countersuit was dismissed in late April 2022.

In mid-May 2022, REX ceased its brokerage operations. 

A little over a year later, in mid-June 2023, the three parties involved in the suit, all filed motions for summary judgment on at least some issues, if not the entire lawsuit.

While Judge Thomas Zilly dismissed REX’s antitrust claims against NAR and Zillow, he allowed the discount brokerage’s false advertising claim under the Lanham Act, and a claim for unfair or deceptive trade practices under Washington’s Consumer Protection Act (WCPA) to stand.

According to Zillow’s latest motion, since the start of the trial, REX has failed to produce sufficient evidence on either claim.

“The evidence REX promised would come at trial has not materialized, and the evidence introduced at trial falls short of what is required for multiple elements of these claims,” the motion reads. “Accordingly, REX’s claims should not be put to a jury, and the Court should enter judgment in Zillow’s favor as a matter of law under Federal Rule of Civil Procedure 50(a).”

In order to prove their Lanham Act claim, REX must identify particular statements made by Zillow and then show that they are false. According to earlier filings, REX highlighted Zillow’s tab labels separating types of listings as the statements it was challenging.

While Zillow acknowledged that the court determined that the tab labels are literally false, as REX employs agents who are realtor association members, “it has never has addressed whether the default status or two-tab display as a whole are false statements of fact,” which would be necessary to prove the Lanham Act claim.

“The non-communicative aspects of Zillow’s display—that merely divide listings and default one tab over the other—do not make any such claim,” the motion reads. “Indeed, design decisions that ‘limit [users’] access’ to materials are distinct from any ‘false statement.’”

In addition, for the Lanham Act to apply, the speech in question must be commercial speech, something Zillow claims the two-tab display is not.

“There is no evidence that Zillow intended to convey any particularized message with the default status or two-tab display or that the consumers who viewed these features took away any particular message,” the filing states. “Zillow is an ‘online database of information’ that provides ‘free, publicly available’ information that is ‘not transactional.’”

The motion also claims that “REX has not developed evidence that any aspect of Zillow’s two-tab display was meant to influence consumers to buy defendant’s goods or services,” and that there is “no evidence that a substantial part of Zillow’s audience was deceived by the default status or two-tab display.”

Finally, Zillow also states that that REX “has not even attempted to show injury flowing directly from the alleged deception caused by the distinct aspects of the two-tab display,” something that is necessary if REX hopes to be awarded damages.

“REX’s own fact witnesses did not offer any testimony supporting the notion that the labels, in particular, caused them harm,” the motion continues. “Moreover, the fact that there was an impact on for-sale-by-owner listings—listings that properly would be labeled as ‘Other listings’—shows it is not the labels that had this impact.”

Regarding the WCPA claim, Zillow states that all of the same reasons from the Lanham Act claim apply.

Zillow did not wish to comment and REX has not returned a request for comment.

Source: housingwire.com

Apache is functioning normally

Federal agencies urged mortgage companies and banks to be more vigilant in reporting compromised real estate transactions to their local financial crime units and to do so in specific ways that would increase the likelihood of an investigation.

According to representatives from both the Federal Bureau of Investigation and the Secret Service during a panel discussion Monday, instances of wire fraud, home equity theft, investment scams and elderly-related fraud have ticked up, while the methods used by bad actors have become more nuanced.

“[The mortgage industry is a target-rich audience for fraudsters] and they are targeting title companies and real estate brokers by compromising business email accounts. We see a lot of that,” said Stavros Nikolakakos, supervisory special agent at the Secret Service at the Compliance and Risk Management conference hosted by the Mortgage Bankers Association in Washington D.C. Monday. “If you don’t have direct contact information of your local law enforcement, [you should definitely establish that relationship].” 

A way for mortgage companies to help government agencies, such as the FBI and Secret Service, catch bad actors is by being mindful in how they fill out consumer complaints including the Internet Crime Complaint Center (IC3) form, which the bureau monitors and the Suspicious Activity Report (SAR) form.

“For those of you that enter SARS, I would strongly encourage you to not hold back in filling out this information, put your conclusion and the amount stolen at the very top,” Nikolakakos said. “When you have agents reviewing these SARS they only skim them. They cherry-pick because agents are looking for easy arrests and they’re trying to find the very best cases. “

Timothy Wu, Supervisory Special Agent, Financial Crimes Section, Money Laundering, Forfeiture, Bank Fraud Unit at the FBI, added that the volume of fraud complaints received can make someone’s “eyes start to glaze over.”

“Fraud in the mortgage space is not the same as in 2008 and our fraud portfolio is much smaller,” he added. “We are seeing HELOC fraud and application fraud — nothing new or ground breaking — but these practices have accelerated and gotten better.”

Cash attained by these criminal acts are usually transferred to Eastern Europe, West Africa or China by money mules, Nikolakakos added. 

Statistics published by the FBI show that business email compromise scams related to real estate set a record for dollar losses in 2022. The 2,284 complaints received last year amounted to losses totaling $446.1 million, compared with $430.5 million in 2021.

Those targeted by fraudsters have about 72 hours to report the event to the government before it becomes harder to investigate.

In a separate panel addressing fraud mitigation, Steve Safavi, vice president of mortgage fraud at Mr. Cooper noted that one of the best ways to prevent wire fraud is to be mindful of emails received prior to closing and the domain that is being used.

“As busy as you are at the end of the month, trying to get something funded it can get by,” he said. “Best thing to do is for title companies to call the lender and verify the wiring instructions. Have them repeat the payoff statement to you instead of vice versa.”

As fraud risk has increased, companies in the financial services sector have turned to vendors to protect their transactions and infrastructure. For example, recently Tata Consultancy Services announced a partnership with FundingShield to the fintech’s wire fraud prevention solutions available to the IT consulting company’s clients.

Source: nationalmortgagenews.com

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Are laundromats profitable? Or, are laundromats a dying business? Learn how much laundromats make and if laundromats are a good investment.

Are laundromats profitable? Is buying a laundromat a good investment?

Ever wondered if owning a laundromat is as profitable as people say?

I’ve been seeing a lot of videos on social media lately talking about how much money laundromats make (seems like it’s a popular small business idea right now!). So, I wanted to do my own research and learn as much as I could on the topic of laundromat businesses to see why it’s trending so much.

Whether you are looking to make extra income or if you plan on opening several laundromat businesses, there are some things to think about before you get started.

In today’s article, we’re going to talk about:

  • How profitable a laundromat can be
  • The pros and cons of owning a laundromat
  • Why a laundromat may be a smart investment
  • Tips on how to find a laundromat to buy

And more.

Quick summary: Yes, laundromats can be a way to make money (and even passive income!) due to people needing to wash their clothes and low costs to run. However, the amount of money that you can make is based on factors such as location and maintenance costs (new machines can be expensive!). High-quality laundromats with lots of amenities are in, and the old days of dirty and hot laundromats are not.

Are Laundromats Profitable?

Is owning a laundromat a good investment? Is owning a laundromat a good way to make money?

According to the Coin Laundry Association, there are around 35,000 laundromat businesses in the United States and nearly 95% of laundromats succeed.

That is a pretty good success rate.

It’s important to understand that, like with any other business, laundromats require an investment of money—both initial and ongoing. You’ve got your rent, machines (you will need more expensive commercial laundry equipment), utilities, and insurance.

The good news is, your income would hopefully be higher than these costs, making you a profit at the end of the month. Some people are able to run a laundromat as their full-time income, and for others it may simply be one of their side hustles.

The amount of money that you can make from a laundromat depends on your management skills, the location of your business (the average laundromat user lives within 1 mile of the laundromat that they use, so you want to be close to your customers!), and more.

Related content:

Is a Laundromat A Smart Investment? Do Laundromats Make Money?

This is a hard question to answer, as everyone is different!

For some people, a laundromat can be a smart investment, for others it may not be. The good thing, though, is that you are reading this article so that you can figure out if owning a laundromat is for you or not.

Yes, many laundromats make money. On average, a laundromat can earn a profit of around 20% to 30%.

Note: Before making a decision, I highly recommend reaching out to a financial advisor before making any decisions.

Factors Impacting A Laundromat’s Net Income

There are numerous things that can impact how much money a laundromat can make such as:

  • Location– The location of a laundromat is important in how much money you can make. This is because a laundromat located in a populated area often makes more money than one in a less populated area. The reason is, that when there are more people, there are more people likely to use laundromats.
  • Competition– If there are other laundromat businesses nearby, this could impact your profit because you now have competition. This is because too much competition may mean that there are less customers coming to your business.
  • Demographics– The demographics of people living around the area of your laundromat are important. For example, laundromats tend to do better in areas with a lot of renters, college students, or households without a washing machine or dryer (of course).

We recently stopped to use a laundromat while we were traveling in our RV. One thing we noticed was that this laundromat had a ton of amenities. Now that I’m thinking about it, this laundromat business owner was smart. They knew what their potential customer needed. They opened a laundromat right next to a popular cross-country trail, and added great amenities such as snacks and even a pay-to-use shower. These factors helped this laundromat stand apart from its competition and probably led to more people using it because it was a one-stop shop.

Some laundromats can earn profits as high as 35% or more! These are usually high-volume operations in urban areas with lots of people living nearby and they tend to offer a wider range of services such as wash-and-fold or dry-cleaning.

Owning a laundromat can be a smart investment for some people because they can possibly have a stable flow of income.

However, you will want to keep in mind that success in this type of business still depends on careful planning, an understanding of your local market, and more. Not everyone will succeed, of course.

How To Find Laundromats For Sale

Jumping into the laundromat business begins with finding a laundromat business that is for sale, or starting your own business from the ground up.

If you are looking for a laundromat business that already exists and is for sale, here are some tips and strategies for locating a laundromat for sale.

Online platforms– Many websites list laundromat businesses for sale. Examples include BizBuySell and LoopNet. These platforms can be your first stop so that you can easily look at laundromat listings. I was able to find many laundromats for sale, ranging from around $100,000 to over $1,000,000. These sites will give you a lot of information too, such as the revenue, monthly rent that the laundromat pays, the year it was started, and some background on the business.

Broker assistance– There are commercial real estate brokers with experience in the industry that can be invaluable resources. These individuals often have connections and insights that you may not have as an individual buyer. You may want to search for commercial real estate brokers in your local area and see who can help you find a laundromat business for sale.

Local advertisements– Sometimes laundromats are listed for sale in your local newspaper. You can see if there is a business for sale section in your local paper to get started.

Important Things To Think About When Purchasing A Laundromat

When you come across a potential laundromat to buy, here are some things to think about:

  • Location– As mentioned in the earlier sections, the location of a laundromat plays a very important role in if the laundromat will be successful or not.
  • Condition of equipment– Commercial laundry machines are expensive. These are not the washer and dryers that you have in the home you live in. These are meant to take a lot of loads and be running nearly all the time. Due to this, you will want to inspect the machines thoroughly and, if possible, have a professional technician check them. This is because broken or old machines could result in costly repair or replacement costs.
  • Business finances– If you find a laundromat that you are interested in, then you should ask to see their financial records and carefully review them.
  • Lease agreement– Many laundromats do not own the building that they are doing business from. Due to this, you will want to look at the terms of the lease. A laundromat with a long-term lease allows for longer operations without the risk of eviction or a sudden rent increase.
  • Demographics and competition– As you read in an earlier section, knowing more about the demographics of the local area, as well as about your laundromat competition, is important too.

Remember to approach this process with patience. Investing in a profitable laundromat is a journey that requires careful planning, research, and due diligence.

Owning A Laundromat

Operating a laundromat is more than just collecting coins from machines. There are maintenance needs, customer concerns, and potential unexpected issues that you may come across.

Below, I take you through the typical day-to-day operations of a laundromat.

Day-to-Day Operations Of A Laundromat

Opening up– Regular, reliable hours are important in the laundromat industry. Therefore, opening up the store in the early morning is always a good idea as many people like to get their laundry done first thing. Plus, many of your customers will be repeat clients, so making sure that you open up at the same time each day is required.

Machine maintenance and cleanliness– When running a laundromat, you will need to check on the washers and dryers, perform required maintenance, and make sure that your business is clean. You will also want to make sure you are well-stocked with detergents and fabric softener.

Customer service– While the average laundromat only has 2 employees or less, you will want to have good customer service. After all, a happy customer is far more likely to return and recommend your services to others.

Financial management– Collecting payments and record-keeping is something that is done every single day.

Tips on Managing a Profitable Laundromat

  • Sell extra services– Successful laundromats tend to sell many more services other than just self-service laundry. Due to this, you may want to also try diversifying your income streams so that you can make more money from your laundromat. You can sell other services such as wash-and-fold services, dry-cleaning, dog washing stations, showers, or even have vending machines.
  • Maintain your machines– Regularly maintaining your washer and dryer machines minimizes downtime and expensive repair costs, so that your laundromat can run smoothly.
  • Promote your business– Word of mouth is so important in this type of business, but don’t shy away from using social media or local advertising to draw in potential customers.

Running a money-making laundromat is much more than keeping the machines running. It involves good customer service, finding more services to sell, and marketing your laundromat business.

Frequently Asked Questions About Laundromats

Here are common questions about owning a laundromat.

How much profit can you make from a laundromat? How much do laundromat business owners make?

The profits from laundromats vary depending on location, operation expenses, size of the laundromat, the amenities you sell, and more. The average laundromat business sees a profit margin of around 20% and 30%.

The national average income for self-serve laundromats ranges between $15,000 to $200,000 per year. As you can see, that is a wide range and that is because it just depends on so many different things.

What are the pros and cons of owning a laundromat?

Like with any business, there are positives and negatives. Owning a laundromat isn’t for everyone.

Owning a self-service laundromat can earn you money and can be a stable, low-risk investment with low operating costs. It can be a fairly passive income stream as well, as you don’t need many employees (the average laundromat has 2 or fewer employees). However, running a laundromat isn’t all easy, there are challenges such as high start-up costs, machines braking, and more.

The challenges of running a laundromat include that high-quality commercial laundry machines can be quite expensive and purchasing or leasing a location with enough space for machines and customers can be a significant portion of startup costs. Also, wear and tear is going to happen in a laundromat as machines get constant use, and the cost of repairing or replacing machines can add up.

Is owning a laundromat a smart investment? Is owning a laundromat worth it?

Owning a laundromat can be a smart investment, and it can be worth it for some people. But, it will cost you money.

It costs around $100,000 to $300,000 to start a laundromat. Starting or buying a laundromat can be high, but it can also earn you a steady income. But, that doesn’t mean that it’s a smart investment for everyone. There are many factors that go into running a successful laundromat.

How to find laundromats for sale?

You can find laundromats for sale through websites, commercial real estate agents, or business brokers. You can also network with existing laundromat owners or associations who can provide insights into potential sale opportunities.

Are laundromats a dying business?

The laundromat business has changed over the years, but they are still very much needed. People use laundry facilities all the time, including myself such as when I am traveling in my RV or boat. Everyone needs to wash their clothes.

There are ways to keep your business up to date, such as having a laundromat that accepts different methods (such as credit card and cash), having a drop-off service, and making your facility comfortable (such as with WI-FI, TV, beverages, etc.).

What are the key success factors for running a laundromat?

Successfully running a laundromat depends on many factors like the location, maintaining clean and well-functioning machines, providing good customer service, having amenities (such as air conditioning or head depending on the temperature, TVs, etc.), and more.

Are Laundromats Profitable? – Summary

I hope you enjoyed this article on whether buying a laundromat is a good investment or not.

Here’s a quick summary of what we learned above about this business venture:

  • Running a laundromat can be a way to make money, but it depends on many different factors.
  • Laundry businesses typically have low labor costs (they are fairly passive businesses with a lot amount of workers needed) and can be recession-proof.
  • Owning a laundromat does have cons and challenges, such as the fact that commercial laundry machines can be quite expensive if they need to be repaired or replaced.
  • There are many laundromats for sale and you can start your search online.
  • Running a successful laundromat business in today’s world will likely mean running a higher-quality business and selling amenities for additional fees.

In all, the profitability of owning a laundromat may make the challenges worth tackling. The average laundromat is changing and improving, and there can be room to make money with this small business.

So, what do you think? Are laundromats profitable? Are you interested in owning one?

*Statistics from Coin Laundry Association

Source: makingsenseofcents.com