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Xome Valuations; Email scammers; NYT mortgage misstep 😬

By September 7, 2021 No Comments

Mr. Cooper sells off a sizable chunk of XOME

Mr. Cooper is selling its Xome Valuations business to Canada-based Voxtur Analytics in a deal expected to close in the third quarter of 2021. Voxtur provides real estate technology and data to investors, lenders and servicers, according to its website. (Dallas Business Journal paywall.) 

And if you are wondering why Mr. Cooper is making this move consider this: In the second quarter of 2021, Mr. Cooper’s originations made a profit, Mt. Cooper’s servicing made a profit… Xome made a $4 million loss in pretax operating income (proof on slide 5). In the past year, Xome’s total revenue has dropped precipitously —-> see slide 25

“With this Acquisition, [Voxtur] achieves tremendous scalability in the valuation tech-enabled services space, with an opportunity to deploy its existing Anow SaaS platform to drive revenue growth,” said Voxtur CEO Jim Albertelli, in a statement

Terms of the deal were not disclosed. This is the third such transaction for Mr. Cooper this year. 

“This transaction is another example of how we are rationalizing and simplifying to focus on our core businesses, where we see tremendous opportunity for growth,” said Jay Bray, chairman and CEO of Mr. Cooper, in a different statement. “We are thankful to the valuations team for their contributions to the organization, and we will work closely with Voxtur to ensure a smooth transition for our team members and clients.”

The sale of Xome Valuations comes on the heels of two other recent sell-offs by the company. In July, the company sold its reverse mortgage servicing portfolio to Mortgage Assets Management LLC and its affiliates. Before that, the company sold its title business in a $500 million deal with Blend Labs Inc., a digital lending software provider.

The company also announced a spate of recent executive appointments and has been on a hiring spree, adding more than 5,000 people last year — including 1,000 locally. Low mortgage rates have buoyed the company, which reported a total net income of $439 million in the second quarter of 2021.

🤣 MEME of the day 🤣

Have a funny meme? Email your favorite meme here for a chance to be featured in our next Rise&Shred.

Secret Service prevents $21 million real estate scam!!

Talk about your save of the day!

Just recently, the U.S. Secret Service Global Investigative OperationsCenter thwarted a real estate related Business Email Compromise that attempted to defraud a purchaser out of more than $21 million dollars.

The Secret Service worked closely with private sector partners to identify the scheme that led to the transfer of funds into a fraudulent bank account. All funds were returned to the victim.

“The Secret Service continues to see a sharp rise in BEC incidents – both successful attacks and unsuccessful attempts – across all sectors of business and industry. The real estate industry, in particular, has seen a notable impact,” said the Secret Service in a statement.  

Here’s how it works. Homebuyer payments get intercepted through stolen confidential and contemporaneous information. Fraudsters then use a spoofed domain to send fraudulent wiring instructions to the home buyer. 

BEC schemes targeting home buyer payments affect individual homebuyers, often first-time home buyers, and attempt to defraud the buyers out of a significant portion of life savings and personal wealth.  

Mortgage and loan payoff payments are being intercepted through fraudulent wire instructions inserted into the transaction process, and changes in payment information may not be confirmed or scrutinized by the parties involved. 

According to the Secret Service, here are numerous ways to prevent real estate Business Email Compromise schemes:

  • Update procedures to ensure proper verification of information before releasing funds.

  • Independently obtain mortgage payoff statements and confirm with verified and trusted sources.

  • Independently verify the authenticity of information included in correspondence and statements.

  • Enable Multi-Factor Authentication (MFA) on all email accounts.

  • Routinely change passwords.

  • Routinely monitor email account access, check for unauthorized email rules and forwarding settings.

  • Restrict wire transfers to known and previously verified accounts.

  • Pay using checks when the information cannot be independently verified.

🔥 Separate yourself from the pacl 🔥

With Josh Pitts & Joe Welu

NYTimes asks: Can buyers even afford to get a mortgage? Readers respond.

With the quick escalation of home prices during the pandemic, it’s become increasingly difficult to qualify for a typical mortgage. 

NAR’s national median sale price in Q2 2021 was $357,900, roughly 22 percent higher than a year earlier. At that price, an annual income of $68,032 would be required to qualify for a mortgage, with a monthly payment of $1,587.

The chart in this article (NYT paywall) illustrates what you’d need to earn in the 10 most affordable and 10 least affordable metros, and what your monthly loan payment would be in each.

To which point they asked: Can you still afford a mortgage? 

The reader’s comments were not exactly kind, but you kind of asked for it, NY Times.

However, some were very skeptical: “The calculation was based on the mortgage being no more than 28% of the buyer's gross income. That is extremely conservative. Most lenders will allow up to 38%. The higher percentage is doable, especially for upper-income households,” wrote one reader.

Others went so far as to suggest more unpopular alternatives: “America needs to throw $1 trillion into the construction of massive apartment complexes in, and adjacent major cities in the same manner as has been done in Singapore and even Moscow. if NIMBYs do not like it, they can sell their $3 million house and reinvest in a gated community in the suburbs.”

Finally one reader questions the entire study methodology: “I think that to judge mortgage costs accurately would require taking into account average income and the cost of the mortgage as a percentage of it. The analysis is in flat dollars, with no compensation for average salary nor cost of living, as if high salaries are as common in Pittsburgh as they are in San Jose. This is not to say that the cities with the lowest required income are not generally less expensive. just that average cost needs to be compared against average income for accuracy.”

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