Where Real Estate Gets Its Dirt

HouseCanary wins $706M in lawsuit

HouseCanary wins $706M after getting sued by Quicken Loans offshoot

“The jury agreed with HouseCanary that Title Source, as the Quicken Loans division was referred to in the case, failed to honor a software licensing contract and then used HouseCanary’s technology and trade secrets to try to construct its own version. Title Source had initially sued HouseCanary, alleging fraud and breach of contract over the software, but HouseCanary countered and won the huge sum.”

Great story. $706M represents 10 times the amount of HouseCanary’s initial funding. This case sounded vaugely familiar, then I recalled this other story…

Collateral Analytics sues Nationstar for allegedly stealing trade secrets

“Because there are no other products on the market with comparable accuracy, coverage, and functionality, (Nationstar and Xome) were unwilling to switch suppliers,” the lawsuit states. “And, because it literally takes decades of research and refinement (not to mention many millions of dollars) to make a product with the accuracy, coverage, and functionality that Collateral Analytics displays, Defendants were unable to develop their own.”

So, the lawsuit claims that Nationstar took matters into its own hands and stole Collateral Analytics trade secrets.”

Twinsies!

Xome parent company Nationstar (now Mr. Cooper) merging with WMIH Corp (formerly WaMu)

Ben Lane, reporting for HousingWire
Nationstar (aka Mr. Cooper) merging with WMIH Corp. in $3.8 billion deal

“According to the companies, $1.2 billion in cash is being made available to Nationstar shareholders who elect to take cash for their shares.

The value of the WMIH shares included in the deal is expected to be approximately $702 million.

Additionally, approximately $1.9 billion of Nationstar’s existing senior unsecured notes will be refinanced at closing.

That places the aggregate consideration for Nationstar at $3.8 billion, according to an investor presentation published as part of the deal.

Fortress, which was acquired late last year by SoftBank Group, a Japanese technology company, in a $3.3 billion deal, is cashing out roughly half of its Nationstar shares in the deal.

As stated above, Fortress currently owns approximately 68.1 million shares of Nationstar’s stock, or 71.06% of the company.

According to the details provided by Nationstar, Fortress has agreed to the deal and is taking cash for approximately 34 million of its shares.

That means that at $18 per share, Fortress will take away roughly $612 million in the deal and will maintain ownership of roughly half of its shares.

Per Fortress’ website, its initial outlay for Nationstar was $450 million.

Upon completion of the deal, Nationstar shareholders will own approximately 36% of the combined company and WMIH shareholders will own approximately 64%.

Just re-reading this makes my head hurt. Sound a bit “Foley-esque”, but maybe that’s giving them too much credit.

““So what happens next? In a lot of ways, it will be business as usual. Our jobs will be the same as they were yesterday,” Bray added. “Today marks another huge day in our company’s history. Please take a moment to think about how far we’ve come and how fortunate we are as a company. We’ve built something truly extraordinary at Mr. Cooper, and I have never been more excited for what’s to come.”

In an additional Q&A, the company provided more details about the deal, including stating that all Nationstar’s businesses, including Xome, are part of the deal.”

So Nationstar, now Mr. Cooper, sold red-Real Estate Digital to Constellation Software (owners of MarketLeader, Z57, Diverse Solutions, etc) to WMIH, formerly Washington Mutual. Something tells me there is more to this story.

Nationstar (parent company of Xome and Real Estate Digital) is rebranding itself to….

pets_puppet.giThe company who gave us the name, “XOME“, has outdone themselves.

I’m not sure how I missed this. Ben Lane at HousingWire has been doing a bit of sleuthing again and found out that Nationstar mortgage is rebranding itself to, wait for it…”Mr. Cooper“.

The first time I heard the name it reminded me of the website “Dr Koop“, drkoop.com. Remember that?

What’s next, a sock puppet?

Will Xome be rebranded?

Nice detective work from Ben Lane of HousingWire.com. In his article “Is Nationstar about to completely rebrand itself?” he finds this little tidbit on Nationstar’s job board.

“The look into Nationstar’s plans is actually found on a job posting on the company’s job board. The job? Content writer. And the posting provides a glimpse into Nationstar’s future.

Not exactly the traditional place to disclose company-shaping plans, right? But there it is, in black and white.

According the job posting, the successful candidate will join Nationstar’s marketing team and be a “key player in the company’s transformation from a large but little-known mortgage servicer to a highly visible full lifecycle real estate brand.”

But that’s not all. Nationstar apparently intends to transform itself into the mortgage industry’s first “go to” brand and potentially completely rebrand the entire company and all of its brands.”

Rebranding a stupid name is the least of Nationstar’s problems. It’s been a bumpy ride in 2015. The stock has tanked. The launch of XOME has been less than spectacular, to say the least, as MLS providers raised many questions on XOME’s use of IDX data. It appears that former wrecking ball CEO, Kal Raman, did so much damage he “resigned” after serving only a year.

As many of you know Nationstar bought Real Estate Digital (RED) back in late 2014. A lot of good people over there and they deserve better leadership. Let’s hope 2016 fares better for everyone involved.

Kal Raman, CEO of XOME, resigns.

Kal Raman resigns as CEO of Nationstar’s Xome

“Since joining Solutionstar last year, Raman oversaw the transformation of Solutionstar into Xome, through its launch in June. But now, just over one year after he took over Solutionstar, Raman is resigning.

Nationstar announced Raman’s resignation in a Monday filing with the Securities and Exchange Commission. In the SEC filing, Nationstar said that Raman resigned as president and CEO of Xome as of Nov. 23. No reason for Raman’s resignation is given,..”

That was Xuick.

Planes, trains, and Xomes

Interesting article in the New York Times (Seeking More Bookings, Airlines Limit Sites That Show Their Fares) about how some airlines are limiting the amount of data sent to Online Travel Agencies like Expedia, Trip Advisor, Etc.

Yes, I know that buying a house is not like buying an airline ticket but there are some crazy parallels here in regard to online real estate.

“A loyal Delta flier, he went to TripAdvisor, which lists flights from many airlines, to compare Delta’s price against those of its rivals. He hit a wall. “The fare wasn’t even there,” he said.

Indeed, Delta pulled that information from TripAdvisor last year. It did the same for a number of European online travel agencies this year, saying that they did not have permission to use its data.

Are there any Brokers/MLS taking out the price field in their feeds to any national listing portals?

“The more that the airlines can get the fliers to book on their own sites, the more opportunity the airlines have to engage with those travelers,” Mr. Quinby said.

In the industry, that is called the upsell. “Where a significant portion of Delta’s profits come from is ancillaries after you buy the basic transportation,” said Max Rayner, a partner at Hudson Crossing, a travel industry consulting company. “That’s one big reason for Delta to be hellbent on denying access.” Last quarter, for example, Delta’s extra revenue from everything from baggage fees to merchandising rose 27 percent — an extra $50 million.

Sounds a bit like XOME’s strategy.

It’s long been said that real estate broker’s don’t make any profits on commission but on the ancillary services it can offer pre and post sale (mortgage, title, etc.). So it’s only logical these new online brokerages (paper or not) got in to the game. While testing out XOME Mike Sparr made this observation.

Very smart. It’s all about the upsell baby!

XOME is what you were afraid Zillow would become

I had a short time to poke around the new XOME website before it started to force me to register. Here’a few short thoughts I had about the site, I might have more if and when and can get back on the site (apparently its still in beta).

1. This seems to be exactly what people feared Zillow would become. Or as Brad Inman calls it:

“… largest “paper brokerage” site ever.”

Good thing? Bad thing? I dunno.

2. Speaking of Zillow it looks like XOME took a lot of…how should I say..”inspirado” from Zillow. Check out the screen shots below of the listing results pages of both Zillow and XOME.

Zillow and Xome  550

3. XOME is just a terrible name. Think about it…

YOU: Have you looked at homes on XOME.com yet?
YOUR BUDDY: Zome? No. Z-O-M-E?
YOU: No, X-O-M-E. Like home but with an X instead of of an H.
YOUR BUDDY: What were we talking about?

4. Will the dogs eat it?

Do people want to search for home and are they ready to complete the buy/sell process entirely online? That’s the big bet Nationstar is making. My feeling is that they might get some traction in the investor community but (for now) real estate is still a “people business”. A room full of Realtors and the line of vendors standing in the back of the room will be tough to break.

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