Owning a home is a huge part of the American Dream and the first step for some to solidify their place in adulthood. In fact, a survey by Bankrate found that "owning a home is still very much a part of the "American Dream," as cited by 74% of U.S. adults. This is more than those who point to being able to retire (66%), having a successful career (60%), owning a car, truck, or other automobile (50%), having children (40%), and getting a college degree (35%)." Wells Fargo & Co. (WFC:NYSE) Bank of America Corp. (BAC:NYSE) JPMorgan Chase & Co (JPM:NYSE) UWM Holdings Corp. (UWMC:NYSE) Rocket Companies Inc. (RKT:NYSE)
Still, most Americans are unable to buy a house outright, making mortgages a key part of achieving this height of American success.
Homebuyers Looking for a Change
As with most things, mortgages come in two categories: There are the old long, held mortgages that have been around for generations and the new guys ushering in a new way to play the game of life.
Wells Fargo & Co. (WFC:NYSE) announced at the beginning of this year that it intended to scale back mortgages, but last year saw 143,000 loans at a value of US$79 billion.
Bank of America Corp. (BAC:NYSE) saw 121,000 loans at a value of US$54 billion.
JPMorgan Chase & Co (JPM:NYSE) saw 115,000 loans at a value of US$73 billion, with an average loan amount of US$631,000. While non-traditional lenders did make gains in 2021, traditional financial institutions won back some ground in 2022.
However, some non-bank lenders did manage to hold on to their advantages.
UWM Holdings Corp. (UWMC:NYSE) saw 348,000 loans with a value of US$127.5 billion. In third place was Loan Depot, with 156,000 loans with a value of US$53 billion.
Rocket Companies Inc. (RKT:NYSE) was the top mortgage lender in 2022, with 464,000 loans that generated a value of US$127.6 billion.
Also, recently, Rocket Mortgage announced financial results for the second quarter of 2023 (Q223). In Q223, Rocket reported net revenue of US$1.236 billion and adjusted revenue of US$1.002 billion. This exceeded the high end of the company's guidance range.
In light of this news, Rocket's Interim CEO Bill Emerson, said, "Rocket's performance in the second quarter demonstrates the strength of our business and our commitment to delivering superior client service through innovation."
It seems clear from these results that homebuyers are looking for change in the market. This may be partly due to the younger crowd gaining interest in home buying. 51.5% of millennials are homeowners as of this year.
This generation increased by 7 million homeowners over the last five years. This generation increased by 7 million homeowners over the last five years, but they are still behind Gen Z, who are becoming homeowners at higher rates than millennials were at the same ages.
Gen Z and Millenial homebuyers are more likely to gravitate toward mobile and online over traditional lenders. According to Chase's Digital Banking Attitudes Study, over 86% of Gen Z and 89% of millennials conduct their banking through apps. 61% of Gen Z and 71% of millennials use apps to transfer money. Managing money through online means is overwhelmingly popular with younger generations due to its convenience. This is where nontraditional lenders like Rocket Mortgage come in.
Beeline is Not Slowing Down
"While other mortgage lenders have been slumping, Beeline is gaining traction," wrote Guy Bennett in an article for Yahoo Finance. You can see this from this image from Beeline.
Beeline is also not stuck with just one type of loan. The company provides FHA, VA, and debt service coverage ratio (DSCR), bank statement, bridge, and fix-n-flip loans.
Bennett noted that "Beeline’s mix of home investors is about 300% higher than the national average." However, this is not the only thing the sets Beeline apart from other online mortgage companies.
Beeline: Standing Out From the Crowd With AI
Yet, Rocket Mortgage isn't the only innovative online mortgage lender in the ring. With the growing demand for more innovative mortgage lending services, Beeline decides to take things a step further and disrupt the mortgage industry by providing a new model for consumers.
On April 13, 2013, Robinhood revolutionized the stock-buying industry by fractionalizing stocks. This allowed people who previously were excluded from the stock market into the industry and paved the way for younger generations to get involved. Beeline is now doing for mortgage what Robinhood did for the stock market.
Beeline stands out from the crowd because it has incorporated artificial intelligence into its services with its chatbot, Bob. According to Jay Stockwell, who is in charge of Bob, "It's not too difficult to write a prompt for a chatbot to ask a set of questions to complete 1003. But to build a virtual AI department that navigates a customer's personal financial context and can switch from answering Beeline product questions to running pricing and then to pre-populating and completing an application requires a more sophisticated 'ensemble approach.'
"While other mortgage lenders have been slumping, Beeline is gaining traction," wrote Guy Bennett in an article for Yahoo Finance. You can see this from this image from Beeline.
This will build Beeline more differentiation from others who can build a prompt, but not a complete AI platform," Bob also connects to a larger database called The Beeline Brain: "The Brain allows the LLM [large language model] to instantly respond to almost any Beeline-related question through a conversational interface — with Beeline’s signature twist of irreverence and playfulness."
There are several features that make it attractive to consumers, which are available through its customer portal. It generates its own leads directly instead of buying from aggregators; it has a fully immersive, mobile-friendly, and highly converting proprietary POS experience, pull asset, income, bank statements, and payroll that it uses to generate real-time approvals for customers. 95% of these approvals reach closing. The in-house platform takes customers from Clear to Close on titles at the moment without having to go to land records for 60% of all refinancings.
By June 1, the company hopes to improve the AI system so that it is able to answer complex queries and give detailed quotes at all hours.
"Bob never sleeps," the company noted, "he's busy answering surprisingly complicated questions about Beeline's wide range of conventional and non-QM products with great speed and accuracy, even at 2 am. He then poses highly personalized product-specific questions to generate a quote in real-time.
Ownership and Share Structure
Beeline is a private company. The largest shareholder is Nick Liuzza, who has US$10 million invested in Beeline. Cavalry Fund, Ellington and Atalaya are all Series A investors.
In 2021, Beeline made a total of 1,202 loans and brought in a total of 6,943 net loan revenues and 961 net title revenues, adding up to a net total of 7904. Its total OPEX was 17,919. The full data from 2022 has yet to be released, but the company made a total of 863 loans and brought in 6,767 total revenues and 13,799 total OPEX.
The company's budget for 2023 is 1,110 loans, 5,994 net loan revenues, and 1,856 net title revenues. The forecast for 2024 is 2,923 loans, 23,969 net loan revenues, and 5,737 net title revenues for a total of 29,705 total net revenues and 20,794 OPEX.
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- Beeline has a consulting relationship with an affiliate of Streetwise Reports, and pays a monthly consulting fee between US$8,000 and US$20,000.
- As of the date of this article, officers and/or employees of Streetwise Reports LLC (including members of their household) own securities of Beeline.
- Amanda Duvall ote this article for Streetwise Reports LLC and provides services to Streetwise Reports as an employee.
- The article does not constitute investment advice. Each reader is encouraged to consult with his or her individual financial professional. By opening this page, each reader accepts and agrees to Streetwise Reports' terms of use and full legal disclaimer. This article is not a solicitation for investment. Streetwise Reports does not render general or specific investment advice and the information on Streetwise Reports should not be considered a recommendation to buy or sell any security. Streetwise Reports does not endorse or recommend the business, products, services or securities of any company mentioned on Streetwise Reports.
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