Innovative Solutions for Risk Assessment and Loss Control in Insurance with Valkyrie Holmes, Founder and CEO of Faura

Nate Smoyer (00:01.623)
Ronak, welcome to the show.

Raunaq Singh (00:04.407)
Thank you so much for having me, Nate. It's a pleasure to be here.

Nate Smoyer (00:07.319)
I'm excited to have you. You were the first interview I'm having with someone calling in from a yardie we work. And I asked you earlier, how is it? Are there any discernible differences?

Raunaq Singh (00:18.615)
Yeah, there's no longer, you know, beer kegs or kombucha on every floor. It's actually now every alternating floor you get seltzer on one, coffee on the other and kombucha on another. So good times are gone, unfortunately here tonight.

Nate Smoyer (00:32.727)
But you know, maybe that actually increases the chances you'll meet new people having to travel floor to floor for different beverages. You know, if you're setting a meeting, meet me on the kombucha floor, office two. Now we know exactly where that is.

Raunaq Singh (00:45.143)
Hahaha.

Exactly. So that, you know, maybe it's their secret master plan to be able to help more folks meet.

Nate Smoyer (00:52.447)
Well, I think we'll have a great conversation here today. We won't be talking about co -working very much. I've got, for everyone listening, I've got Ronix Singh. He's founder and CEO of a company called Roam. And they've been making quite a splash recently this year. It's a platform for purchasing homes using assumable low rate mortgages. And I think this is a really interesting solution to hit the market. The timing couldn't be any better. Ronix got a very interesting

at least I think a very interesting history and track record of experience working product and operations at some other really standout startups, Uber, Opendoor, cul -de -sac. And I'd actually like to start there first before we dig into mortgages and interest rates and all that kind of jazz. Can you share a little bit about your experience and how that's shaped your approach as a founder building a new platform and marketplace that...

residential real estate hasn't seen yet.

Raunaq Singh (01:52.983)
Yeah, I'm happy to. So I started my career right here in New York, where we're actually based as well for Rome. And I was in the back of taxi cabs at Uber handing out phones to drivers, getting them to be able to drive with us and encouraging them to understand that this is a real way to earn flexible income. It's not a scam. It's not too good to be true. And from there, I had a chance to go around the world with Uber. And the biggest takeaway I had during that entire experience was there was going to be this whole world of companies that were built at the intersection.

of the physical world and the digital world. And I thought there were a couple of categories this would happen in. Housing, healthcare, transportation. Transportation, I thought Uber would dominate. Healthcare, unfortunately, I was scared of needles, so I discounted that one as well. And so that left me with housing. And so I went looking for what I thought would be the most compelling application of a company that's building at the intersection of the physical and the digital world and housing. And I found Open Door, which was buying and selling homes. It had very talented people who were interested in solving this problem of making

can get frictionless to be able to sell your home to open door, which later became known as you know, an eye buyer and and form that whole category. Now at open door within a couple weeks of when I joined the company, one of the founders came into the room Nate and they said, you know, we're going to start a mortgage company and you're gonna be the first loan officer and you're gonna take the exam in two weeks. And so that's how I became a loan officer and close the first 100 customers. You know, yeah, and I grew to love it actually, you know, so emotionally what I realized is we have this unique

Nate Smoyer (02:59.383)
Mm -hmm.

Nate Smoyer (03:15.479)
No way.

Raunaq Singh (03:22.601)
opportunity to help folks through this personal chasm of dread, which is also, you know, one of the most stressful experiences they'll ever go through. And functionally, I thought it was very interesting to figure out how do you make people's personal P &Ls line up? You know, how does the money come together so that they can feel safe and psychologically okay with moving forward with life's, you know, biggest transaction? So that's what I grew to love about mortgages. I spent about four years in different facets of the business at Opendoor. And

you know, kind of came away always thinking like there'd be something to do with mortgages again, but I wanted it to be quite differentiated as a product experience. So we'll talk more about what we're doing here at Roam, but those were the inklings of, you know, some of the experience and insight I had before we started Roam. Now at cul -de -sac, I joined after about four years, I actually worked for the same manager who had hired me at Opendoor, Ryan Johnson, who was the founder of cul -de -sac, you know, $200 million car free development in Arizona, led product there, you know, kind of had to think about stuff from.

you know, how do you help understand when a toilet is overflowing to how will people pay for parking and things of that nature. So got a chance to work in housing products for the last decade or so. And, you know, we started growing earlier last year because we saw rates rise from 2 % to north of 7 .5%.

And when that happened, it created the single largest economic dislocation we have seen of the last 40, 50 years. Reason being that, you know, as rates rose, so too did monthly payments, meaning that 75 million Americans can now no longer be able to afford to purchase a home.

given the rise in rates as well as home prices. Additionally, while this was happening, sellers decided to stay at home and not list their home because they thought, well, heck, I wouldn't be a buyer of this home at $3 ,500 a month. I don't know who would be, so I'm not going to list either. And as a result, there is this decay in economic mobility, which is why we call the company Bro. To give consumers a sense of freedom that they don't have to be tethered to a financial instrument, there is a better way to live.

Nate Smoyer (05:01.815)
Mm -hmm.

Nate Smoyer (05:20.695)
Yeah, the interest rate lock -in effect seems to be pretty real. People tend to move based on life events. As a real estate agent, you're told to look for it. It's like death, divorce, and what was the last one? yeah, yeah, death, divorce, and anyway, one of those. And so, but...

Raunaq Singh (05:36.759)
Yeah, diamonds. Diamonds, I think. Diamonds, like marriages, people trade up. Yeah, death, divorce, diamond, yeah. Yeah.

Nate Smoyer (05:51.159)
It also, because of the change financially, it's changes, it's like some people who just would want a change or like you mentioned, like they get a job offer, but it's not worth moving for the job offer because it doesn't pencil. I know for us, we bought and closed end of 21 towards the end of, tail end of 21. And there's no way I would probably make that decision today at the same price because the actual cost is so much greater.

Raunaq Singh (06:00.887)
Yeah.

Raunaq Singh (06:16.247)
Yeah.

Nate Smoyer (06:21.271)
Now I have to say, when I first saw Rome, I met with some skepticism. I was like, there can't be that many assumable loans out here for this to be a viable business. I thought that was a thing of the past, right? Cause all mortgage companies, they went with that, like they changed their due on clause statements in their agreements. Whereas like if you try to do a rent to own or you try to do an assumable, they can say, Hey, you know what? We'll take the whole loan today. Thank you. What's...

Raunaq Singh (06:26.839)
Yeah.

Nate Smoyer (06:49.463)
how many mortgages out there actually have an assumable loan? Like what's the size or the potential size of this market?

Raunaq Singh (06:56.311)
Yeah, so you know, I also similarly met the opportunity with skepticism when I started working on it. One of the big things you try to figure out as a founder is, you know, is this going to be a huge opportunity because you're going to invest years of your time and energy into it more than anyone who reads about it is going to think about it. So, you know, for me, the way I thought about was, okay, let's take a look at, you know, who's eligible for this. And it turns out that any government mortgage, so FHA and VA mortgages are by law eligible to be assumed, meaning they can be fully transferred from the seller to the

buyer, the buyer gets the exact rate that the seller has and the seller is left untouched from a credit perspective, their equity is cashed out and their timeline is the same as it would be in a purchase actually. And so, you know, I found out that sellers are protected and buyers get a chance to have half of the monthly payment they wouldn't.

Otherwise, you know, if they had purchased with a new mortgage. And then what I found out, Nate, was that if we think back to 20 and 21, when we had all those ultra low rate originations that make folks jealous now at two or 3%, one third were eligible for the assumeable mortgage, meaning one third were government backed loans and can be fully transferred from the seller to the buyer. Now,

That's huge. That's one point four trillion dollars of mortgages that can be transferred today at an average rate of three percent. So hundreds of thousands, if not millions of them will list this year. And the challenge has actually been that nobody really knows they're eligible for this opportunity. Less than one or two percent of sellers know they have an assemble mortgage. Few agents know to go to their seller at a listing appointment and ask them if they have an assemble mortgage that they can advertise with the home sale. Buyers don't know to shop for an assemble mortgage where, you know, they think,

Hey, if I go to quick in and I get pre -qualified at seven and a half quick and might tell them like you can afford a home at 325

Raunaq Singh (08:40.951)
Well, that sucks because the median home price now in Atlanta and Phoenix is both north of $400 ,000. So why would I decide to downgrade my lifestyle from the apartment I'm renting to be locked into a longer term liability? And so what we help them do is understand, hey, there's almost like a cloak that shrouds your eyes and you can actually uplift that. And it's almost as if a bail has come away from them. And now they can see all of these homes that they otherwise didn't know they could afford.

Nate Smoyer (09:07.895)
That's the red pill, blue pill thing, right? I actually never saw the whole matrix. I know it's from the matrix. Which one is the one that shows you everything? Is it the red pill?

Raunaq Singh (09:11.863)
Yeah.

I actually have never seen the Matrix. I have seen the memes on Twitter though.

Nate Smoyer (09:22.072)
All right, there's people listening to this wondering, who are we? But yeah, so now we know, okay, hey, there's mortgages out there, they're assumable. So VA is strictly only for VA to VA, right?

Raunaq Singh (09:35.959)
No, actually. So this is actually some of the misinformation that's out there today. So, you know, I would almost call this section, we could call the podcast like Mythbusters, right? So the way I think about it is like, there's all of this information that people don't really know about, which is anyone can actually assume a VA mortgage. Now that veteran,

Nate Smoyer (09:52.279)
No way!

Raunaq Singh (09:53.559)
Yeah, so if let's say you're a veteran and I'm not a veteran and I choose to assume your mortgage and you're okay with it, you would forfeit your entitlement until the time such that the loan is paid off. Now people ask me all the time, well, why would that veteran be okay with forfeiting that entitlement?

So twofold. One is that many of the folks who are leaving behind their VA home may actually be choosing to rent. They may be buying with a conventional loan, a jumbo loan. They may be moving out of the country, you know, other reasons. Separately, though, what many folks don't know is that on a second time use of that entitlement, the funding fee on a VA loan rises to about 3 .3 percent, which often means it's not very economical for that veteran to reuse that entitlement benefit for the second purchase. And so using a conventional

would actually probably be a better financial decision for that individual homeowner. But anyone is eligible to purchase a home with a VA mortgage and we will work with the veteran to ensure they're comfortable with their entitlement being forfeited. If they are not okay with it, we would just help them advertise in the listing description that this is a great opportunity for another veteran to be able to purchase a home with a VA mortgage included.

Nate Smoyer (11:01.943)
And then on an FHA, because FHA obviously has some financial restraints as to like who can use it, I believe, at least some of the low down payment products. Does it have restrictions on to who can assume that mortgage?

Raunaq Singh (11:15.511)
Yeah, so what's funny is FHA is a floor, not a ceiling, meaning that FHA allows people to dip below the credit score.

requirement for conventional. So whereas conventional loans will often require you have a minimum score of 620, FHA will actually let it go to 580. Similarly, with debt to income ratios, it's a higher ceiling than you would find with conventional. So oftentimes conventional mortgages get capped out at a 43 % debt to income ratio. FHA mortgages, you often see with a manual underwrite, be accepted north of 50 % debt to income ratios. So what I mean by that is the criteria is actually more flexible. And if a borrower

cannot qualify for an FHA or VA mortgage, it is actually very unlikely they can qualify for any mortgage, meaning that more people are eligible for this than not.

Nate Smoyer (12:05.591)
I love it. I have to assume that others are feeling some of the same waves moving through their head of like, I didn't realize this and what all is possible. I want to shift a little bit and talk about the discovery here. Okay, so now we know what's possible. We know that these loans are out there. How do we find the people who have them? And how do we find the buyers who are open to this transaction? Because this is a change. It's a little bit of a shift as to like how you go about the process. And quite frankly, I...

Raunaq Singh (12:18.071)
Yeah.

Nate Smoyer (12:35.127)
I'm going to assume that there are some buyers who are going to meet this with the same skepticism I had, but maybe a little bit different, and this isn't like, this sounds too good to be true. How come no one else talks about this?

Raunaq Singh (12:45.599)
Yeah. So, you know, I tell people this often, I don't know if you've heard this refrain of history doesn't repeat, but it does rhyme. And so what I find is that, you know, the last time assumptions were popular was 8182. And why then? Well, because rates went from, you know, 2 % to north of 18%, actually. And so during that time, most mortgages were actually transferable.

Garnsaint -Germain Act and the due on sale clause came about during that time for several public policy reasons, you know, I'm happy to share, but, unrelatedly now just the VA and FHA home loans are those that are fully transferable. And so the, you know, nobody's really had experience with this for the last 40 years is what I found. And so not many people understand that there are limited drawbacks. You know, sometimes I'll talk to agents and they'll tell me, you know, Hey, you know, my seller is not interested in the subject to offer, you know, we don't want to be left on the.

for any payments the buyer doesn't or doesn't make. And I'm like, great, I agree. We will file for a lease of liability on the loan such that your seller's credit is left untouched by any payments that subsequent buyer does or does not make. So, you know, there's a ton of misinformation out there.

And I'm really glad to be able to be here with you today so we can help correct the record on that for agents and borrowers and sellers all listening in. Because a lot of folks just don't know, you know, it's like your seller's equity will actually be cashed out one for one as it would be in a cash offer. There is no distinction. We will ensure you get all of your money back and that buyer just swaps right into that mortgage as if they were you and you're left untouched on the credit exposure.

Nate Smoyer (14:19.063)
Yep. And then so then how are you guys going about getting those sellers to get them listed on the platform here? Because that feels like it may be like two steps removed from traditional, from your standard ILS or IDX feed.

Raunaq Singh (14:27.511)
Yeah.

Raunaq Singh (14:37.431)
Yeah, so you know what I find is that if you go to Zillow or you know you try to search for a home like this often what you're going to do is you're going to use the keyword search function to look for an affordable mortgage. Now there's two problems with that. One is that sellers and listing agents don't know to advertise their home with the affordable mortgage tagline. And two, no buyer knows where the affordable mortgage is, so they're not searching for a keyword with an affordable mortgage. And so what we did is we actually built a data feed to scan every home and mortgage record in America.

Nate Smoyer (14:58.935)
Hehehehehe

Raunaq Singh (15:07.639)
So we get all the listings because we're a licensed real estate brokerage that allows us to pull all of the MLS records from an IDX feed like you would see on other traditional websites. But then what we do is we actually curate the most attractive homes from a down payment and rate perspective, but overlaying it with the county recorder records and the underlying mortgage data. So, you know, our team is constantly scanning millions of records around America every day to identify new listings that have the most attractive FHA and VA mortgages. So if you come over to

with ron dot com, you'll actually be able to see all of the homes that are now available to be voted be purchased with a 2 % rate in Houston, San Antonio, Tampa, Miami, wherever you're looking, you know, and so,

That's how we help you. And then what I would say is as a buyer, there were a couple of other concerns. One is, OK, once I see a home, how do I overcome this kind of hefty down payment requirement that I might otherwise run into? And to that, we just announced Roam Boost, which you'll see on every listing. And what that means is as long as you can put down 15%, the second mortgage partner, Spring EQ, will cover the rest of the funding gap that's required to be able to make up that mortgage amount.

Nate Smoyer (16:01.559)
Mm -hmm.

Raunaq Singh (16:18.807)
And so you can put down less than you would on a conventional mortgage. You know, most folks on a conventional are putting down 20. Here you're putting up 15. But the blended rate you're going to get between the first mortgage and the second mortgage is typically still around four or four and a half percent. So still about, you know, 300 basis points below the market where you're going to save 600 a month or $200 ,000 over the next 27 years. So that's the down payment thing. And then the second issue that I find that people ask me about is the timeline.

And that's another piece of misinformation, which is, you know, hey, I read online that assumptions take nine months to close. And that makes the seller anxious because the seller obviously wants to be out of this house so they can move on to doing other things in their life. And the buyer also is ready to move in. And so to that extent, we're very confident that we can close all of these transactions in 45 days because we now have a repeatable framework with every major lender. So we have recently announced our 45 day closing guarantee for sellers, which means if we do not close

Nate Smoyer (16:53.015)
Mm -hmm.

Raunaq Singh (17:16.153)
your assumption in 45 days, we will pay your mortgage until we do. Meaning that you no longer have to worry about having that double mortgage payment. You can move into that new build and get right at home and not worry about paying the mortgage on the old home.

Nate Smoyer (17:21.175)
wow.

Nate Smoyer (17:29.591)
Wow. I can tell you that would be a challenge in South Dakota. We just don't have enough property inspectors and appraisers throughout our state. But that means it's an aggressive and a high value proposition to offer to consumers because there is, from my limited days as a real estate agent, going from one place to the next is extremely stressful to try and marry those timelines. And really,

Raunaq Singh (17:56.023)
Yeah.

Nate Smoyer (17:58.967)
It's not uncommon that you're trying to do it all within the span of a 24 hour of like, how do we get two transactions to line up perfectly? And in real estate, it's not a matter of if something's gonna go wrong, something's gonna go wrong. It's just, yeah.

Raunaq Singh (18:04.887)
Yeah.

Raunaq Singh (18:12.407)
Exactly. I always tell people if you're in real estate long enough, every customer is an edge case. You know, everyone's got a little something special going on with their transaction.

Nate Smoyer (18:19.115)
Yeah, that's a great way to think about it. Now talk to me about, I'd love to hear more about how you're working with agents here because obviously, I'm assuming you guys are not, you're not representing the sellers and the buyers in these transactions. Okay, so the agents are involved in this. How are they learning about this? How are they learning how to talk to their clients about this? And what do you do to partner alongside them?

Raunaq Singh (18:35.031)
No.

Raunaq Singh (18:44.183)
Yeah. And so, you know, there's a couple of ways we work with agents. So for listing agents, what I find is right now, you know, unfortunately they're struggling to win some listings, right? They're going to sellers and sellers are saying, look, you know, demand is weakening. And, and one of the reasons you're seeing the listings rise in the market, by the way, is because sellers are not being able to have their sales price meet be met. And large part, I think it's because the listing is represented as fairly undifferentiated, right? Everybody that I see, you know, usually leads with this is a cozy two bed, two bath with an

nice pool. That's like every single listing in Atlanta. When I tell people is look, you know, Nate, the reason your home is going to sell vis -a -vis every other home in the neighborhood.

is because it's the only one that people can afford. So when you go to that listing appointment and you meet that seller, you're trying to get them to work with Ronak the agent. Ronak should come in to Nate and be like, Nate, I know how to get you that 400k sales price because I know that your home comes with a 2 .5 % mortgage. And so as a result, we're going to be far more likely to be able to generate, you know, not just the two buyers who can afford a 3 ,500 a month mortgage, but the 50 buyers who may be able to afford a 1 ,500 a month mortgage. And when those folks are involved, we're definitely going to get an offer.

Nate Smoyer (19:48.823)
Mm -hmm.

Raunaq Singh (19:51.641)
that comes in a 400k, which means this home will sell at a price that you will be excited about. And that differentiates you as the listing agent, because now all of a sudden you've got a differentiated tool in your toolbox that's purpose -built for this rate environment. So that's a little bit of how we work with listing agents. You know, if you're going to a seller at a kitchen table, work with us. We'll let you know if that home's a Sumbo. We'll give you personalized marketing material to win that seller over.

Additionally, if you have a listing that's already been on the market, like we just had a customer who was on the market for about 350 days, which is crazy. You know, it starts to be a lemon problem where people worry, you know, why am I so lucky so as to get this home now? Yeah, 350 days, almost a full year at this point, two weeks away.

Nate Smoyer (20:28.247)
350 days?

Nate Smoyer (20:33.623)
I only see landlocked parcels for sale for that long period.

Raunaq Singh (20:38.679)
Yeah.

And what's interesting is, you know, you can imagine if you're the listing agent, you're about getting ready to get fired, actually probably by the seller if it's been on the market 350 days. And so we met this listing agent. We let them know they were bearing the lead that this home came with a 2 .75 percent rate. This listing agent then refresh the listing with the new description to let folks know that this home came with a 2 .75 percent rate and that it would close in 45 days and there was down payment support available. That home sold or went under contract rather on day 364. So one day short of a fully

year. But the reason for that being that, you know, all of a sudden now they're able to leave with the most attractive asset, which is the seller's mortgage. And that generates significantly more demand. And so that's something that I thought was pretty enticing in that scenario, where it's like, if you're a listing agent, let's help you get more offers and help your seller get their sales price.

Nate Smoyer (21:13.591)
Wow.

Raunaq Singh (21:31.191)
And then for buyers agents, what I tell them is, look, you've probably got thousands of buyers in your CRM, you know, on Boomtown or wherever you're tracking folks to say, you know, hey, I was going to be interested in buying Nate, but, you know, rates are too high or prices are too high. Let's reconnect in a few years when things are better. And, you know, that might cause you to leave the business, unfortunately, because you've got all of these folks saying today's not a good day for me to buy. That happens long enough and you can't put food on the table. You got to reconsider.

And so what I tell them is, look, you know, I know your buyers have said they're not interested seven and a half, but if it was two and a half, do you think they'd be interested? If so, here's a whole host of options that you can now bring that buyer to let them know. Not only will they get a lower rate, but additionally, their quality of life will improve significantly because you know that.

Nate Smoyer (22:07.895)
Hmm.

Nate Smoyer (22:15.639)
Mm -hmm.

Raunaq Singh (22:17.143)
that spread between seven and a half and two and a half is probably worth 150 to 200 K in equity value on the home, which means now all of a sudden, at least for a price point that is comparable to your rent, you were getting into a home that you could see yourself being in for the next five, 10, 15 years.

Nate Smoyer (22:35.031)
could be strategic for, I think if you think interest rates will stay high for a long period of time, well, maybe it's too late now, but I should have considered buying with an FHA. Yeah, it's definitely not. So one of the things I find interesting here is because when you get into interest rates and advertising, a lot of times you have to put disclosure stuff, like of course you have to like.

Raunaq Singh (22:47.831)
Yeah, well you still can, Nate. There's still time. Yeah.

Nate Smoyer (23:03.511)
meet this, that, and the other. And so this is a scenario, right? Anytime you talk about like payment per month and interest rates, like you have to like disclose those scenarios. And I know that you guys have that on the site, but my curiosity is when the lender is reviewing that prospective buyer as to whether or not they can assume, do they go through the exact same underwriting criteria they would as if it was a brand new loan origination?

Raunaq Singh (23:26.903)
Yes, exactly. So just as you would be underwritten for an FHRBA loan, you would be underwritten for the assumption. You know, the number one reason actually that people get disqualified out of the process for the servicer is because they're trying to assume it as an investment property, whereas, you know, most of the requirements are such that you would have to attest for owner occupancy. And so servicers like us, because they know that when you work with Roam, you know, you're going to get clean files that have the docs in order are going to be able to close quickly. They'll have a responsive point of contact. And this, by the way, is not the

the borrower's fault at all because something that's very common. We have a buyer that's a firefighter or a nurse or a teacher or really any job where you're not available between say 9 a and 7 p or 6 p whenever that service is available. You're available after hours. How are you going to have a line of communication with this person? sorry. Did something happen?

Nate Smoyer (24:14.359)
Hey, Shane, give me one. I'm sorry. I'm sorry to cut you off. Okay. I got an, okay, it's just, I think it's just on Shane's browser. I'm so sorry. It was an alert and I was like, I always saw it was preventing recording, but it was only for Shane. So it wasn't for you. I'm sorry to cut you off there, Rodlich.

Raunaq Singh (24:26.999)
no.

Raunaq Singh (24:33.015)
I just thought...

Raunaq Singh (24:41.335)
Wait, can you hear me? I think it froze a little bit. I'm back. Okay.

Nate Smoyer (24:42.519)
Yeah, I can hear you now. I lost my place. If you knew your place, feel free to pick back up.

Raunaq Singh (24:48.823)
I actually don't remember. Maybe we just start a new topic or what were we talking about? I forget now.

Nate Smoyer (24:52.343)
Okay, yeah, sorry about that. The dang pop -up really had me shook there for a hot second here. We were talking about disclosures of interest rates and the underwriting criteria for the new buyers.

Raunaq Singh (24:58.071)
All good, no worries.

Yes, yeah, right. So for a buyer, you know, it's exactly the same underwriting criteria as it would be for an FHA or BA loan to get sued in the mortgage. You know, we'd work with you to ensure all of your ducks are in a row and you have the right documentation. We know all of the lender's individual overlays so we can provide the certainty to let you know that once you sign that purchase agreement, you will be approved for this assumption and the transaction will close. And so that's a large part of what sellers get peace of mind from is knowing that once they're in that purchase agreement, it's good as done.

that it's going to close in 45 days. And for buyers candidly too, it's good for them to know that, hey, I'm not wasting my time. I shouldn't be, you know, having another home in my back pocket. That's also going to be able to close. It's, it's gives them real peace of mind that this will close. I'm going to be approved and, you know, we'll be done and signed in the next 45 days.

Nate Smoyer (25:54.487)
Now, I have to assume, okay, so you're not representing the clients and the loan is an assumed loan. So then for Roam here, where does money change hands or how does Roam make money in this whole process in providing the service?

Raunaq Singh (26:01.111)
Correct.

Raunaq Singh (26:13.399)
Right.

So Rome is free for sellers and for agents as you mentioned. We actually charge the buyer 1 % of the sales price largely because the buyer is the one getting the biggest benefit. So a typical buyer with Rome will save you know on a former K home purchase price. You're probably save about $300 ,000 because most people don't think about this given the fact that you know with the vast majority of the money that you're paying is going to interest. So you'll save about $300 ,000. Now we will charge the buyer 1 % of the sales price. So on a 400k home purchase you would pay $4 ,000.

And that would only be paid at closing and out of the escrow table. So it would not come, you know, if we don't close, we don't make any money and that aligns our incentives.

Now, what I should mention is while it is a cost paid at closing, the origination costs on an assumption are actually often lower than on a standard mortgage. Reason being that on a standard mortgage balance, you know, you take about 2 % of the sales price or of the loan amount as your commission as the broker. With this, there's obviously a much lower price given the government has capped fees.

at about $900 are an assumption. And then additionally, you find that there's no additional lenders title insurance check to be able to run and there's no appraisal. Lenders title insurance is required because the original loan was already created and the appraisal is required for the same reason that the original loan was already created. So if anything, the lender is happier from an LTP perspective. And so it's cheaper on an origination basis and the savings are enormous on a annualized basis.

Nate Smoyer (27:43.255)
that's so fascinating. I didn't realize that there was also the caps on assumables, but again, it's not very much talked about. So it doesn't surprise me that that's something that exists. I love to talk about just kind of like general housing trends. Obviously real estate is one of those like, it's a market to market type business. And I always love when I hear terminologies used. Recently, I was trying to explain to someone,

how I define the differences of duplex and how duplex is used or a row home, for instance, I was complaining about why I don't see row homes west of the Mississippi. And they're like, no, we have row homes. We have two homes next to each other. I mean, that's called a twin. But on a whole other topic, but related to that, are you seeing adoption like take in different markets? Like are buyers and sellers more open to the idea? And even still like, are there like,

Raunaq Singh (28:27.767)
Ha!

Nate Smoyer (28:41.463)
pockets where you're going to find more, assumable loans. I'm guessing military cities like here in Rapid City, we have, you know, an Air Force base. So of course we're probably going to have more VA loans, but I'm curious some of the trends around like where you'd find them and also adoption from buyers or sellers who are open to this type process.

Raunaq Singh (29:00.279)
Yeah, so great question. So a couple of things you'll find is one is the number of homes that are eligible for the product is largely determined by both members of the veteran community who are in your neighborhood, but additionally by the high cost of living adjustment by HUD. So.

You know, for instance, the markets that we're alive in today, like Georgia, Arizona, Colorado, Florida, Illinois, we picked those just because they had the most FHA and VA inventory, which is probably not a surprise for a lot of people. But, you know, conversely, San Francisco, unfortunately, does not have a lot of eligible inventory for the assumption, even though there's thousands of folks from San Francisco who are paying to ask, you know, when will you be in my town?

Now there's other ideas we have for those people, but you know what you might find that's interesting is Texas actually has more than California. Reason for that being that there's a lot of veteran community members. There's a lot of FHA homeowners and there's a bar dispersion of inventory that's eligible to be purchased. So you know, if you come to with Rome, you'll be able to see all of the homes that are available in that market. But we tend to find the most attractive homes. You know, if you're looking for a home and say a $10 million price range,

It's very unlikely that that home is a symbol. But as recently as in the last month, we've actually sold a two and a half million dollar home because that veterans entitlement allotment was about one and a half million dollars such that a buyer was able to purchase it. So you might be surprised. You know, it's not at the luxury end and that's not the market we're focused on for now. But if you're looking for, you know, a 400, 500, 600 K home like we got you, you know, we're going to have a plethora of homes that you might be excited to learn that you could afford.

Nate Smoyer (30:40.759)
And do you guys have restrictions as to which states you can work in and list in or are you able to go anywhere?

Raunaq Singh (30:47.031)
We're working on going national. Partially the reason why we're only in six states today is because we wanted to make sure we could give every customer a good experience. Now we feel like we're in a good place with a good operating playbook and an ability to withstand more demand. And so now we're looking at going national. And so that'll be happening over the next couple of months. But today we capture about 35 % of all symbol listings that our FHA and VA owned in Georgia, Arizona, Colorado, Texas, Florida, and Illinois.

Nate Smoyer (31:15.127)
That's awesome. Colorado is one of those places I do go back to and look at. It's only six hours away from me, so it's like, well, if we were to ever go to real mountains outside of the Black Hills, potentially there, the Boulder area has really built up and become popular over the last few years. Well, I wanna shift to the bottom of the show here, Ronick. We're gonna go into a segment, I...

Raunaq Singh (31:23.943)
yeah.

Raunaq Singh (31:29.175)
Hahaha.

Nate Smoyer (31:44.983)
call for the future for the futures. When I get to ask each guest who comes to the show to give their best predictions based on the following four questions. Are you ready to play? All right. Okay. Number one here. What does Rome look like one year from now?

Raunaq Singh (31:53.271)
Okay, let's do it. I'm excited.

Raunaq Singh (32:01.367)
Yeah, so the end state vision for the company is to be the firm for home buying. So the way I think about this is just as a firm made it easier for more folks to be able to afford a Peloton. You know, you can think about it as not many people can afford $2 ,000 spot payment for Peloton, but a lot of folks could afford $9 .99 a month.

What that means is merchants knew that the best way to be able to sell their product was to expand the universe of buyers who are eligible to purchase. And buyers knew that they could finance their purchase in the most affordable pattern with a firm and they could purchase more of a good than they would have been able to otherwise. Similarly, I think about it for us is we want to make sure that sellers know this is the most certain way to be able to sell their home and generate the most demand for their home sale. And I want buyers to know that buying with Rome means that you can purchase your next home with a monthly more

payment that is less than half that you would get elsewhere. And so there's a variety of strategies that we have over different rate environments. But I think of it as the affirm for home buying. Every seller in America will know this is the best way to generate demand for my home sale and the most certain way to sell. And buyers will know this is the most affordable way to purchase.

Nate Smoyer (33:08.183)
All right, question number two, outside of the controls of VA and FHA loans, do you think lenders will ever introduce mortgages offering them to be assumable as a feature or differentiation moving forward? Why or why not?

Raunaq Singh (33:25.847)
Yeah, so I think, you know, when I meet with a lot of lenders, they're used to thinking about this as more of a call center, right? And that makes sense because they think of it as like, look, you know, I'm paying maybe a thousand dollars for some people to underwrite this mortgage. If I only collect $900 in the fee, you know, why should I get out of bed to help with this? Now, one is they're required to do it by law, which people forget. But number two is that now many of them are starting to wake up and see the opportunity that this opportunity yields to be able to generate significantly more income in more enduring ways. And what by

that I mean that you know they could get the MSR revenue on the recapture of the loan so when a seller makes their checks out a traditional servicer captures about 25 basis points of that check and that's their income. Now if that loan is left outstanding for the next 27 years and passed over to a subsequent buyer what will actually happen is they will collect five six seven thousand dollars over the stream of those checks over the next 27 years and they have no customer acquisition cost to have those checks come in and so it's a whole stream of revenue they otherwise you know would have left.

left untapped. And why would you want that loan to be financed and paid off and sent away to somebody else instead of you getting that money? Number two is, you know, some of them are excited to be able to originate second loans because they're already underwriting that bar on the first mortgage. At no incremental operating expense, they can originate a second mortgage for that new bar.

And third is, you know, they're excited to be able to also reduce their costs, as I mentioned, you know, for them, the most common reason they're on the phone, let's say they get 100 ,000 calls in a month, 60, 70 ,000 of those calls are about can I assume this mortgage as an investor? Imagine having to hang up the phone 70 ,000 times to say, no, you cannot. And so we screen all those buyers out and ensure that when a customer does end up getting to the lender, it's a qualified borrower where they have an opportunity not only in the short term to generate some income, but there are opportunities over the next 20,

Nate Smoyer (35:11.831)
Mm -hmm.

Raunaq Singh (35:13.337)
seven years that will continue to pay dividends.

Nate Smoyer (35:17.151)
very cool. Number three here on For the Future, what's one industry trend you think will continue, but you wish would go away?

Raunaq Singh (35:25.355)
Let me think.

something I think will continue, but I wish would go away. I'm thinking of a podcast answer. I'm trying to think. Probably, I would say, you know, kind of one of the reasons I was originally not going to do a product company is because the vast majority of companies I see is like incrementalist. And so what I thought was interesting was, you know, I saw at least 30 to 40 pitches around.

Nate Smoyer (35:52.439)
Hmm.

Raunaq Singh (35:58.487)
You know, guaranteed rent for landlords. And I always thought, you know, where I had a chance to meet these people, like, you know, this problem has already been solved. And like a lot of people have thought about it. There's other solutions. Should really think about doing something bold. I think the challenge is that few people see a chance to see what something could be. They see it as what it is today. And so what I'd love for what I'd love to change is especially in ProTech or real estate or whatever words you want to use to describe the category that we're all in now. I'd love to see more people taking a bold approach actually and trying to.

not just do optimization at the edges.

Nate Smoyer (36:32.119)
I feel like I wrote a tweet earlier just before this recording just basically stating like I'm still bullish on PropTech. I'm still hopeful and maybe ignorantly or blissfully so, but I'm still bullish that there's going to be solutions that continue to make it better to be in real estate and improving transactions and it's a higher quality of living, actually improving maintenance or service provider, services.

Raunaq Singh (36:51.031)
this out though.

Nate Smoyer (37:01.047)
especially in the rental side of things. There's a good amount of discussion and I think I tend to agree with you the incrementalism. Those companies will fade into the night and sorry for the investors, but those that drive meaningful change, I think are the ones that, as you stated, the bold approach, those are the ones that we'll see become household brands.

Raunaq Singh (37:01.047)
Exactly.

Raunaq Singh (37:10.359)
Yeah.

Raunaq Singh (37:21.815)
Yeah, the trend I'm most excited about that I see continuing now is transparency, like consumers want price transparency, they want, you know, peace of mind, they want to know exactly what the dynamics are and how the incentives work. And I do see that coming more to the forefront now, and more companies being open about that. So that's something I think that will bode well for customers and for companies.

Nate Smoyer (37:35.511)
Mm.

Nate Smoyer (37:41.719)
Last one here on For the Future, what's one thing you believe will dramatically change or fade away in real estate as a result of tech advances?

Raunaq Singh (37:50.231)
Mmm.

So, you know, probably something I'm seeing a lot of now that agents are happy to name is that, you know, consumers are fantasy shopping all the time on Zillow or on, you know, Realtor or Redfin or wherever they go. And so as an agent, I think what you'll start to shift away from is like gatekeeping the MLS and trying to use that as a system of record that only you have access to the inventory. I think most people believe now that like consumers are finding the homes and then asking, you know, Ronak the agent, like, hey, can you help tell me a little bit more about what the school district's like here? Can we tour?

where it helped me do the bins or the spuds, all this other good stuff that needs to happen, right? But I would think more about how do I have a value proposition as an agent that is beyond discovery now and is about actually giving them peace of mind and.

adding a different tool in my toolkit for this time that would help them, you know, take advantage of the opportunity. So that's how I think about it, right? It's like you got to, you know, markets are constantly shifting, technology reduces costs and reduces friction, and you always have to evolve to offer something new every year, every month, every day.

Nate Smoyer (38:56.631)
Ron, this has been awesome. Greatly appreciate your time. Thanks for this discussion. I genuinely wasn't sure I was going to be overly excited about Assumable Mortgages, but I think that there's so much to unpack here and the opportunity kind of speaks for itself. Not just, you know, as being a provider or service provider in this space, but actually genuinely for consumers as to difference it can make. And I love the story behind the name of Rome and what that represents.

Before we close out, for those who want to get in touch with you and or learn more about Roam, where do they go and how do they do that?

Raunaq Singh (39:31.831)
you can email me directly. I read every email and I respond to every email. My email is ronick at withroam .com.

Nate Smoyer (39:43.031)
Perfect. Appreciate it. I got to get to a yardie we work. I want to see the flat water, sparkling water and cambucho floors. I want to see how they differentiate themselves these days. Maybe I'll have to visit when I'm in New York next, but until then, we'll catch you later.

Raunaq Singh (39:55.479)
we'd love to have you here, Nate.

Raunaq Singh (40:03.191)
Alright and then Nate actually if you have a minute I actually have a friend who

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