As fall turned to winter, Kelley Halpin was frantically trying to raise a fresh round of capital for Mesa, the homeownership rewards credit card that he launched just a year prior. 

Credit card businesses are notoriously capital intensive. But the serial entrepreneur & his co-founder Peyton Heyslette had trumpeted a $24M debt-and-equity raise in August, barely a year after raising $7.2M in equity & $2M in debt from Streamlined Ventures, Lowe’s & several mortgage industry executives. Yet cash was apparently already running dangerously low.

To outsiders, Mesa appeared to be doing great. Throughout the fall, Halpin took to social media to announce a number of partnerships & sponsorships w/ companies like Rocket, Instacart, Costco, Lowe’s & Omni Hotels & Resorts. He even humble-bragged that he was shortlisted for CEO of the Year by the Austin Business Journal.

But in early-to-mid December, Mesa cardholders reported that transactions weren’t going through. On Dec. 12, Halpin hit the kill switch, laid off Mesa’s staffers & infuriated loads of cardholders in the process.

Sources familiar w/ Mesa’s closure told The Scoop that at least one investor is preparing to file suit to determine exactly what happened to their money. How could everything be gone in a year?

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Publicly traded real estate tech firm reAlpha has struck a deal to acquire Shashank Shekhar’s InstaMortgage for $8.5M, barely a year after picking up broker shop Be My Neighbor for up to $6M. 

reAlpha features a pretty interesting model. It provides a commission-free homebuying experience through an AI-powered chatbot, but also has licensed agents working locally in their communities. reAlpha just closed on Prevu, a low-fee brokerage that gives homebuyers cash back on their purchase. Its mortgage ops will now be considerably larger—it’s adding 50+ LOs across 32 states, roughly $250M a year in origination volume & warehouse lines. 

reAlpha is combining all the ingredients needed to cook up an all-in-one recipe: real estate, title, mortgage. It’s the holy grail of housing, but no company has nailed it. Real estate & mortgage are both highly fragmented industries w/ decades-long business practices that consumers know. It’s not easily disrupted. Redfin arguably came closest but was never profitable & sold to Rocket for $1.75B. 

“We've created a rebate model, so the more reAlpha services that you use, the bigger the rebate,” said Jamie Cavanaugh, who leads reAlpha’s mortgage biz. “There is a time/cost savings on our end by having our professionals work together to create a cohesive experience, but it also streamlines things quite a bit on our side. It’s a benefit to the homeowners, but it's also a benefit to us.”

Other companies that have tried the model lacked the domain experience in both mortgage & real estate, Cavanaugh said.

At reAlpha, real estate agents are available to guide the consumer through the process, w/ tech happening in the background. "That's exactly what we want to do w/ mortgage,” said Cavanaugh. “There's still large portions of our business that are self-sourced through relationships. We never want that to stop. What we do want is to truly be tech forward & people-first, bringing consumers into the reAlpha infrastructure to get the cost down & create affordability."

There is potentially a big opportunity to serve customers who want to handle some aspects of the transaction, but still would prefer a licensed professional in the mix at a greatly reduced cost. Why not get title & mortgage while you’re there? Maybe some day that ends up being 25% of the market. 

Ultimately, Redfin wasn’t able to get its salaried agent model to stick w/ in-house mortgage & achieve profitability. Can others do it w/o the enormous resources of Rocket (or even a Lower)? It’s unlikely, but it’s nice to see a moonshot.

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The knives are truly out for Zillow. If dealing w/ a pissed off Robert Reffkin weren’t enough, a new empirical study commissioned by CoStar authored by Georgetown law & economics professor Steven Salop concludes that Zillow Home Loans charged materially higher mortgage prices than competing lenders.

Using HMDA loan-level data from 2022–2024, the study analyzes whether ZHL borrowers paid more than comparable borrowers at other lenders. This analysis is framed against ongoing antitrust & consumer-protection litigation alleging Zillow steered buyers to ZHL.

Among Salop’s claims:

Note that the study does not include FICOscores (HMDA doesn’t display them) & Zillow does serve a higher proportion of lower income borrowers than the overall market. There’s also no peer set, the paper isn’t peer reviewed &, doesn’t consider differences in business models, etc.

“This report draws inaccurate & misleading conclusions,” a Zillow spokesperson said. “It was commissioned and paid for by a competitor & relies on selectively chosen data & inadequate controls to produce a distorted view of Zillow Home Loans.”

There are legitimate questions about Zillow potentially steering customers via the Flex Program, but this study looks like a hit piece to me 🤷.

Halpin did not respond to requests for comment. But insiders said that Halpin’s running of Mesa was unusual, even by startup standards.