Category Archives: Market News

Zillow to begin buying houses in California, North Carolina

It seems to be all about expansion these days for Zillow.

The online real estate giant recently got into the mortgage business with its acquisition of Mortgage Lenders of America. Zillow has also been growing its direct buyer business, Zillow Offers, wherein the company is buying houses directly from sellers, making whatever improvements are necessary, then listing the home for sale.

Zillow Offers launched in Phoenix in April, and is also available in Las Vegas, Atlanta, and Denver.

And the company will soon be buying houses in California and North Carolina.

Zillow announced this week that it is expanding its direct buyer program to Riverside, California, and Charlotte, North Carolina.

Zillow actually announced earlier this year that it planned to expand to North Carolina, but the service is now officially available to homeowners in Charlotte. And soon, the service will be available in Raleigh as well, Zillow said.

“We couldn’t be more excited to bring Zillow Offers to our first North Carolina market today,” said Zillow Brand President Jeremy Wacksman. “Selling a home can be extremely stressful – it’s one of the largest financial transactions many people will make in their lifetime. Zillow Offers alleviates some of that stress and uncertainty so home sellers can move onto the next stage of their life.”

As of this week, potential home sellers in the Charlotte area will be able to request a free, no-obligation cash offer for their home from Zillow. If the seller accepts the offer, they then pick a closing date that works best for them.

Zillow then takes possession of the home, does some light renovation or clean-up, then sells its, presumably for a profit.

What makes Zillow’s direct buying program different from others in the space is that it does not cut real estate agents out of the process.

According to Zillow, a local agent will represent Zillow in the purchase and sale of each home, which will enable agents to earn commission on the purchase and sale.

In the Charlotte market, The Redbud Group at Keller Williams SouthPark will be representing Zillow in all its transactions, the company said.

“Getting the chance to work with Zillow as they begin buying and selling homes in Charlotte was an opportunity we didn’t want to miss,” said Trent Corbin, founder of The Redbud Group. “The real estate market is constantly changing, and Zillow understands the value of working with real estate agents to make the home selling process as simple and stress-free as possible. We’re very excited to represent Zillow in the Charlotte market.”

Zillow is also partnering with several local brokerages to help the brokerages acquire new leads from “motivated” sellers who do not accept Zillow’s offer. Basically, if a seller chooses to reject Zillow’s offer, the site will then connect them with certain agents to represent them in their home sale.

The four brokerages partnering with Zillow in Charlotte to be connected with those home sellers are Premier Team at RE/MAX Executive, Century 21 Vanguard, Stephen Cooley Real Estate Group – Keller Williams, and IDEAL Realty.

Additionally, Zillow announced that it has hired Jeff Gibel to serve as its general manager in Charlotte. In this role, Gibel will run the day-to-day operations for Zillow Offers in North Carolina. 

Beyond officially launching in Charlotte, Zillow also said that it will be launching in Riverside in early 2019. That will mark the program’s expansion in California.

Wacksman said the company “can’t wait” to start buying homes in Riverside. The company did not disclose what brokerages will be helping with its California expansion, and will likely announce those when it officially begins buying and selling in the market at some point in the next few months.

Article source: https://www.housingwire.com/articles/47693-zillow-to-begin-buying-houses-in-california-north-carolina

U.S. fund investors compound pain for bond markets

NEW YORK (Reuters) – U.S. fund investors sold more bonds in December’s opening days, the Investment Company Institute (ICI) said on Wednesday, putting even more of a chill on markets where companies and governments borrow.

Investors cashed out $5.2 billion from U.S.-based bond mutual funds and exchange-traded funds (ETFs) during the week ended Dec. 4, ICI said, intensifying what is already the worst sales of such investments since the 2008 financial crisis as markets fret about a U.S. economic slowdown.

Nearly $65 billion has dropped out of U.S.-based bond funds since October, marking the worst calendar quarter since the financial crisis, when investors cashed in $68 billion of debt-fund shares, according to Lipper, a research service.

The Federal Reserve is widely expected next week to raise its target interest rate for a ninth time in about three years. But the central bank’s efforts to restore normal policy a decade after it responded to financial crisis by pushing rates near zero has irked markets.

In addition to the rate hikes, investors have been worried about excessive corporate borrowing, rising short-term bond yields, U.S.-China trade tensions and slowing growth in corporate profits. The benchmark SP 500 stock index is down more than 8 percent, including reinvested dividends, over the past three months.

“While economic growth is slowing and earnings growth is expected to decelerate, we do not see either an economic or an earnings recession over the next 12 months,” said Charles Shriver, co-head of the Asset Allocation Committee at T. Rowe Price Group Inc. “There’s certainly elevated uncertainty, but I think that it’s important to look at the fundamentals and what we think is the trajectory for earnings.”

The pullback in stocks has actually helped safe-haven bond performance, but closely watched bond investor Jeffrey Gundlach said on Tuesday that bonds’ rally over the past few weeks has been unimpressive because of the unfavorable mix of rising U.S. government debt and rates.

Reporting by Trevor Hunnicutt; editing by Jonathan Oatis

Article source: http://feeds.reuters.com/~r/news/wealth/~3/tJC7OB2DvCQ/u-s-fund-investors-compound-pain-for-bond-markets-idUSKBN1OB2E8

WhyHotel raises $10 million to expand service that turns empty apartments into hotels

WhyHotel, a company that works with developers to turn newly built unleased luxury apartments into hotels, is set to expand thanks to a new capital raise.

The company announced this week that it raised $10 million in its Series A funding round. The news comes just a few months after the company raised just shy of $4 million in its seed funding round.

WhyHotel sets up shop in luxury buildings with 100 or more unleased apartments and creates a full-service hotel within the property using those unleased units as hotel rooms.

The hotels are temporary, and as lease-up continues, WhyHotel gradually decreases its presence in the host apartment community, ultimately leaving when lease-up is complete.

The company has been growing over the last few months and attracted several new investors in this funding round. The capital raise was led by Highland Capital Partners, with participation from Camber Creek, Revolution’s Rise of the Rest Seed Fund, Mendacre, MetaProp, and Geolo Capital.

According to the company, it plans to use the new funding to launch new pop-up hotels, beginning with three locations in Virginia, and to continue expanding nationwide throughout next year.

The company said it will also use the funding to hire new employees.

WhyHotel is a spinoff of Vornado Realty Trust, which developed the concept from within its strategic projects division.

The company’s first efforts were with Vornado properties, but since then, the company has expanded and partnered with other operators as well.

“The WhyHotel concept of turning brand new, yet to be leased luxury apartment building units into temporary hotel suites has seen great success with consumers in the areas we have launched so far,” said Bao Vuong, president and co-founder of WhyHotel. “It is for that reason that we are continuing our rapid expansion to bring the WhyHotel experience to additional metros and we are grateful to have received the funding to do so.”

In addition to expanding beyond the east coast and going nationwide, WhyHotel also will also look to open new pop-ups in the cities the company currently operates in, to create a permanent presence in those cities despite individual locations ending their temporary programs, the company said.

“WhyHotel provides a better product and a better customer experience to business and leisure travelers for their short-term housing needs,” said Craig Driscoll, partner, Highland Capital Partners. “The WhyHotel team has taken a leadership position in helping modern cities and leading property developers provide visitors with a more flexible and cost-effective housing option. We are proud to be partnered with the WhyHotel team on this journey.”

Article source: https://www.housingwire.com/articles/47676-whyhotel-raises-10-million-to-expand-service-that-turns-empty-apartments-into-hotels

WhyHotel raises $10 million to expand service that turns empty apartments into hotels

WhyHotel, a company that works with developers to turn newly built unleased luxury apartments into hotels, is set to expand thanks to a new capital raise.

The company announced this week that it raised $10 million in its Series A funding round. The news comes just a few months after the company raised just shy of $4 million in its seed funding round.

WhyHotel sets up shop in luxury buildings with 100 or more unleased apartments and creates a full-service hotel within the property using those unleased units as hotel rooms.

The hotels are temporary, and as lease-up continues, WhyHotel gradually decreases its presence in the host apartment community, ultimately leaving when lease-up is complete.

The company has been growing over the last few months and attracted several new investors in this funding round. The capital raise was led by Highland Capital Partners, with participation from Camber Creek, Revolution’s Rise of the Rest Seed Fund, Mendacre, MetaProp, and Geolo Capital.

According to the company, it plans to use the new funding to launch new pop-up hotels, beginning with three locations in Virginia, and to continue expanding nationwide throughout next year.

The company said it will also use the funding to hire new employees.

WhyHotel is a spinoff of Vornado Realty Trust, which developed the concept from within its strategic projects division.

The company’s first efforts were with Vornado properties, but since then, the company has expanded and partnered with other operators as well.

“The WhyHotel concept of turning brand new, yet to be leased luxury apartment building units into temporary hotel suites has seen great success with consumers in the areas we have launched so far,” said Bao Vuong, president and co-founder of WhyHotel. “It is for that reason that we are continuing our rapid expansion to bring the WhyHotel experience to additional metros and we are grateful to have received the funding to do so.”

In addition to expanding beyond the east coast and going nationwide, WhyHotel also will also look to open new pop-ups in the cities the company currently operates in, to create a permanent presence in those cities despite individual locations ending their temporary programs, the company said.

“WhyHotel provides a better product and a better customer experience to business and leisure travelers for their short-term housing needs,” said Craig Driscoll, partner, Highland Capital Partners. “The WhyHotel team has taken a leadership position in helping modern cities and leading property developers provide visitors with a more flexible and cost-effective housing option. We are proud to be partnered with the WhyHotel team on this journey.”

Article source: https://www.housingwire.com/articles/47676-whyhotel-raises-10-million-to-expand-service-that-turns-empty-apartments-into-hotels

Anthony Scaramucci’s SkyBridge Capital planning big investment in Opportunity Zones

There’s a new notable name among those who plan big investments in Opportunity Zones – Anthony Scaramucci.

Scaramucci famously served as White House communications director last summer, before flaming out in just 10 days after giving a colorful interview in which he disparaged other Trump administration personnel.

Scaramucci came to the White House from Wall Street, where he ran an investment firm called SkyBridge Capital. After leaving the White House, Scaramucci returned to SkyBridge.

And now, Scaramucci and SkyBridge are planning to invest in Opportunity Zones, which are economically distressed areas designated by the Department of the Treasury for favorable tax rules for investors in exchange for investment.

Opportunity Zones were established by the Tax Cut and Jobs Act of 2017 and “designed to spur economic development and job creation by encouraging long-term investments in economically distressed communities nationwide.”

Earlier this year, the Treasury certified more than 8,700 communities nationwide as Opportunity Zones. According to the Treasury, approximately 35 million Americans live in areas designated as Opportunity Zones.

Through the program, investors reinvest their capital gains into areas that need investment. Gains can come from any investment, whether that is from stocks, bonds, real estate or partnership interests.

The areas have drawn a lot of investor interest already, and now SkyBridge is the latest to make a move.

SkyBridge is partnering with EJF Capital, a hedge fund and private equity fund manager, to launch of the SkyBridge-EJF Opportunity Zone Real Estate Investment Trust.

According to the firms, the REIT has a “mandate” to invest in Opportunity Zones.

“We launched the SkyBridge-EJF Opportunity Zone REIT in response to demand from investors, who correctly see the OZ program as a chance to potentially generate attractive returns while having a positive societal impact,” said Scaramucci, who is the founder and co-managing partner of SkyBridge Capital. “We worked with EJF to structure the product in an investor-friendly way to democratize access to this historic incentive.”

According to the firms, the investment vehicle is structured as a private, non-exchange-traded REIT that is available to accredited investors at a minimum investment of $100,000, and is expected to diversify its investments by geography, property type, and developer, while focusing on both new development and redevelopment real estate projects.

“Our team’s expertise in real estate and related investments, along with our relationships with regional and community banks, gives us an edge in sourcing and developing investment opportunities across multifamily, industrial, and hospitality,” said Neal Wilson, co-founder and chief operating officer of EJF Capital. “We partnered with SkyBridge on opportunity zones because they understand the needs of mass affluent investors.”

Scaramucci, as he is wont to do, took to Twitter to discuss the REIT’s unveiling and pushed back at suggestions that this effort or Opportunity Zones themselves are directly tied to his brief work from the Trump administration.

Article source: https://www.housingwire.com/articles/47683-anthony-scaramuccis-skybridge-capital-planning-big-investment-in-opportunity-zones

Anthony Scaramucci’s SkyBridge Capital planning big investment in Opportunity Zones

There’s a new notable name among those who plan big investments in Opportunity Zones – Anthony Scaramucci.

Scaramucci famously served as White House communications director last summer, before flaming out in just 10 days after giving a colorful interview in which he disparaged other Trump administration personnel.

Scaramucci came to the White House from Wall Street, where he ran an investment firm called SkyBridge Capital. After leaving the White House, Scaramucci returned to SkyBridge.

And now, Scaramucci and SkyBridge are planning to invest in Opportunity Zones, which are economically distressed areas designated by the Department of the Treasury for favorable tax rules for investors in exchange for investment.

Opportunity Zones were established by the Tax Cut and Jobs Act of 2017 and “designed to spur economic development and job creation by encouraging long-term investments in economically distressed communities nationwide.”

Earlier this year, the Treasury certified more than 8,700 communities nationwide as Opportunity Zones. According to the Treasury, approximately 35 million Americans live in areas designated as Opportunity Zones.

Through the program, investors reinvest their capital gains into areas that need investment. Gains can come from any investment, whether that is from stocks, bonds, real estate or partnership interests.

The areas have drawn a lot of investor interest already, and now SkyBridge is the latest to make a move.

SkyBridge is partnering with EJF Capital, a hedge fund and private equity fund manager, to launch of the SkyBridge-EJF Opportunity Zone Real Estate Investment Trust.

According to the firms, the REIT has a “mandate” to invest in Opportunity Zones.

“We launched the SkyBridge-EJF Opportunity Zone REIT in response to demand from investors, who correctly see the OZ program as a chance to potentially generate attractive returns while having a positive societal impact,” said Scaramucci, who is the founder and co-managing partner of SkyBridge Capital. “We worked with EJF to structure the product in an investor-friendly way to democratize access to this historic incentive.”

According to the firms, the investment vehicle is structured as a private, non-exchange-traded REIT that is available to accredited investors at a minimum investment of $100,000, and is expected to diversify its investments by geography, property type, and developer, while focusing on both new development and redevelopment real estate projects.

“Our team’s expertise in real estate and related investments, along with our relationships with regional and community banks, gives us an edge in sourcing and developing investment opportunities across multifamily, industrial, and hospitality,” said Neal Wilson, co-founder and chief operating officer of EJF Capital. “We partnered with SkyBridge on opportunity zones because they understand the needs of mass affluent investors.”

Scaramucci, as he is wont to do, took to Twitter to discuss the REIT’s unveiling and pushed back at suggestions that this effort or Opportunity Zones themselves are directly tied to his brief work from the Trump administration.

Article source: https://www.housingwire.com/articles/47683-anthony-scaramuccis-skybridge-capital-planning-big-investment-in-opportunity-zones

DoubleLine’s Gundlach says S&P 500 likely to go below February 2018 lows

NEW YORK (Reuters) – Jeffrey Gundlach, chief executive of DoubleLine Capital, said Tuesday on an investor webcast that the Standard Poor’s 500 Index is likely to go below its February 2018 lows.

Gundlach said global economic growth is slowing and weighing on corporate profitability, which will pressure U.S. stocks. But another dynamic that has been adding to the sell-off in equities is the unwind of the Federal Reserve’s massive balance sheet, he said.

Gundlach, who oversees more than $123 billion in assets and known on Wall Street as the Bond King, said there has been a high correlation between central bank balance sheets and the global equity markets.

With the Federal Reserve shrinking its balance sheet, which quintupled in size after the financial crisis, the equity markets have mirrored that and dropped, Gundlach noted.

“The breadth of the decline in the global equity market is pretty powerful,” he said.

Gundlach, citing an Atlanta Fed research study, calculates $600 billion of Federal Reserve asset unwind is equivalent to three interest rates hikes.

“Maybe that is what really has gotten things in the wrong way,” Gundlach said about the SP sell-off. “The stock market has been following the Fed’s shrinkage of the balance sheet of quantitative tightening to the downside.”

The intraday low for the year in the SP .SPX was on Feb. 9, when it bottomed at 2532.69. The low close for the year was on April 2 at 2581.88. Tuesday, the SP closed at 2636.78.

“Many equity markets are down over 20 percent, which some people call a bear market,” Gundlach said. “I don’t really define bear markets as a certain fixed arbitrary percentage. I think of it more as mood. And certainly, the set up for the equity markets look like a bear market going into the middle of this year…the global equity market which is strongly in a bear market at the present time.”

Gundlach said the bond market rally has been unimpressive given the stock market woes because of the unusual combination of the exploding U.S. deficit and rising Fed interest rates, which he characterizes as a “suicide mission.”

That said, the flat Treasury yield curve gives the Fed “a lot of reasons for concern,” Gundlach said.

Reporting by Jennifer Ablan; Editing by Lisa Shumaker

Article source: http://feeds.reuters.com/~r/news/wealth/~3/kQTEh-WMmr8/doublelines-gundlach-says-sp-500-likely-to-go-below-february-2018-lows-idUSKBN1OA2KK

NAMB launches origination system for mortgage brokers

The National Association of Mortgage Brokers recently announced the launch of a point-of-sale, cloud-based origination system called NAMB All-In. 

Through Calyx Software, NAMB All-In will allow borrowers to initiate loan applications and begin the asset verification process. Notably, the platform helps mortgage brokers manage all incoming online applications, exchange and store documents and provide simultaneous support for both the current and upcoming Uniform Residential Loan Application, the organization explained in a press release.

“We chose Calyx as our partner because its solutions are well-accepted by the broker community, as well as fast to learn and easy to use,” said NAMB Board President Richard Bettencourt.

NAMB also recently joined forces with LendingPad to offer a cloud-based platform to connect broker members with wholesale lenders, called NAMB+LOS.

NAMB All-In is made available to all NAMB members free of charge. Currently, these lenders are participating wholesalers: Stearns LendingPlaza Home MortgageQuicken Loans, Freedom MortgageCaliber Home Loans and United Wholesale Mortgage

 

Article source: https://www.housingwire.com/articles/47666-namb-launches-origination-system-for-mortgage-brokers

Wells Fargo won’t be allowed to grow unless problems fixed: Fed’s Powell

WASHINGTON/NEW YORK (Reuters) – Wells Fargo Co (WFC.N) must keep a lid on its growth until the bank has hardened its risk management policies to prevent any further abuse of its customers, said Jerome Powell, chairman of the Federal Reserve.

In February, the Fed ordered Wells Fargo to freeze its balance sheet, keeping its assets below $1.95 trillion, until it put new checks on senior managers and gave the board new powers to sniff out abuses.

“We do not intend to lift the asset cap until remedies to these issues have been adopted and implemented to our satisfaction,” Powell wrote in a letter to U.S. Senator Elizabeth Warren seen by Reuters.

Wells Fargo has so far failed to satisfy the Fed and the bank is months behind schedule on submitting an acceptable reform plan, Reuters reported last week.

A bank representative did not immediately respond to a request for comment on Powell’s letter. Wells Fargo executives have previously said that they expect the cap to be lifted during the first half of next year.

Warren, a Massachusetts Democrat, has been a vocal critic of Wells Fargo and its Chief Executive Tim Sloan. In October, Warren wrote a letter asking the regulator not to remove the asset cap until Sloan is removed, charging that Sloan was “deeply implicated” in the misdeeds of the past. Wells Fargo has called Sloan’s 30-year tenure at the bank an asset and said he has the full support of its board.

On Monday, Warren faulted the bank for being late with its reform plan and said Sloan must go.

“Wells Fargo is already months behind,” Warren said in a statement. “If the Fed is serious about changing the practices at Wells Fargo that have cost customers their homes or cars or credit scores, it must insist on new leadership at the bank.”

The Wells Fargo sanctions were rooted in a sales practices scandal that broke open in 2016 when it was reported that employees had opened potentially millions of phony accounts in customers’ names without their permission. In his letter to Warren, Powell wrote that what happened inside the bank was “outrageous,” but declined to say whether or not Sloan should continue to lead the bank.

Since the phony accounts scandal, Wells Fargo has said it found abuses in auto insurance, small business loans, mortgage lending and other business lines.

Once Wells Fargo has satisfied the terms of the February settlement, Powell wrote, the Fed board will decide whether or not the bank can grow.

“The decision about terminating the asset growth restriction imposed on Wells Fargo will be made by a vote of the Board,” Powell wrote in the Nov. 28 letter.

Reporting by Patrick Rucker in Washington and Imani Moise in New York; Editing by Neal Templin and Phil Berlowitz

Article source: http://feeds.reuters.com/~r/news/wealth/~3/2c7xQoYBebI/wells-fargo-wont-be-allowed-to-grow-unless-problems-fixed-feds-powell-idUSKBN1O92CP

Struggling hedge funds cling to dollar, U.S. yield curve bets: McGeever

LONDON (Reuters) – Hedge funds have struggled badly in 2018, but would be faring far worse were they not on the right side of two of the most reliable trades of the year: a flattening U.S. yield curve and a stronger dollar.

Both trends remain in place, and as the latest data show, speculators look like holding onto them for the rest of the year.

Funds increased their net long dollar position against a range of developed and emerging-market currencies by nearly $2 billion to $32.09 billion in the week to Dec. 4, according to Commodity Futures Trading Commission figures. That’s the biggest cumulative bet on a rising dollar in three years.

They also increased their net short position in two-year Treasuries by the second largest amount this year and upped their short position in 10-year bonds by only a fraction, effectively a bet that the gap between two- and 10-year yields will narrow.

The dollar is up 5 percent so far this year — up 10 percent from the low in February — while the 2s/10s yield curve is the flattest in over a decade, coming within 10 basis points of recession-warning inversion last week.

(For a graphic on ‘U.S. yield curve’ click tmsnrt.rs/2zVNhqO)

That may suggest these trades are stretched and due for a bout of year-end profit-taking. Perhaps, but they have been among the few shafts of light in a gloomy year for the hedge fund community.

Barclayhedge’s main hedge fund index is down 2.48 percent so far this year and its macro fund index is down 4.06 percent, while the fixed income arbitrage index is up 2.33 percent. These are the poorest annual performances for years.

Eurekahedge figures paint an even bleaker picture. Its main hedge fund index is down 2.40 percent so far in 2018, the worst year in a decade and on course for only the third annual loss since 2000.

The CTAs/Managed Futures index is down 4.21 percent and the Macro Index is down 2.55 percent year to date, both heading for their only annual loss since 2000. Even the Fixed Income index, up 0.37 percent, is having its worst year since 2008.

And that’s despite speculators, by and large, being on the right side of the dollar and yield curve trades, central to which has been how much further the Federal Reserve plans to tighten U.S. monetary policy.

Up until a few weeks ago, the Fed seemed committed to raising rates at least three times next year. Growth is steady, unemployment is at a 50-year low, and most of the incoming economic data is still looking fairly solid.

Yet markets didn’t quite buy into that glass-half-full view. Hedge funds may have extended their short two-year bonds position — it’s now 361,560 contracts, within 1,000 of the record short from last month — but have dramatically cut back their short position in longer-dated bonds.

(For a graphic on ‘CFTC 2-year Treasuries positions’ click tmsnrt.rs/2SHoQ7I)

The result has been a collective bet that the yield curve will flatten, which is exactly what has unfolded. Parts of the curve at the short end have even inverted already, such as the 3s/5s curve.

If curve flattener trades are to be unwound, it will most likely be led by the short end. Funds’ net short position in 10-year Treasury futures is a sizeable 293,186 contracts, but it’s worth bearing in mind that it was more than 750,000 as recently as September.

A year ago, funds were actually long 10-year bonds, so positioning in this part of the curve isn’t extreme.

(For a graphic on ‘CFTC 10-year Treasuries positions’ click tmsnrt.rs/2zQeBa4)

Hedge funds’ dollar bets look more stretched, especially now that the Fed’s path next year is less clear-cut. Officials from Chair Jerome Powell down now suggest rates may be close to “neutral”, and money markets no longer fully price even one quarter-point rate hike in 2019.

Yet even if the Fed does take its foot off the gas next year, the likelihood of euro zone, UK, or Japanese policy being tightened to any significant degree next year remains small.

The dollar could continue to enjoy its yield advantage for a while yet.

(The opinions expressed here are those of the author, a columnist for Reuters)

By Jamie McGeever, editing by Larry King

Article source: http://feeds.reuters.com/~r/news/wealth/~3/NHPHJw5UYlc/struggling-hedge-funds-cling-to-dollar-u-s-yield-curve-bets-mcgeever-idUSKBN1OA16R

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