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#FannieGate; CoStar Buys Website; Luxury boom ✨

By December 20, 2020 No Comments

SEC targets #FannieGate investment group

Please be advised Rise&Shred won’t send an alert this Thursday and Friday, unless some news breaks and it better NOT, but we’ll be back Monday!

OK, the news. If you go to Twitter and type in #FannieGate you will be presented with a series of accounts claimed to be run by investors whose life savings & college grad $$$ was stolen by the Obama administration in 2012 via The Net Worth Sweep of Fannie Mae and Freddie Mac.

But, be warned, they are numerous and vocal. They often attack leaders of the Treasury and FHFA for inaction on the above grievance. Now, the SEC is striking back, even as the cases surround the issue are still being decided in the courts.

This week the SEC announced an investigation The SEC's complaint alleges that, from at least June 2015 until June 2018, CapWealth (a big Fannie and Freddie investor), principal Tim Pagliara and advisor Tim Murphy, failed to adequately disclose conflicts of interest arising from their selection of mutual fund share classes that charged 12b-1 fees, instead of lower-cost share classes of the same funds that were also available to clients.

NOTE: Neither Fannie nor Freddie are named in the complaint.

In true, colorful #FannieGate fashion, Pagliara responded with the following: “We do not negotiate with regulatory thugs,” Pagliara is quoted in this paywalled article. “Principle is important, my integrity is not negotiable, and I will not settle with them,” he added.

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CoStar buys Houses.com for at least a million dollars

CoStar Group, a leading provider of commercial real estate information, analytics and online marketplaces, last week bought Houses.com.

According to a release, this purchase formally sets the stage for its entry into residential real estate marketplaces.

“With the acquisition of the Houses.com domain name, CoStar Group plans to develop a vibrant national marketplace for agents and owners to successfully sell homes without disenfranchising or disintermediating valuable real estate agents in the process,” reads the statement.

Houses.com long advertised it was for sale. The site claims to draw 1.5 million visits a year already, despite offering no content. However, the opening bid for Houses.com was set at a minimum of $1million, so it’s anyone’s guess how much CoStar ending up paying for it.

On December 16, 2020, the Federal Trade Commission cleared CoStar Group’s acquisition of Homesnap, Inc., which provides real estate brokers with a mobile platform and other technology for managing and analyzing their listings and the housing market.

CoStar Group already owns marketplace verticals in the commercial real estate space with Loopnet.com, Cityfeet.com and Showcase.com; the multifamily space with Apartments.com, ForRent.com, ApartmentFinder.com, ApartmentHomeLiving.com and Apartamentos.com. Plus also websites in the land acquisition space.

🔥  Market Update 🔥 

With Movement Mortgage

Here’s why luxury homes sales are up 100%

Loving this piece on the wealthy in the LA Times (subscription required) which shows that some rich people will pay up to $25,000 to get the COVID-19 vaccine quicker than everyone else.

In yesterday’s Rise&Shred we brought you some lists of the wealthiest people and where they could live. It was a fun nod to those who’ve done well for themselves and their families. Honestly, it lacked the kind of depth we’d like to write more about. It was fun, but lacked factual fundamentals.

We think we solved the problem. A blog from Zelman and Associates (registration required) sought to put some numbers behind the gains in luxury housing. And, it’s pretty extraordinary.

By their measurement, and trust us, they know, September and October NAR data “jumped off the page with north of 100% year-over-year growth reported for homes $1 million and above.”

And in the blog they explain the drivers of the data.

“In our view, the primary catalyst to strengthening high-end demand is no different than the broader market – mortgage rates that have continuously reached new record lows throughout 2020,” the blog states. “That said, the high-end segment also appears to be incrementally benefiting from factors such as pandemic-driven mobility of luxury consumers out of high-cost urban areas, the desire and need for larger homes to accommodate work-and-school-from-home arrangements and the wealth effect of a rising stock market.”

Zelman predicts the strong sales will continue in 2021. But let’s end this on a low note: Bloomberg reports that the pandemic’s slowdown in real estate deals has cost New York City $1.2 billion in lost revenue so far this year.

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