Monday Morning Cup of Coffee takes a look at news coming across the HousingWire weekend desk, with more coverage to come on bigger issues.
Online real estate company Redfin decided to finally jump into the stock market, filing an initial public offering with the U.S. Securities and Exchange Commission on Friday.
According to an article in GeekWire by Taylor Soper, the Seattle-based company seeks to raise up to $100 million, marking its first ever public offering under the symbol “RDFN.”
However, it is still not clear when the company would go public or how many shares it will offer.
From the article:
The company, which sits atop the GeekWire 200 list, has 2,427 employees, up from 752 in 2013. Redfin has raised nearly $170 million to date from investors like Madrona Venture Group, Greylock, Draper Fisher Jurvetson, Vulcan Capital, and Tiger Global. Each firm has around a 10-to-12 percent stake in Redfin.
The 13-year-old self-described “technology-powered real estate brokerage,” which has been a recent candidate to test the public markets, is active in more than 80 markets across the U.S. It has helped customers buy or sell more than 75,000 homes worth more than $40 billion combined.
There’s been a shortage of companies choosing to go public over the last few years due to adverse market conditions. According to an article in Reuters by Lisa Lambert, “Last year IPOs in the United States fell by more than a third from 2015, and many of those 102 share offerings ended up trading below their debut price.”
And housing companies are no exception to this struggle. loanDepot attempted to go public back in 2015 but ended up pulling it due to adverse "market conditions." The company was scheduled to begin trading under the symbol LDI.
However, now even loanDepot is reportedly once again exploring the possibility of reviving a stock offering. So far, there are only rumors of a possible IPO, but when loanDepot Chairman and CEO Anthony Hsieh originally announced the cancellation last year, he didn’t rule out the possibility of doing one in the future.
The GeekWire article included a copy of the SEC filing, which included a “letter from the team”, signed by Glenn Kelman, the company’s CEO; Scott Nagel, president of real estate operations; Chris Nielsen, chief financial officer; Bridget Frey, chief technology officer; Adam Wiener, chief growth officer; and Anthony Kappus, general counsel. Here’s a small snippet from the letter. Check out the full letter on Page 79 of the SEC filing.
This prospectus will tell you what we do: our company runs a website to show people homes for sale, and employs our own real estate agents to help people buy or sell those homes. This letter tries to explain who we are.
We think of ourselves as idealists, who got into this business to make real estate better for consumers, not just ourselves. Our ideals are important when we want to earn customers’ trust: to take our advice about walking away from an easy sale on the wrong house or about paying more in a bidding war. At a time when our customers are hauling everything they own across the country to start a new family, a new job, a new life, what they most need us to be is completely on their side.
And this is our mission, in a sales-mad, baloney-gorged world, to be the truth-teller, the fee-squeezer, the game-changer. Our idealism may not benefit stockholders over months or quarters, but we believe that over years and decades it will deliver the best result
If you got lost in all the housing data that came out in June, don’t worry. We understand that there’s a bunch of info to digest there. And thankfully, so does the National Association of Realtors.
For a quick pulse on the state of the housing market in June, NAR released a “June 2017 Housing Minute” video, giving viewers all the housing highlights from last month in 44 seconds.
In the description for the video, NAR stated, “Last month was an uneven month for the housing market. The robust demand for buying a home helped spur an uptick in existing sales, but weak inventory levels continued to push up price growth while slowing the number of home contract signings.”
Check out the full video from NAR below.
Newly created fintech company Finastra is reminding the industry that it’s not done growing, as it is currently hiring in the U.S., Canada, the U.K. and across Europe and Asia-Pacific, according to an article by Dan Butcher in efinancial careers.
The newly formed company is the result of Vista Equity Partners acquiring D+H, a Toronto-based provider of technology solutions to financial institutions, in a $3.6 billion deal.
Earlier this month, Vista Equity merged D+H, which was a winner of HousingWire Magazine’s 2017 HW Tech100 as one of the top tech companies in housing finance, with Misys, a global software provider for retail and corporate banking, lending, treasury and capital markets, investment management and enterprise risk based in the United Kingdom. Once merged, the two companies rebranded as Finastra.
From the article:
With around 10,000 employees across offices in 42 countries, surely there will be redundancies – there always seem to be opportunities to cut costs by trimming headcount after a merger or acquisition. Despite the fact that it will take some time to figure out the exact structure of the combined firm, Finastra is currently hiring in the U.S., Canada, the U.K. and across Europe and Asia-Pacific.
The company says it wants to hire people in sales, ideally with banking experience, finance, legal, IT support and human resources.
Above all, Finastra is recruiting software developers to work on its open Fusion software architecture and cloud ecosystems.
For folks looking to still weigh in on ways to improve access to credit for qualified mortgage borrowers with limited English proficiency, they’re in luck.
Back in May, the Federal Housing Finance Agency issued a Request for Input on this issue in order gauge how they can better serve these types of borrowers. The FHFA originally required all input to be submitted by July 10, 2017. From here, the FHFA would develop a multi-year plan appropriate for the enterprises to support improved access.
However, if you weren't able to submit yours in time, it’s not too late.
The FHFA announced it is extending the deadline from July 10 to July 31 to allow more time for interested parties to provide input on issues facing qualified mortgage borrowers with Limited English Proficiency throughout the mortgage life cycle process, including mortgage lending and servicing.
But still hurry. The new deadline isn’t too far off.
For those of you in the office today, happy early Fourth of July!
And while the holiday is making a quiet start to the week, it doesn’t mean there’s nothing going on in the finance world. The latest employment numbers come out on Friday, and even though it’s a little further out, Financial Services Committee Chairman Jeb Hensarling, R-TX, officially announced that Federal Reserve Chair Janet Yellen will appear before the Committee on Wednesday, July 12. She will deliver the Federal Reserve’s semi-annual Monetary Policy Report to Congress and to discuss the state of the economy.
Until then, enjoy the fireworks and check back this week for the latest news on the housing finance.