Monday Morning Cup of Coffee: Facebook responds to HUD’s housing discrimination allegation

Monday Morning Cup of Coffee takes a look at news coming across HousingWire’s weekend desk, with more coverage to come on larger issues.

In case you missed it late Friday, the Department of Housing and Urban Development accused Facebook of allowing landlords and homeowners to discriminate against prospective renters and buyers based on their race, color, religion, sex, familial status, national origin, disability, or other factors.

HUD’s complaint, which came after months of investigations into Facebook’s ad practices, alleges that Facebook allows advertisers to purposefully exclude certain people from seeing housing ads based on a number of factors, many of which constitute violations of the Fair Housing Act.

Under the Fair Housing Act, landlords, homeowners, and the like are prohibited from engaging in discrimination in housing transactions including print and online advertisement on the basis of race, color, national origin, religion, sex, disability, or familial status. 

Consider it a modern, technologically enhanced form of redlining, wherein Facebook allows advertisers to use its mountains of data to target housing ads to very specific audiences, but instead of simply being ignored because of the area you live in, you’re disqualified because you have children, are a woman, or are from another country.

Facebook, for its part, said that discrimination is not allowed on its site and said that it plans to respond to HUD’s allegations in court.

“There is no place for discrimination on Facebook; it’s strictly prohibited in our policies,” a Facebook spokesperson said in a statement provided to HousingWire. “Over the past year we’ve strengthened our systems to further protect against misuse. We’re aware of the statement of interest filed and will respond in court; and we’ll continue working directly with HUD to address their concerns.”

When announcing the complaint against Facebook, HUD said that the allegations are not a determination of liability. The next step in the process is a formal investigation, after which HUD may decide to file a formal charge of discrimination against the site.

For now, we wait and watch.

In other news, Flagstar Bancorp was freed last week from increased Federal Reserve oversight that’s been in place for more than eight years.

The Fed and Flagstar announced separately last week that the Fed’s supervisory agreement was being lifted. The agreement included requirements that Flagstar submit a capital plan annually to the Fed and receive written non-objection from the Fed before paying a dividend or repurchasing stock, taking on or renewing holding company debt or engaging in affiliate transactions.

“This is a major milestone for our company, representing the last major regulatory issue with the old Flagstar,” said Alessandro DiNello, Flagstar’s president and CEO.

“This action reflects our successful effort in building a strong financial institution that can deliver solid results within the framework of a strong risk and compliance structure,” DiNello continued. “The lifting of the agreement ushers in a new era for our holding company, providing more flexibility in entering into strategic transactions.”

DiNello also said that the company is now looking forward to continuing its growth of the last few years, which saw the company grow its consumer direct operation by adding team members from Capital One’s shuttered mortgage division; acquiring Stearns Lending’s delegated correspondent lending business; adding Opes Advisors, a full-service mortgage bank and financial advisory firm, to its list of acquisitions; and acquiring Santander Bank’s warehouse lending portfolio.

“It’s been a long road to reach this positive outcome. I would like to personally thank the entire Flagstar team for their dedication and our shareholders for their support,” DiNello said last week. “I also appreciate the Fed’s collaboration over the past several years to strengthen our company. We are now focused on continuing our journey to build a great company.”

In real estate news, an Austin-based real estate startup just raised $2 million to help home sellers keep more of their money when selling their home.

ListingSpark, which was founded in 2013, announced recently that it secured $2 million in funding from Silverton Partners to fund its expansion.

ListingSpark offers home sellers a different model than the traditional commission-based real estate process or the newer flat-fee offerings that have sprung up in recent years.

According to ListingSpark, the company offers a per-day pricing model where clients pay “only dollars a day” to get access to many of the same tools real estate agents use, including the MLS and market analysis, plus marketing assistance and agent support.

The company also recently launched its own title agency, which it calls Spark Title. By offering a title and escrow solution, ListingSpark believes it can ease the home buying and selling process even more.

And with its new funding, the company plans to expand into new markets, offer more services, hire agents and staff, and build out Spark Title.

“It has always been our vision to provide a turnkey solution for buyers and sellers who want a streamlined process and a smooth transaction without having to give up so much in commissions,” Brett Appolito, co-founder and CEO of ListingSpark, said recently.

“Silverton Partners has given us the foundation we need to achieve smart growth,” Appolito continued. “We will continue to add services that help home sellers, buyers and investors buy and sell properties with minimal hassle and maximum return.”

Lastly, there’s about to be some stock maneuvering by the WMIH Corp., which recently absorbed Nationstar Mortgage (the nonbank now known as Mr. Cooper) via a billion-dollar merger.

When the companies announced the completion of the merger earlier this month, they said that they were considering a number of corporate actions to address various financial situations that resulted from the merger.

One of those was the fact that WMIH’s stock was worse far less per share than Nationstar’s stock, due partly to the fact that WMIH (the former parent company of Washington Mutual) had considerably more outstanding shares than Nationstar did.

As of the close of Friday’s trading, WMIH’s stock was at $1.57 per share, while Nationstar’s stock was above $18 per share before it was delisted at the end of July as the result of the merger.

To address this issue, WMIH announced that its board recently a reverse stock split that would see its total authorized shares reduced from 3.5 billion to 300 million.

The 1-for-12 reverse split is subject to shareholder approval, but WMIH Chairman and CEO Jay Bray said that he believes the stock action to be in the best interest of the company.

“Following the merger of WMIH with Nationstar Mortgage, the board and management have focused on exploring initiatives to better reflect the strategic position of the combined company,” Bray said. “We believe this proposed change will enhance the appeal of our common stock to the financial community, including institutional investors and the general investing public.”

The company said that it expects to have a special meeting in October to allow shareholders to vote on the proposal.

And with that, have a great week everyone!