Redfin to lay off 450 employees after new deal with Zillow

Plus: NYC real estate executive pleads guilty to wire fraud

February 14, 2025

Happy Friday! There's a long weekend ahead for us — we're out Monday in observance of the holiday, and back in your inbox bright and early Wednesday.

Today's newsletter is 826 words, 3½ minutes.

Disclaimer: Average mortgage rates as of Feb 13, 2025. © MND Daily Rate Index.

1. Redfin to lay off 450 employees after new deal with Zillow

Zillow will pay Redfin $100 million to become the exclusive partner for multifamily rental listings, a deal expected to benefit both companies long-term. However, the partnership comes at a cost for some Redfin employees.

In an SEC filing ahead of its fourth-quarter earnings report, Redfin announced plans to restructure its rentals segment — a move that will “eliminate certain employee roles” that support the rentals division.

An estimated 450 positions will be cut between February and July 2025, and the restructuring is expected to be completed by the end of September.

“A layoff of this magnitude is painful, but this partnership is best for our customers and for Redfin overall. Our focus remains on building the best online home search, and pairing it with the best brokerage, lending and title service.”

Redfin Spokesperson

2. 1 in 3 buyers now rely on AI during the mortgage process

According to a new survey from Veterans United Home Loans, one in three homebuyers (32%) now rely on AI for tasks like home searches, virtual tours, and mortgage calculations.

  • AI adoption is highest among younger buyers, with 60% of Gen Z and 47% of millennials using it daily.

Despite AI’s growing role, buyer sentiment remains mixed: 31% express concern, 29% embrace the technology, and 28% remain undecided. In response, mortgage lenders are rolling out AI-driven tools to meet shifting consumer expectations.

3. Refinance applications jump to highest level since October

Mortgage rates moved slightly lower again last week, keeping refinance demand on the rise.

Applications to refinance a home loan jumped 10% compared with the previous week and were 33% higher than the same week one year ago, according to the MBA’s seasonally adjusted index. That came after a 12% gain the previous week.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($766,550 or less) decreased to 6.95% from 6.97%, and points remained unchanged at 0.64 (including the origination fee) for loans with a 20% down payment.

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4. More Nuggets

🏢 CFPB’s new leadership terminates dozens of employees. (CNBC)

🔊 Leaked Audio: Jamie Dimon is fed up with remote work, 'I don't care how many people sign that f—ing petition'. (Barrons)

🤖 BofA’s CEO asked AI for mortgage data and got a picture of a house. (Bloomberg)

🧯 Hawaii Supreme Court gives green light to $4 billion Maui fire settlement. (CHN)

💸 Mr. Cooper delivers $204M profit, bets big on AI. (NMP)

🔮 Powell predicts a time when mortgages will be impossible to get in parts of US. (YahooFinance)

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— Dave Krichmar CEO

5. NYC real estate executive pleads guilty to wire fraud

Elchonon "Elie" Schwartz, 46, admitted to running a $62.8 million investment fraud scheme tied to real estate projects in Atlanta and Miami Beach.

Prosecutors say Schwartz raised funds from over 800 investors but diverted the money for personal use, including luxury watches and stock trading. The corporate entities he formed later filed for bankruptcy.

Schwartz pleaded guilty to wire fraud and faces up to 20 years in prison.

"Seeking to do nothing more than pad his own bank accounts and buy expensive luxury items, Elie Schwartz betrayed hundreds of investors who sought the opportunity to invest in these commercial real estate projects"

Richard Moultrie Jr., acting U.S. attorney for the Northern District of Georgia

6. DOGE targets HUD contracts

The Trump administration is reviewing hundreds of contracts at the Department of Housing and Urban Development, raising concerns about potential agency downsizing.

An internal email sent Monday instructed employees to justify contracts based on necessity, diversity components, and contractor competence. Staff were also asked to designate a “contract champion” to vouch for each deal.

The request, marked as urgent, has intensified worries that HUD could be targeted for significant cuts by the Department of Government Efficiency (DOGE), an initiative led by Elon Musk.

Union leaders and employees voiced mixed reactions. Some fear the scrutiny could lead to dismantling key functions, including rental assistance and affordable housing initiatives. Others see an opportunity to address inefficiencies, particularly in procurement and technology investments.

☀️ You’re all caught up. See you on Wednesday!

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