December 19, 2014

American Realty Capital Chair Resigns

It took Nicholas Schorsch seven years to build one of the biggest real-estate empires in the U.S., and about 15 minutes for him to cede control of its crown jewel.

Mr. Schorsch on Monday resigned from the boards of American Realty Capital Properties Inc., along with 15 other companies he oversees, as revelations of accounting irregularities continued to reverberate through his collection of commercial-property assets valued at more…

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Cedric the Entertainer’s ‘Monopoly’ House

Cedric Kyles, known as Cedric the Entertainer, in his home near Los Angeles.

Actor-comedian Cedric Kyles, 50, known as Cedric the Entertainer, appeared most recently in the film “Top Five” and stars in TV Land’s “The Soul Man.” Next year, he will host the CW network’s “Barber Battle,” a TV reality show. He spoke with Marc Myers.

I grew up in a Monopoly house. It wasn’t bright green or anything. It just looked like one of the houses from the game—square, one-story. Not a lot of space, but lots of love.

The house was in Caruthersville, Mo., which is on the Mississippi River about an hour-and-a-half north of Memphis, Tenn. My grandmother owned the house, and it’s still in the family. We all lived there in the late ’60s—my younger sister, Sharita; my mother, Rosetta; my grandmother Rosie; and my older cousin Eric. My mom and dad were separated.

The house was cozy and very grandmotherly. There was a small kitchen, a living room and three bedrooms. My sister and I shared one of them with my cousin, my mother had one and my grandmother had the other. When I was around 8, my grandmother had a small addition built in the back, right off the kitchen. It was for my mother, so she could study. She had just finished college at Lincoln University in Jefferson City and was returning home. She planned to go on for her master’s degree at Southeast Missouri State University but first was taking a year off to teach in Braggadocio, about 20 minutes away.

Even though Eric was technically my cousin, I called him “Uncle Eric.” He was 12 years older than me and looked out for us, though he didn’t have to do much. Our neighborhood was great—there were kids with bikes everywhere. There was a big pecan tree near our house. In the fall, we’d wait for the nuts to fall and gather them to eat after school. My friend James had a front lawn that was so big we thought it was a football field for real. In our neighborhood, everyone’s mother was allowed to whoop you if you got into trouble. You’d be pleading, “Can’t you wait until my mother comes home?” Not a chance.

Our house was painted light blue, and while it had a small front porch, we all piled into my mother’s room in the summer. It was the new part of the house and the only room with an air conditioner. The bedroom I shared with my sister and Eric was really just for sleep, but there was enough room on the wall next to my bed to put up pictures of cartoon characters like Speed Racer. Eric tacked up a bunch of Jet magazine “Beauty of the Week” models in bikinis, but my grandmother made him take them down.

Uncle Eric was a card. He was the first person I knew who could make people laugh.

Uncle Eric was a card. He was the first person I knew who could make people laugh. His delivery was conversational and in the moment, and his style was relaxed and familiar. When his friends came over, he’d hold court on the front porch, making observational jokes about everyday situations that had happened in the neighborhood. He also had a way of spotting quirks in people’s behavior and making fun of them without being mean-spirited. The more people laughed, the more popular he became.

My grandmother also was funny. She’d drop a dime on you when you were out of bounds and had enormous matriarchal energy. She was queen of the one-liners and quick with a comeback. If someone said something slick, she’d always have a comeback, to keep that person in check. One time, my cousin, Rosalind, was staying with us and took the phone out to the porch. Our phone had this really long cord that ran all the way through the house. My grandmother said to her, “What are you doing?” My cousin said she was on the phone. My grandmother said, “Not if my screen door is open.”

Grandma was on top of everything. She could command the whole house from that porch. From out there, she had this cone of vision and could see if the lights or air conditioner were on for no reason or if someone had left the refrigerator door open.

My mother was always determined to get us out of Caruthersville. She was the youngest of six brothers and sisters, and her spirit and tenacity to always finish what she started left a deep impression on me. She also was serious about taking care of us. She’d often talk to my sister and me in the living room about what she wanted us to accomplish. She also worked to make sure I knew that vocabulary and diction were important. When I used words incorrectly or fell into slang, she’d say, “Ain’t? Excuse me? Huh? What?”

In 1977, after I completed elementary school, we moved three hours north to Berkeley, a suburb of St. Louis. My mother had been hired by the Ferguson-Florissant School District nearby. Ours was a ranch-style house with a public swimming pool at the end of the block that felt like it belonged only to our neighborhood. Uncle Eric stayed behind at my grandmother’s house and still lives there.

Berkeley is about 15 minutes northwest of St. Louis, so I had to go to a city school, but I could handle it. For three months, we had lived with my aunt and her 11 children in North St. Louis. So by the time we moved to Berkeley, I had a tough enough edge to protect myself in school. My humor also deflected a lot of trouble.

Being funny made me popular, but it also got me into trouble. Once you know you can crack people up, you start doing it at the wrong times. But because my mother taught in the school district, teachers would warn me by saying, “Cedric, I know your mother,” which always worked.

In my teens, I began pooling the characteristics of people I met in school, in my neighborhood and in St. Louis. All of those quirks came in handy later. Cafeteria Lady from my TV show in 2002 and 2003 was a real person from my high school, and my Eddie character from the “Barbershop” movies was a combination of well-spoken elders I went to church with combined with the bravado of people in barbershops waiting for a haircut and shave.

Today I live with my wife, Lorna, and our three children in an 11,000-square-foot French chateau-style house that I built in the San Fernando Valley, north of Los Angeles. We moved in there in 1993, and I still can’t believe how much space we have compared to my childhood homes in Missouri. I also built my mom a home back in Missouri. When I hear our kids talk to their friends about “their house,” I can’t resist cutting in: “Y’all have a room. Your mother and I have a house. Unless, of course, you’re going to put something on the bills.”

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Home-Builder Confidence Declines

WASHINGTON—A gauge of home-builder sentiment ticked down this month, the latest mixed signal for the U.S. housing recovery.

An index of builder confidence in the market for new single-family homes fell by one point to a seasonally adjusted level of 57 in December, the National Association of Home Builders said Monday.

A reading over 50…

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2014 Economy and Housing: From Deep Hole to Whimper

Referring to its “roller-coaster
pattern of economic growth,” Fannie Mae summarized the economy and housing in
2014 as a year that started with a deep hole and ended with a whimper.  A brutally cold first quarter put economic
growth in that deep hole at the beginning but it came back “with a vengeance”
making the second quarter the strongest for growth in more than two years.  The third quarter saw growth flag again and
it “is poised to
weaken further, as some unsustainable forces that drove activity in the third quarter
reverse in the final quarter.”

Fannie Mae’s Macroeconomic Forecasting
Team headed by Senior Vice President and Chief Economist Doug Duncan reprise
2014 in the December edition of its Economic and Strategic Research
report.  They see the year overall as one
in which economic growth comes in at what they call an unspectacular pace of
2.1 percent, 1 percentage point below the 2013 pace.  Next year however will be better, driven by improving
private domestic demand, a better outlook for consumer income, rising consumer
and business confidence, a broadening housing recovery and they expect full
year 2015 growth of 2.7 percent. 

The rising trend of the “quits rate,” a
key indicator of labor market confidence from the Job Openings and Labor
Turnover Survey (JOLTS) supports, the Team says, its view that wage gains are
poised to accelerate.  Private wages in
the Employment Cost Index tend to lag the quits rate. Such improving income
prospects they say are key to increasing the sub-par rate of housing formation but
the full recovery of the housing sector will require truly meaningful gains in
that income. 



This year has been a disappointing one for
housing recovery.  Improvement was
tentative, especially for the single-family sector which was held back first by
the aforementioned severe winter weather and then by a spike in mortgage
rates.   While rates have stabilized, demand remains
low as homebuyers have not yet moved aggressively into the void left by exiting

Recent indicators, the economists say,
have been generally positive; existing home sales were up in both September and
October, increasing to the highest levels since the previous fall, and
inventories reached their lowest levels since March.  New home sales, however, improved little in
the last half of the year. 



Nonetheless the National Association of
Home Builders’ measure of builder confidence rebounded sharply in November
although building itself has been mixed all year.  Multifamily building starts have been the
strongest since 2006 and are expected to post double-digit gains for the fourth
straight year while single family permits and starts have been much more modest
with starts up only 10 percent from last year. 
All residential construction starts are expected to come in below one
million units which the economists called “anemic” by historical standards.



Most of the major indexes continue to show
price growth moderating.  Still tight
inventories continue to support healthy price gains even in the face of soft
homebuyer demand.



The Team says it expects 2015 will bring “a
broad-based but measured housing recovery amid improving consumer sentiment and
income growth, slowly easing lending standards, and continued historically low mortgage
rates.”  Long term Treasury yield will remain
depressed because of soft spots in several of the globe’s economies and they
expect that, as the Federal Reserve begins to raise short-term interest rates
in the third quarter of 2015, the yield curve will flatten further.  Fixed mortgage interest rates are expected to
stay below 4.5 percent through 2015, continuing to support the housing market. 

Fannie Mae projects housing starts will
increase about 22 percent and total home sales will grow about by about 5
percent after finishing 2014 down 3 percent. 
Applications for refinancing, according to the Mortgage Bankers
Association, have plummeted, “setting the stage for a purchase market in 2015.”

Total mortgage applications are expected to
edge up
next year, after falling almost 40 percent this year.  Fannie Mae projects originations to total
$1.13 trillion reflecting an increase in purchasing that will slightly more
than offset an expected decline in refinancing of 37 percent.  This drop will be in addition to an expected
decrease of 40 percent in refinancing in 2014 and 60 percent in 2013.  Total single-family (1- to 4-unit properties)
mortgage debt outstanding should post a slight decline in 2014 before picking
up modestly in coming years.


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Mortgage Rates are Actually Higher Today

Mortgage rates moved higher at a much quicker pace today.  This runs counter to the most widely-circulated weekly rate report from Freddie Mac, which indicates a new low for 2014.  The Freddie data isn’t wrong, just a little behind.  Still, it’s important for consumers to understand that today’s rates are no longer the year’s lowest.

This is a fairly common discrepancy between Freddie’s rate survey and reality, and it’s only a problem when markets move sufficiently after their survey results are in.  Considering that usually occurs by Tuesday, you may already be able to guess why such a survey is now outdated.  Simply put, yesterday and today combined for the biggest 2-day move higher in rates since April.  Today’s adjustment was much bigger than yesterday’s, and was completely unavailable to be counted in the survey.

In terms of rate quotes, the most prevalent conforming 30yr fixed rate for top tier borrowers was on the verge of moving down to 3.75% as of Tuesday (so it makes good sense that this week’s Freddie survey was the best of the year), but moved back up to 3.875% yesterday.  While 3.875% is still slightly more prevalent, we’re closer to 4.0% being the runner up at most lenders.  In almost all cases though, the costs associated with 3.875% make it a sweet spot in terms of efficiency.  That could mean it makes sense to pay extra upfront costs to move down to 3.875% if you’re currently being quoted 4 or 4.125.

Loan Originator Perspective

“Yesterday’s weakness continued into today, with the benchmark 10 year
finding some support around the 2.22 level. I continue to favor
floating all January closings and have locked up all December closings
already. If you are still floating, and closing in December, i think i
would continue to float into tomorrow. The rate sheets i have viewed
looked like lenders took away much more than was justified which isnt
surprising with the amount of weakness we saw yesterday and this
morning. I suspect that if we just hold at current levels, lenders will
pass along better pricing.” -Victor Burek, Open Mortgage

“With the little bounce higher today in rates, it may be a good time to
lock your rate and put that worry to bed. If rates improve, a
renegotiation can be had. Floating is a risk that I would not take
considering we’ve bounced off 2014 lows.” -Michael Owens, Vice President of Mortgage Lending, Guaranteed Rate


Today’s Best-Execution Rates

  • 30YR FIXED - 3.875
  • FHA/VA – 3.25
  • 15 YEAR FIXED –  3.125
  • 5 YEAR ARMS –  3.0 – 3.50% depending on the lender

Ongoing Lock/Float Considerations

  • The hallmark of 2014 has been a narrow range in rates.  Too many market participants bet on rates going higher in 2014, and markets punished that imbalance with a paradoxical move lower.  This continues to serve as a reminder that prevailing beliefs about where rates will go won’t necessarily be correct simply because they’re the most prevalent.

  • European bond yields have trended constantly lower in 2014, thus playing a prominent role in keeping US rates lower than they otherwise might be.  Many feel that Europe will continue to slide until their central bank engages in US-style quantitative easing.  Some see this happening in early 2015.  In any event, we’re looking for a turn in Europe, first and foremost, before worrying about the longer-term trend in bond markets being at serious risk of reversing.
  • Much of 2014 could be considered “sideways to slightly lower” in terms of mortgage rates.  All things considered, it actually has been a remarkably gentle drift lower.  Things became less gentle in mid October when rates briefly broke into the high 3’s.  They came back for a more gradual, determined push into the 3’s in December.  Some of the late-year strength is being chalked up to an epic slump in oil prices.  This drags inflation expectations lower, which is a net-positive for interest rates.

  • As always, please keep in mind that the rates discussed generally refer to what we’ve termedbest-execution(that is, the most frequently quoted, conforming, 30yr fixed rate for top tier borrowers, based not only on the outright price, but also ‘bang-for-the-buck.’  Generally speaking, our best-execution rate tends to connote no origination or discount points–though this can vary–and tends to predict Freddie Mac’s weekly survey with high accuracy.  It’s safe to assume that our best-ex rate is the more timely and accurate of the two due to Freddie’s once-a-week polling method). 

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MBS RECAP: Bond Markets Flat-Line After Overnight Weakness

Depending on where you want to draw the line between the overnight and domestic sessions, nothing really happened today.  Bond markets were basically done doing much of anything by 9:15am, and even that early morning movement was primarily driven by late-day trading in Europe. 

It was as if yesterday’s FOMC Announcement was the last major event that market participants were waiting around for and the overnight session simply gave Asia and Europe a chance to respond.  That’s the most conventional way to view today’s movement, anyway.

The counterculture frame of reference (and my personal favorite) is that European markets were already turning by Tuesday, but logically would be waiting to see what the FOMC Announcement had to say, if anything.  It ended up saying nothing, and thus got out of the way for the Eurozone-led trading to continue pushing the global “risk-on” rally in the same direction.  This jives quite well with domestic bond markets being done moving by morning (to quantify that, 10yr yields didn’t move more than 1.5bps in either direction from 9:15am.  That’s nothing).

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New Life for an Old Industrial Property — in Atlanta

The former Sears, Roebuck  Co facility that Jamestown Properties is converting into a mixed-use destination in Atlanta.

No one would argue that New York and Atlanta are very different markets. With low vacancy rates and high rent, New York has one of the strongest commercial-real-estate markets in the country. Atlanta, with high vacancies and lackluster rent growth, is one of the weakest among major cities.

Yet Jamestown Properties is testing its luck down South by applying a formula that it has successfully honed in New York, Boston, San Francisco and elsewhere: converting massive industrial buildings into fashionable properties filled with boutique shops, gourmet food outlets and office tenants willing to pay a pretty penny.

Jamestown owns New York’s popular Chelsea Market, a retail and office property that was converted from a former Nabisco factory famous for creating the Oreo cookie. Since its retail space launched in 1997, Chelsea Market has attracted trendy food shops; media companies, including the Food Network; and Internet firms, such as


In Atlanta, after three years of construction, Jamestown in August opened the first of a multiphase rollout of Ponce City Market, a former Sears, Roebuck Co. distribution and retail center that is being transformed into a mixed-use complex to include retail space, restaurants, apartments and offices.

The complex’s nine-story main building has 1.1. million square feet of leasable space and is the largest still-standing brick building in the Southeastern U.S., according to Jamestown, which purchased the four-building property from the City of Atlanta in 2011 for $27 million.

In a city where new, modern glass office buildings abound, Atlanta’s Ponce City Market has old-world brick, high ceilings and open-office plans that are viewed as distinctive. That charm is attracting some high-profile tenants, including architecture firm SLAM Collaborative, Watertown, Mass.-based health-technology firm AthenaHealth and a growing number of other technology firms.

In Atlanta, “there’s nothing like it,” says

Sonny Molloy,

a vice president at Marcus Millichap.

It is perhaps too early to call the project a success, but in the first and largest building that opened in August, 50% of the 259 loft-style residences have been leased, 69% of the 300,000 square feet of retail space is rented and 75% of its office space has been leased, according to Jamestown, while two adjacent smaller buildings are set to open in the second half of next year. Jamestown estimates its total investment in the project will be $300 million.

SLAM, the architecture firm, relocated last month from a warehouse district near the city’s Emory University to 6,451 square feet of loft-style office space at Ponce City Market. SLAM will pay more per square foot in its new digs, but, pointing to the original brick walls and exposed concrete columns and floors,

Sidney Ward,

a principal there, says the higher rent is worth it. “The workplace environment is more aligned with what our clients are trying to do,” he says. Plus, being next to the BeltLine, Atlanta’s greenway that will eventually reach 22 miles, can help recruit employees, he says.

AthenaHealth relocated in September, from 30,000 square feet in a traditional shiny glass office complex in Alpharetta, an Atlanta suburb, to 45,000 square feet at Ponce.

“We’ve got this kind of gritty corporate culture and if you look at our other headquarters in Boston, it’s an old arsenal that was used to store weapons in the Civil War,” says

David Harvey,

a vice president of product strategy. “It’s an old industrial building.…We felt that way about [Ponce].” Athena, he says, has reserved a total of 145,000 square feet in the building and plans to build out another 35,000 square feet next year.

By appealing to technology, creative and research-driven companies, Jamestown is targeting the fastest-growing and cash-rich employers in the city. And once these types of companies sign on, upscale retailers, restaurants and services often follow.

Technology-oriented education company General Assembly was among Ponce’s first tenants and early next year, two more tech firms–consumer-data firm Cardlytics and email-marketing service MailChimp–will collectively occupy more 200,000 square feet.

“We’ve focused on technology and media, which have been important growth sectors versus a law firm or a sales company,” says

Michael Philips,

Jamestown’s president who led its development of Ponce and Chelsea Market. Food also is a “huge focus,” he says.Reprising a key ingredient at Chelsea Market, Jamestown is aiming to lure food-lovers with a massive food hall, comprised of nationally recognized chef-owned restaurants and boutique specialty food stores.

So far, Jamestown reports it is achieving office rents ranging from $25 to $30 a square foot and retail rents between $35 to $50 a foot—far above what typical office and retail spaces go for in most of the city, but in line with premium buildings in its most pricey northern pockets, like Buckhead, according to Marcus Millichap’s Mr. Molloy.

The average square foot of office space in Atlanta leased for $18.79, while the average square foot of retail went for $12.91, according to real-estate data firm CoStar Group’s latest report in November.

Maintaining such lofty rates in a city with a 14.1% office vacancy rate in September could pose a challenge. The city ranks near the bottom of 50 major markets in office-vacancy performance.

Jeff Myers,

a senior economist at CoStar Group, notes that Atlanta has many new buildings in the pipeline, many of which could offer attractive incentives that prompt tenants to jump ship. “There will be new construction down the line in the midtown area and that increases competition and places downward pressure on rents.”

Write to Max Taves at

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When a Mortgage Hinges on Home Values


When deciding who gets a home loan and who doesn’t, lenders heavily rely on one number: the loan-to-value ratio, or the LTV.

This stat weighs the loan amount relative to the value of the property being purchased. Most lenders require an LTV ratio of 80% or lower for jumbo mortgages—loans that exceed $417,000 in most areas and $625,500 in some high-price places. A borrower seeking a $1 million loan for a house listed for $1.2 million would have an LTV of 83%, exceeding the 80% lender threshold.

Complicating this formula in today’s marketplace, however, is the “value” part of the LTV. An uneven recovery in some areas is leading to some appraisal-related challenges for borrowers. High-end homes with unique or custom features can be difficult to appraise. Similarly, a luxury home located in a less affluent area may also get a skewed appraisal.

If an appraisal comes in low, a borrower will need to come up with a higher down payment to improve the LTV, or in some cases pay a higher interest rate, says

Mathew Carson,

a broker with San Francisco-based First Capital Group.

He cites the case of one of his clients who was trying to refinance his mortgage. One appraiser valued his home at $2 million in July. But when the client switched lenders, another appraiser valued the same home at just $1.4 million in October. That difference increased the LTV enough to raise the interest rate by a quarter point on a seven-year, adjustable-rate mortgage, so the borrower plans to file a rebuttal with the appraisal management company, Mr. Carson says.

Appraisal discrepancies are more likely to occur with refinances than with new home purchases, he explains. By law, the lender in a refinance can’t tell the appraiser the loan amount sought, whereas in a home purchase, the appraiser knows the purchase price and is likely to seek out comparable nearby homes in that range, Mr. Carson says.

Another complication: Some lenders require two appraisals for luxury homes. And when the appraisers’ valuations differ, the lender will use the lower amount. Luxury-home appraisals can also take longer, meaning not only more waiting and uncertainty for a seller but also that a borrower locked-in on an interest rate can lose it.

In competitive, high-end markets, appraisal-related delays could scuttle a deal.

Peter J. Goodman,

a broker with VA Loan Captain Realty, recently had a seller in Brooklyn, N.Y., accept an $825,000 all-cash offer over two separate mortgage-backed borrowers who bid $850,000 and $875,000. Because the property had been listed at $815,000, the seller was worried the appraisal would come in low and the mortgages would fall through, Mr. Goodman says.

To compete against cash offers, buyers may decide to waive the mortgage contingency or a seller won’t consider their offer, Mr. Goodman says. But they’re playing a real-estate version of Russian roulette. Waiving the mortgage contingency clause means that the buyer agrees to the home purchase even if there are problems with loan approval due to an appraisal or another reason, he says.

In competitive, high-end markets, appraisal-related delays could scuttle a deal.

Recently, the real-estate market has been improving at the high end, giving appraisers more comparable sales to consider when evaluating a home, says

Lawrence Yun,

chief economist for the National Association of Realtors (NAR). Sales of existing homes priced from $750,000 to $1 million-plus represented just over 2.1% of the real-estate market in October, compared with 1.7% of the market in October 2012, NAR data show.

“The stock market is at a 12-year high, and when the stock market booms, the upper end market for home sales begins to pick up,” Mr. Yun says.

Low appraisals are rare for

Bank of America

’s jumbo mortgages compared with two years ago, says

John Schleck,

senior vice president, centralized sales executive for Bank of America. “With rates this low and values pretty stable, it may be a good time for a borrower to step in before values go higher,” he adds.

If an appraisal does come in lower than expected, here are a few tactics a borrower can try:

Higher LTV jumbos. More lenders, including Bank of America and

Wells Fargo

are offering jumbo mortgages at 85% loan-to-value ratio.

Inform the appraiser. While federal regulations forbid lenders from interacting directly with an appraiser, a refinancing homeowner can drop the needed loan amount into conversation during an appraiser visit, Mr. Carson says. Real-estate agents also can provide information about a property to the appraiser.

Rebuttal. A last recourse is for the lender to file a rebuttal to the appraisal- management company, pointing out errors and suggesting alternate comparables. However, these rarely result in an amended appraisal, Mr. Carson says.

Corrections Amplifications

An earlier version of this article misidentified the name of Peter Goodman’s company as VA Home Captain Realty.

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A Modern Rebel in Old Charleston

Amid the preserved historic district of Charleston, S.C., the interior of Suzanne and Peter Pollak’s five-story townhouse, built in 1784, is something of a shock. The living room pièce de résistance: A 7-by-7 foot, coffee-table height, walnut table with a live palm tree growing out of its center.

‘I’m not from an old Southern family. I’m global, crazy and different. This home represents that,’ said Ms. Pollak, 57, a cookbook and entertaining author and educator. She oversaw the renovation and design of the home after buying it with her husband in 2005.

In the sitting room, a large modern chandelier dangles over an inexpensive table from Crate amp; Barrel.

Ms. Pollak hired James de Givenchy, a French-born, New York-based jewelry designer to create an interior strictly out of keeping with Charleston’s traditionalism. Mr. de Givenchy owns his own jewelry company, and has designed jewelry for Sotheby’s; the Pollaks’ is the only home he has decorated professionally.

As an investment, and to use ‘as a party house,’ Ms. Pollak said, they bought the 4,200-square-foot Charleston house in 2005 for $2.3 million, according to public records. They renovated its top and bottom floor for an amount they didn’t disclose.

In 2011, Ms. Pollack, pictured, who has worked as a spokesperson for a department store chain, co-wrote ‘The Pat Conroy Cookbook,’ and authored ‘Entertaining for Dummies,’ parlayed her expertise in speaking and entertaining into a new company called the Charleston Academy of Domestic Pursuits, with partner Lee Manigault.

While the style Ms. Pollak opted for appears to eschew historic tradition, it is in fact more true to her history than any home she has lived in, she said. Born in Beirut, she was raised in Africa as the family followed her father, a Central Intelligence Agency agent, from post to post. This is the dining room.

Suzanne Pollak in her home office.

The master bedroom is shown.

The master bathroom. Mr. de Givenchy chose this small, brick-colored subway tile to evoke the brick that is common in Charleston’s historic district.

Suzanne Pollak on her rooftop. ‘People don’t know how to use their homes. They are often either museums to good taste or storage space for their stuff,’ Ms. Pollak said.

This is the back garden.

The exterior of the home.

Along the cobblestone streets of the historic district of Charleston, S.C., on an early morning this fall, the gas lanterns that flank many front doors flicker. A cold breeze off the Cooper River ripples the American flags that dot the neighborhood and a light fog obscures the pink, green, yellow and blue facades of the city’s iconic Rainbow Row of 18th-century homes.

The exterior of Suzanne and Peter Pollak’s home.

Amid this preserved history, the interior of Suzanne and

Peter Pollak

’s five-story townhouse, built in 1784, is something of a shock. A glossy, computer-generated image of a freeway underpass greets visitors upon opening the front door. An African statuette stands sentry by the dining table. The house is full of quirky modern art and furnishings, from a giant square chandelier in an upstairs sitting room to a white goatskin rug in the master bedroom. The living room pièce de résistance: A 7-by-7 foot, coffee-table height, walnut table with a live palm tree growing out of its center.

“I’m not from an old Southern family. I’m global, crazy and different. This home represents that,” said Ms. Pollak, 57, a cookbook and entertaining author and educator. She oversaw the renovation and design of the home after buying it with her husband in 2005. “This house is her thing,” said Mr. Pollak, 62. Though he spent his career in real-estate development and marketing, he left the design of this house completely in his wife’s hands.

She hired

James de Givenchy,

a French-born, New York-based jewelry designer to create an interior strictly out of keeping with Charleston’s traditionalism. Mr. de Givenchy owns his own jewelry company, and has designed jewelry for Sotheby’s; the Pollaks’ is the only home he has decorated professionally.

In stairwells, in lieu of hanging fancy chandeliers, he installed simple, stainless steel light fixtures, which puts the focus on the windows and garden views, Ms. Pollak said. To deal with the lack of closet space, he found a tall, glass box with shelves for shirts and ties, and he covered Barcelona-style chairs with pony skin.

While the style Ms. Pollak opted for appears to eschew historic tradition, it is in fact more true to her history than any home she has lived in, she said. Born in Beirut, she was raised in Africa as the family followed her father, a Central Intelligence Agency agent, from post to post. In Somalia, a friend’s mother was traded in marriage for 200 camels. In Nigeria, her father came home one day, announced a war, and instructed the family to pack up and leave within the hour. After a coup in Liberia, “all the people we knew were shot to death two weeks after we left,” Ms. Pollak said.

In the sitting room, a large modern chandelier dangles over an inexpensive table from Crate  Barrel.

“I think that’s why I’m so attached to houses and filling them with people. When you’re a nomad, you want to create roots,” she said. Ms. Pollak credits this nesting impulse for her marriage at age 20 to Mr. Pollak, a native Virginian, and the four children she had by age 27. The couple raised the family first in Hilton Head, and then in Beaufort, where they lived in a 1780s mansion which Ms. Pollak filled with American Queen Anne and Chippendale furniture. The traditional style reflected her urge to “look like we had lived there for 200 years.”

As an investment, and to use “as a party house,” Ms. Pollak said, they bought the 4,200-square-foot Charleston house for $2.3 million, according to public records. They renovated its top and bottom floor for an amount they didn’t disclose.

Mr. Pollak’s business suffered a severe downturn during the recession, he said, which necessitated selling the Beaufort home in 2010, a share of a home in Turks Caicos and auctioning off the antiques. That same year, two of the couples’ sons, both now captains in the U.S. Marines, were serving in Afghanistan. “My hair turned white” with worry and she couldn’t bring herself to leave the safety of the Charleston home, said Ms. Pollak, who is tall and thin and whose low-register voice connotes gravitas.

On the first floor a portrait of Charles Pollak, the owners’ 34-year-old son who served as a Marine in Afghanistan, is mixed in with other modern furnishings.

When both sons returned home safely and the dust settled on the sales, Ms. Pollak said she realized the Charleston home better reflects who she is and that she is happy living in it full time. She decided that she would devote herself to making a new life in the city.

In 2011, Ms. Pollak, who has worked as a spokeswoman for a department-store chain and co-wrote a cookbook as well as “Entertaining for Dummies,” parlayed her expertise in speaking and entertaining into a new company called the Charleston Academy of Domestic Pursuits. She and a partner give lectures and classes and have written a book with their theories on entertaining. The tone of the Academy is humorously arch, but the message is serious, Ms. Pollak said.

“People don’t know how to use their homes. They are often either museums to good taste or storage space for their stuff,” Ms. Pollak said. She gives frequent dinners, seating her ideal number of guests—seven—at her dining table. The palm-tree room is used for an annual lunch to which she invites women who inspire her. She also stages “salons,” where she gathers people to discuss an issue or topic.

After her nomadic youth, Ms. Pollak never lost a taste for adventure. But now some of it can happen right in her living room.

“I can meet the world through my house,” she said.

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MBS MID-DAY: Volatility Within a Range Ahead of FOMC

Treasuries once again broke away from the pack in the overnight session and moved higher in yield.  Cues from related markets didn’t suggest that weakness, but we saw a similar move early Monday morning.  In both cases, yields had stretched down to recent lows in the previous day and overnight trading acted as a technical correction.

Looking at this another way, we could also conclude that the overnight session didn’t offer the same level of ‘fuel’ for an ongoing flight to safety.  As we’ve discussed on several occasions recently, the bond rally  requires a constant, fresh supply of disturbing global market developments in order to continue breaking new ground.  Instead, last night was pretty uneventful in the context of recent volatility.

Heading into the domestic session, we had weaker inflation data that ostensibly helped bond markets bounce back.  I wouldn’t read too much into that though, considering that the core CPI reading was right in line with forecasts.  Realistically, bond markets aren’t doing much at all this morning.  Zoom out to a slightly wider view and you’ll see a simple consolidation in prices and yields heading into today’s FOMC events.  MBS are trading perfectly inside yesterday’s range and are down less than an eighth of a point in both Fannie 3.5s and 3.0s. 

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