Last Piece of the Puzzle: Zillow Buys into the Mortgage Business
By Maggie Wilson @ Real Estate Daily
August 7, 2018

Since arriving on the real estate scene more than a decade ago as an online real estate database company, Zillow held true to that business model focusing mainly on scaling up their home database, marketing efforts, and partnerships in the industry.

In the past couple of years, however, Zillow has been moving towards having a more direct effect on real estate transactions in the housing market. Speculation started building when Zillow began seriously expanding their “Instant Offers” program, which allows sellers on the site to receive offers directly from investors.

Shortly after, Zillow launched Zillow Offers, a program in which Zillow buys, flips, and sells homes directly from consumers. The program was initially limited to two markets but has since expanded to multiple other states.

Now, Zillow is buying into another aspect of real estate transactions. The company announced its acquisition of the Mortgage Lenders of America, a national mortgage lender based in Kansas. With this latest acquisition, Zillow hopes to streamline the home buying process further for consumers using Zillow Offers.

Key Takeaways

  • Zillow has been growing towards having a more direct effect on real estate transactions with “Instant Offers” and “Zillow Offers”
  • Zillow is now expanding into the mortgage business with its acquisition of Mortgage Lenders of America
  • This latest expansion will streamline the buying process for consumers that sell directly to Zillow through Zillow Offers

Excerpt

The dramatic reshaping of Zillow’s place in the real estate ecosystem is about to take a giant step forward, as the online real estate behemoth announced Monday that it is getting into the mortgage business.

To power the expansion into mortgages, Zillow is buying Mortgage Lenders of America, a national mortgage lender located in in Overland Park, Kansas.

According to Zillow, the acquisition of Mortgage Lenders of America will allow the company to “streamline and shorten the home-buying process for consumers who purchase homes through Zillow Offers.”

Zillow said that Mortgage Lenders of America will continue with its current line of business, offering mortgages directly to consumers, in addition to powering Zillow’s direct originations business within the Zillow Offers program.

Zillow also announced Monday that it will no longer allow other companies to participate in the Offers program. “Going forward, we will be the only buyer participating in the Zillow Offers program,” the company said Monday in a letter to investors.

According to Zillow, the company believes that owning a mortgage lender will allow the company to develop new tools and partnership opportunities, including for real estate brokers with existing in-house mortgage operations or mortgage affiliates.

“Getting a mortgage can be the toughest, most painstaking and time-consuming part of the home-buying process,” said Greg Schwartz, president of media and marketplaces at Zillow Group.

“Now that we are buying and selling homes through Zillow Offers, we believe that having our own mortgage origination service as an option for consumers will allow us to streamline the process for people who buy a Zillow-owned home,” Schwartz continued.

“Over time, we expect the work we do in conjunction with this new line of business will help us expand our offerings to our partners – including real estate brokers with existing in-house mortgage operations and third-party lenders who co-market with Premier Agents,” Schwartz added.

Mortgage Lenders of America will continue to operate from its headquarters in Kansas.

Financial terms of the deal were not disclosed.

View the original article at Housing Wire,  CNBC, Bloomberg