Online real estate company Zillow has entered the mortgage space. On Monday the Seattle-based company purchased Mortgage Lenders of America for an undisclosed amount. The move solidifies the company’s effort to simplify and streamline the home buying process, according to a company-issued statement.
Zillow outlined that, “owning a mortgage lender will allow Zillow Group to develop new tools and partnership opportunities, including for real estate brokers with existing in-house mortgage operations or mortgage affiliates.”
The Zillow Offers platform, a home-selling option where homeowners can receive cash offers, allows users to take advantage of a “shortened home-buying process.”
A Zillow spokesperson told Bank Innovation that acquiring is a digital lender will help the company scale.
“This is a really large marketplace,” the spokesperson said. “Mortgage Lenders of America, LLC did roughly 4,400 loans last year. By comparison, consumers requested about 23 million loans through the marketplace last year.”
“While we believe we can bring a differentiated experience in mortgage origination, our initial focus will be on enabling consumers that are using Zillow Offers,” said Zillow. “We plan to offer Mortgage Lenders of America, LLC originated mortgages, as an option for consumers using Zillow Offers to create a more seamless buying experience.”
Zillow also noted that Offers buyers will not be required to use Mortgage Lenders of America and that there will be announcements in the coming months around tools to develop “marketing agreements that will drive business to brokerages.”
Meanwhile online mortgage platform competitors like Silicon Valley-based Blend, are branching out from mortgages. On Monday Blend announced that it would be offering insurances services, to perhaps extend the consumer relationship even after the mortgage has been paid off. MetLife insurance company is an initial partner.
Bank Innovation spoke with Wealthfront, a roboadvising platform that currently uses a Zillow API for geolocating homes within a user price range, and to calculate monthly expenses based on aggregated data. Wealthfront’s spokesperson said there is no plan to integrate Zillow’s mortgage services as of yet.
Zillow stock plunged nearly 20% following the acquisition announcement. Zillow’s 2Q18 earnings reveal $282 million on revenues.
The deal is expected to close in the fourth quarter of 2018.1 - Reader Likes This Post