Orig­i­na­tion

The price for the Over­land Park, Kan.-based lender was not dis­closed. The deal is ex­pected to close in the fourth quar­ter.

National Mortgage News - - Contents - By Brad Finkel­stein

Zil­low en­ters the mort­gage busi­ness by pur­chas­ing a lender

Zil­low Group is mov­ing from be­ing a mort­gage mar­keter to orig­i­nat­ing loans with its ac­qui­si­tion of Mort­gage Lenders of Amer­ica, in an ef­fort to sup­port its home flip­ping busi­ness.

The price for the Over­land Park, Kan.-based lender was not dis­closed. The deal is ex­pected to close in the fourth quar­ter.

Zil­low is in the lead gen­er­a­tion busi­ness through Zil­low Mort­gage Mar­ket­place. In June, the Con­sumer Fi­nan­cial Pro­tec­tion Bureau dropped an in­quiry over pos­si­ble vi­o­la­tions of the anti-kick­back pro­vi­sion of the Real Es­tate Set­tle­ment Pro­ce­dures Act in its co-mar­ket­ing pro­gram.

Its cur­rent ad­ver­tis­ing prod­ucts for lenders — Con­nect, Cus­tom Quotes and lender co- mar­ket­ing — re­main an im­por­tant part of the busi­ness, and the com­pany in­tends to sup­port and grow that mar­ket­place for years to come, Zil­low said in a press re­lease.

Mort­gage Lenders of Amer­ica is an ex­ist­ing mar­ket­place client. It also so­lic­its leads on Lend­ingTree, ac­cord­ing to the com­pany’s web­site.

Last year it orig­i­nated 4,400 loans and that leaves a lot of other busi­ness for lenders that want to ad­ver­tise on its plat­form, Zil­low said. Dol­lar vol­ume fig­ures for the lender were not dis­closed.

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

“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. 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.”

Lend­ingTree tried to get into the mort­gage busi­ness with the ac­qui­si­tion of Home Loan Cen­ter, but ex­ited dur­ing the real es­tate bust in 2012 when it sold the com­pany to Dis­cover.

Dis­cover found a sim­i­lar lack of suc­cess and ex­ited the busi­ness in 2015.

Mort­gage Lenders of Amer­ica has 300 em­ploy­ees. Its pres­i­dent, Philip Kneib­ert will re­main with the com­pany as gen­eral man­ager, and will re­port to Schwartz.

“We’re fo­cus­ing this ac­qui­si­tion on Zil­low Of­fers and our pri­mary goal with MLOA is to stream­line the mort­gage process so that we can sell Zil­low-owned homes more quickly,” said Erin Lantz, the com­pany’s vice pres­i­dent of mort­gage. “So it’s that speed that’s re­ally im­por­tant in Zil­low Of­fers and that’s where we see hav­ing an in­te­grated process with a mort­gage lender in­te­grated into our Zil­low Of­fers plat­form.”

Zil­low’s been an ac­tive ac­quirer of com­pa­nies in real es­tate, in­clud­ing Tru­lia and doc­u­ment ser­vices com­pany DotLoop in 2015. This year, it got into the home flip­ping busi­ness. Other brands in­clude StreetEasy and RealEstate.com.

“At this ex­cit­ing time in the real es­tate in­dus­try, Zil­low Group is com­mit­ted to devel­op­ing in­no­va­tive tech­nol­ogy and ser­vices, like Zil­low Of­fers and, with to­day’s an­nounce­ment, po­ten­tial for mort­gage orig­i­na­tions, that help our part­ners meet evolv­ing con­sumer ex­pec­ta­tions, while gen­er­at­ing more rev­enue op­por­tu­ni­ties,” CEO Spencer Ras­coff said in the com­pany’s sec­ond-quar­ter earn­ings press re­lease.

Rev­enue in Zil­low’s mort­gage seg­ment slipped 8% dur­ing the quar­ter to $19.3 mil­lion from $20.9 mil­lion one year ago. The com­pany re­ported a net loss of $ 3.1 mil­lion for the quar­ter, an im­prove­ment from the $21.8 mil­lion loss for the sec­ond quar­ter of 2017.

Source: Zil­low

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