Zillow, the publicly traded real estate portal and lead generation service, has acquired Mortgage Lenders of America. This is Zillow’s first move into originating mortgages. Until now, the company’s focus in this space was on providing home buyers with quotes from a variety of third-party lenders.
The financial details of the transaction were not disclosed.
Mortgage Lenders of America (MLoA) is a privately held online lender based in Kansas. It will continue to operate as usual and will continue to appear in Zillow’s existing mortgage marketplace, which isn’t going away either. “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 company says in today’s announcement.
Other lenders in Zillow’s marketplace may not feel the same way. MLoA originated 4,400 mortgage loans from its ads on Zillow in 2017. The company argues that this leaves “plenty of opportunity for independent lenders to continue to advertise and build their businesses on the Zillow Group platform.”
In many ways, this move makes perfect sense, given the trajectory Zillow has been on in recent years. The company recently started buying and selling homes through its Zillow Offers program in a few select cities, so this closes the loop for buyers who are using this program.
“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, in a canned statement. “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.”
MLoA was founded in 2000 and currently has about 300 employees. It will remain in its Kansas headquarters and its CEO Philip Kneibert will continue to lead the company as general manager after the deal closes, which will likely happen in the fourth quarter of 2018.