Zillow announced an agreement on Monday to acquire the Kansas-based online direct mortgage lending company Mortgage Lenders of America in a move aimed at streamlining the homebuying process for consumers looking to purchase directly from the Seattle-based technology giant through its Zillow Offers program.
Errol Samuelson, the chief industry development officer at Zillow
“The goal here is to create an experience when a buyer comes to buy a home through Zillow Offers, where that transaction happens more quickly and more seamlessly,” Errol Samuelson, the chief industry development officer at Zillow, told Inman.
“Certainly from the buyers’ point of view, a transaction that happens with fewer surprises and more quickly is very desirable,” added Samuelson, who estimated the deal would close in the fourth quarter of 2018. “But it’s also important to us in terms of our business — if you think about a business where you’re buying a home and turning it around and selling it — it’s really critical that you can keep that whole time down to a min.”
As Zillow develops technology around the integration of Mortgage Lenders of America, there’s an opportunity to partner with other brokerage partners that have their own mortgage affiliates, Samuelson said.
“We think that the tools we’re developing for Zillow offers, some of those tools we can license to brokerages so they can help improve their own capture rate with their own mortgage businesses,” Samuelson said.
Empower your agents with automation
The tool that’s a broker’s secret weapon for results and retention READ MORE
In April, Zillow launched Zillow Offers — formerly knows as Instant Offers — a direct-to-consumer company initiative to buy and sell homes in competition with others like Knock, Offerpad and Opendoor. The program is live in Phoenix and Las Vegas and coming to Atlanta and Denver later this year.
Terms of the deal, including the acquisition price, were not immediately disclosed.
Mortgage Lenders of America — which operates with roughly 300 employees out of its Overland Park, Kansas, headquarters — will continue its current line of business, offering mortgages to consumers and participating in Zillow’s mortgage marketplace, according to a release.
“At Mortgage Lenders of America, we are focused on helping home buyers make informed, confident decisions about their mortgage selection,” said Philip Kneibert, president of Mortgage Lenders of America, in a release.
“We are excited to be joining Zillow Group and look forward to working together to develop an innovative new mortgage experience to better serve buyers.”
After the acquisition closes, Kneibert will continue to stay on as general manager of Mortgage Lenders of America, reporting to Greg Schwartz, president of media and marketplaces at Zillow Group.
Mortgage Lenders of America is a client through Zillow’s current advertising product for lenders, which will continue to operate even with the acquisition.
In 2017, Mortgage Lenders of America reported it originated 4,400 mortgage loans through the platform. Zillow said it intends to continue to support and grow the advertising platform for lenders, which saw users submit 23 million loan information requests through its many consumer brands.
In July, Zillow announced a new $650 million public offering, half in stock and half in senior notes. The company hinted it could use some of the capital generated to fund future acquisition and growth, in an investor press release.
In September, it announced the acquisition of New Home Feed, a listing management technology for homebuilders to syndicate their listings across the web.
Prior to that, it announced the acquisition of Naked Apartments, a New York City apartment listing database in 2016. Zillow acquired transaction platform dotloop in the summer of 2015, and the year before that, it made a major move to acquire competitor Trulia in a $2.5 billion all-stock deal.
The company has also made major moves outside of the acquisition space this year. It launched its direct-to-consumer homebuying and selling program Zillow Offers, expanded to Canada and updated its Premier Agent advertising program.
Just last week, Zillow announced a new rental tool that would allow prospective and current renters to apply for apartments and pay their rent through the site, in addition to searching for new rentals. It also announced the impending expansion of Zillow Offers to Denver, its fourth market after Phoenix, Las Vegas and Atlanta.
In Zillow’s first quarter earnings report, the company posted an $18.6 million net loss, which was higher than expected, but it beat its own revenue expectations by posting $299.9 million in revenue, a 22 percent year-over-year increase.
Most of the company’s revenue came from Premier Agent advertisers, which accounted for $175.3 million or nearly 60 percent of revenue.
The company is expected to release its second quarter earnings after the market closes on Monday.
Source: click here
Loading ...