Zillow has owned a mortgage company for approximately six months, having purchased Mortgage Lenders of America in November 2018, but now, the online real estate giant has truly become a mortgage lender as well.
Zillow announced Tuesday that it is launching its own mortgage lending operation, which it is calling Zillow Home Loans.
For years, prospective homebuyers could search for a mortgage through Zillow’s site, as lenders paid to have their interest rates and terms listed on Zillow’s mortgage marketplace. Now, they’ll have a new competitor: Zillow itself.
The company is rebranding Mortgage Lenders of America to carry the Zillow name, and will use the lender to finance home buying and selling through its Zillow Offers platform.
It’s a truly massive move for Zillow, which describes the change rather simply: “Home shoppers who visit Zillow to shop for a mortgage can now get financing directly from Zillow Home Loans.”
The move is the latest in a nearly two-year effort to reshape how Zillow conducts its business.
Back in 2015, former Zillow CEO Spencer Rascoff said that the company views itself as a media company, not a real estate company.
“We sell ads, not houses,” Rascoff said at the time. “We’re all about providing consumers with access to information and then connecting them with local professionals. And we do a great job of giving those local professional high-quality lead, they’ll covert those leads to at a high rate and then want more media impressions from us. So we’re not actually in the transaction, we’re in the media business.”
But in the last few years, things changed dramatically at Zillow.
In 2017, Zillow shook up the real estate industry when it announced that it was getting into the home selling business by launching “Zillow Instant Offers.”
In the program, homeowners looking to sell their home in certain markets were able to get cash offers for their home from selected investors interested in buying it, all within Zillow’s platform.
But that was just the beginning. Later, Zillow began buying and selling homes directly to and from homeowners, becoming an iBuyer. Through its “Offers” program, Zillow buys a home directly from a seller, makes the “necessary repairs and updates” and lists the home “as quickly as possible.”
Zillow expanded the “Offers” program to new markets, but it didn’t stop there.
Last year, the online real estate landscape shifted dramatically when Zillow announced that it was getting into the mortgage business by buying Mortgage Lenders of America.
According to Zillow, the acquisition of Mortgage Lenders of America would allow the company to “streamline and shorten the home-buying process for consumers who purchase homes through Zillow Offers.”
The company paid $65 million to acquire Mortgage Lenders of America, and closed on the deal late last year. At the time, Zillow said that it planned to rebrand MLOA, and that’s just what it has now done, rebranding its mortgage business to carry the Zillow name.
“Getting a mortgage is often the hardest, most complicated part of buying a home. Since our inception, Zillow has been empowering people with information and resources to make smarter real estate decisions, including helping borrowers shop for the best lender and loan for their new home,” said Erin Lantz, vice president and general manager of mortgages at Zillow.
“With Zillow Home Loans we are taking an incredible step forward to deliver an integrated payments platform to complete the financing for Zillow Offers that delivers a more seamless, on-demand real estate experience today’s consumers expect,” Lantz added. “We continue to offer consumers the power of choice to shop for loans directly through Zillow Home Loans or through our popular mortgage marketplace.”
According to the company, homeowners using Zillow Offers to sell their home can “easily secure their financing through Zillow Home Loans, giving them the certainty to be able to sell their existing home and shop for a new home simultaneously.”
Additionally, homebuyers who want to purchase a home that Zillow owns may use Zillow Home Loans to “seamlessly finance their home purchase, giving them a convenient way to get into their new home on their timetable, with less hassle and stress,” the company said.
But the company added that the use of Zillow Home Loans is “not restricted” to Zillow Offers home sales. According to Zillow, borrowers may still use Zillow’s mortgage marketplace to shop for a lender and loan for any home purchase or refinanced loan.
Zillow Offers is now available in nine markets, according to Zillow. Zillow Home Loans is headquartered in Overland Park, Kansas, and has more than 300 employees.
Source: By Ben Lane, Housingwire