Zillow To Buy Mortgage Lender Service To Ease Home-Buying Process For Consumers

Zillow Group Inc. on Monday announced the acquisition of a national mortgage lender to assist with home purchases as it continues to expand services past its real-estate listing business.

The online real estate database company said it plans to acquire Mortgage Lenders of America for an undisclosed amount, according to a press release. The acquisition will help shorten the home-buying process for customers who make transactions with Zillow Offers and allow for partnering with real estate brokers, the company said.

"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," said Greg Schwartz, president of media and marketplaces at Zillow Group.

The Overland Park, Kansas-based Mortgage Lenders of America will, however, continue to offer mortgages to potential home-buyer while contributing to Zillow's mortgage marketplace. It is an existing advertising client and had originated 4,400 mortgage loans in 2017. Zillow said owning a mortgage lender will allow it to strengthen its business and create new partnerships and tools for real estate brokers with existing in-house mortgage operations.

Founded in 2000, Mortgage Lenders of America has approximately 300 employees. After the acquisition, its CEO Philip Kneibert will continue to lead as general manager, the company said. Mortgage Lenders of America will also continue to work out of its headquarters in Kansas.

In Tuesday trading, shares of Zillow (Z) dropped more than 16 percent to $48.55.

The company reported $325 million in earnings for the most recent quarter, falling short of consensus estimates of $326 million, according to Thomson Reuters.

Zillow on July 31 announced its new strategy of buying and selling homes directly to users. The company now allows renters to apply for more than one rental unit via Zillow’s website. It also lets tenants pay their rent online with checks and debit cards.