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 homesdirectly 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.”
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.
Courtesy: Ben Lane, HousingWire Newsletter
