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Zillow to delay full rollout of mortgage services


Zillow’s plan to fully enter into mortgage lending will take longer than initially announced.

ZillowCEO Rich Barton told investors during a phone call this week that the hiring of mortgage officers has slowed as it continues to eliminate the flaws in its software, Geekwire reported.

“As we transition from (Mortgage Lenders of America) to Zillow Home Loans, we are building new proprietary technology to streamline and integrate home loans as our payments platform for Zillow Offers,” said Barton. “We’re already testing the initial version of our digital mortgage software, but the rollout is taking a bit longer than expected.”

Quietly, Zillow has actually had mortgage origination within its stable for quite a while, having acquired Mortgage Lenders of America in November 2018. Rebranded into Zillow Home Loans, that lender has been active subsidiary of the company, with $27 million of second quarter revenue that was up 40 percent from the prior year. Geekwire reported that the mortgage division’s $5.3 million loss was also “better than the company expected.”

The slowing of the rollout, however, will have repercussions on the division’s projections for the rest of 2019. Last quarter, Zillow expected it to bring in between $100 million and $115 million; that figure has been revised to between $90 million and $100 million.

Barton did reiterate, however, that “the long-term expectations for our Zillow Home Loans business and other transaction-related adjacencies remain unchanged.” The company eventually wants to originate a third of all loans attached to Zillow Offers, its online platform for directly buying and selling homes. That projects to 3,000 loans per month.

But before it jumps full bore into the mortgage ring, Barton wants to make sure that Zillow and its software suite are fully prepared to tackle all of the industry’s complexities.

“It would be hard to find a more complicated snarl of a consumer experience than selling and buying a home, and all of the messy swirls around that transaction,” he said.

 



 

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