After the acquisition of Mortgage Lenders of America last year, Zillow Group has begun delving into the mortgage aspect of home buying and selling through its platform, gathering resources for the creation of its own mortgage software platform.
However, that plan is taking longer than expected. CEO Rich Barton said on a call with investors that Zillow has slowed hiring of mortgage officers as it continues to test the software and work out the kinks.
“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,” Barton said. “We’re already testing the initial version of our digital mortgage software, but the rollout is taking a bit longer than expected.”
The mortgage division brought in $27 million in revenue in the second quarter, up 40 percent from the prior year. It took a $5.3 million loss, a figure that was better than the company expected.
As a result of the hiring slowdown and the delayed software rollout, Zillow lowered its expectations for the mortgage division for the rest of the year. Last quarter, the company expected the division to bring in $100 million to $115 million in 2019, and now Zillow projects mortgage revenue of $90 million to $100 million for the year.
On its own, a dip in mortgages isn’t a huge problem for Zillow as the company’s overall revenue jumped 84 percent in the quarter. However, the situation shows the challenges that come with disrupting real estate, which Barton acknowledged.
Read more here
Join us November 12-15 for the Property Portal Watch Conference Madrid 2019.