Zillow executives acknowledged previously that the rollout of proprietary mortgage software was taking longer than expected.
Zillow has hired Rian Furey, a 20-year veteran in the mortgage space, to serve as President of Zillow Homes Loans, it was announced Monday. The hire comes at a time when Zillow is developing and testing proprietary lending software to make Zillow Home Loans the mortgage platform for its home buying and selling platform Zillow Offers.
Furey most recently served as the chief operating officer at Impac Mortgage and has held executive positions at loanDepot, LendingTree loans, Discover Home Loans and Greenlight Loans. He’ll report to Greg Schwartz, Zillow Group’s president of media and marketplaces.
Zillow also announced several other key hires for Zillow Loans, including Libby Cooper, who will serve as vice president of strategy and operations; Darren Apfel, who will serve as senior director of product development; Jeff Kibbey, who will serve as vice president of compliance; and Paul Thomas, who will serve as vice president of finance.
“We’re delighted to welcome [Furey] and his extensive operational experience to Zillow Group,” Schwartz said in a statement. “As we expand our business to facilitate seamless transaction experiences for our customers, the deep operating and industry experience [Furey], [Cooper] and their team of experienced operators will help us accelerate our work to build a truly seamless, integrated mortgage lending process for our customers.”
Zillow began its excursion into the mortgage space approximately a year ago with the acquisition of Mortgage Lenders of America. In the second quarter of 2019, the company reported $27 million in revenue from the segment, but CEO Rich Barton said on a call with investors that the revenue came mostly from the pipeline of Mortgage Lenders of America’s legacy platform. The company is now shifting its focus.
“We are transitioning the company we acquired in October 2018 – a small, independent, low-volume lender specializing in government-backed loans – into a scaled, tech-enabled, rate-competitive, consumer-direct lender,” Barton said, in a letter to shareholders. “We are making solid progress on the integration and the development of a proprietary mortgages technology platform which will enable customers to choose from a fully digital self-service application or to copilot the process with a Zillow Home Loans loan officer.”
That transition, however, is taking longer than expected, according to Barton. Still, the host of new hires suggests Zillow is serious about moving deeper into the mortgage space.
“We’re already testing the initial version of our digital mortgage software but the full rollout is taking a bit longer than expected,” Barton said. “As we continue to build out and test our own platform, we’ve slowed loan officer hiring until we feel we have the technology and operational infrastructure foundation that we need to scale.”
Mortgage – along with eventually title and escrow – will be a key component of the company’s effort to not only scale Zillow Offers, but turn it into an eventual money maker for the company. Right now, Zillow Offers is still losing money on each home it sells, on average, after interest is paid. The path to profitability is through those ancillary services.
“Over time, our unit economics should benefit even more from other adjacent services, like mortgage origination, title and escrow,” Barton said, in the investor letter. “We expect to be able to leverage these services to support Zillow Offers and improve the consumer’s overall transaction experience while also generating cost savings for Zillow and our customers.”