RE/MAX Holdings, the parent company of the RE/MAX and Motto Mortgage franchise brands, announced Tuesday the acquisition of wemlo, a 20-month-old, Florida-based fintech startup that provides third-party mortgage loan processing services.
The acquisition is an investment in the company’s rapidly growing Motto Mortgage franchise business, which had its second-best quarter in company history during Q2 of 2020, growing t0 127 offices.
“The number one problem in the mortgage brokerage channel today is finding good quality processors,” Ward Morrison, the president of Motto Mortgage told Inman. Wemlo is Motto Mortgage’s solution to that problem.
Wemlo’s key technology is a “service cloud” for mortgage brokers, which combines third-party loan processing with an all-in-one digital platform, in an attempt to eliminate the pain points of loan processing and technology fragmentation in the industry. The goal of the acquisition is to increase the speed and efficiency at which Motto Mortgage franchise offices can process loans, making the brand more attractive for prospective franchise owners.
Mortgage brokers often don’t have the capital to hire a loan processor because they’re not processing loans on a scale that a mortgage banker is.
“Our owners were coming to us and saying, ‘who do you recommend for processing?’ and we did have recommendations but they were disparate,” Morrison said. “They just didn’t have this enterprise, fully-automated platform that wemlo is going to be able to provide, both as a software as a service to people, as well as processing the transaction.”
Wemlo’s co-founders David Rogove and Steven Gelley will continue to lead the team, which will keep its operations based in the Fort Lauderdale area. For wemlo, the acquisition gives the company access to a massive network of agents and brokers on the residential side, as well an ever-growing network of mortgage brokers. The acquisition also gives the company access to fresh capital to continue to develop its technology platform.
“We’re extremely excited to have the backing of such a renowned brand as RE/MAX,” Gelley told Inman. “What they’re doing is absolutely massive to the entire brokerage space. It’s just extremely disruptive and exciting to scale alongside them.”
Rogove and Gelley, childhood friends, incorporated the company in December 2018 and had their first sale in June 2019.
“We know that processing is really the biggest pain point,” Rogove told Inman. “Getting good processors and wrapping it around a software platform that directly connects loan officers to a contract processor has never been done before.”
He added, “Software that’s out there on today’s market is really kind of plug-and-play pieces of other people’s technologies put together in a certain stack.”
The acquisition is RE/MAX’s first major technology acquisition to support its growing Motto Mortgage business. The company hasn’t been shy about bolstering technology offerings for its real estate brokerage franchisees, acquiring booj to build its consumer and agent-facing technology platforms and more recently acquiring First, an artificial intelligence-powered real estate tech startup.
“RE/MAX has really decided we want to be across the homebuying transaction,” Morrison said. “By originally starting Motto as a franchise brand — the second brand after having one brand for 45 plus years — it was exciting to see us invest in that.”
“Taking Motto and the mortgage segment even further by investing in wemlo and parting with them is showing that we are committed to the mortgage space, we are committed to the homebuying transaction and we want to be the players in the future that can connect it, soup to nuts, whether it’s mortgage, title, insurance or real estate altogether, and open up those lines of communication,” Morrison added. “If we can do that through this platform in the future, that will be key.”
The company will continue to serve other mortgage brokers outside of Motto Mortgage offices.
The acquisition also comes as the mortgage space has seen massive demand in both the refinance and new mortgage purchase space.
The terms of the acquisition were not immediately disclosed but will likely be reported when the acquisition closes, as RE/MAX is a public company.