Zillow buys a mortgage lender, but investors aren't impressed

Investors were giving a hearty thumbs-down Monday to Zillow Group, which runs the popular Zillow real-estate pricing website, after it announced a loss and that it is acquiring a big mortgage lender.


Zillow group stock fell more than 16% to $58.15 in afterhours trading after the company said it plans to acquire Mortgage Lenders of America, based in Overland Park, Kan. It didn't help that the company reported a $3.1 million loss in the second quarter, down from a loss of $21.8 million last year.

But the company pointed to a 22 percent increase in revenue for the quarter compared to a year ago to show that it's the on the right road

As for the acquisition, Zillow said it will help homebuyers line up financing and allow it to partner with real estate brokers and others.

"Getting a mortgage can be the toughest, most painstaking and time-consuming part of the home-buying process," said Greg Schwartz, president of media and marketplaces at Zillow Group. "Now that we are buying and selling homes through Zillow Offers, we believe that having our own mortgage origination service as an option for consumers will allow us to streamline the process for people who buy a Zillow-owned home."