Zillow’s Mortgage Push Has Some Critics Crying Foul

Zillow leans heavily on an invite-only circle of real estate agents to send home buyers to its lending business. Critics of that arrangement say the real estate listing giant risks running afoul of mortgage lending and consumer marketing laws.

Art by Clark Miller.

Zillow, the online real estate listings powerhouse, has tried for years to diversify its business away from advertising. It tried flipping homes but abandoned that effort after losing lots of money. Now, its biggest chance at branching out is using its strength in home listings and tight relationships with real estate agents to grow its mortgage business.

The company may be walking a fine line. Under U.S. mortgage laws, it’s a big no-no for lenders to give kickbacks or anything else of value to real estate agents and others as a reward for sending home buyers their way. Some critics and rivals of Zillow think regulators ought to look more closely at whether it’s playing by those rules.