Real REMAX ends investment in Motto Mortgage franchises

The newly formed Real REMAX Group will no longer be investing in the growth of its Motto Mortgage franchise system, with its sights set on a more unified mortgage platform, the company confirmed with National Mortgage News.

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The move threatens independent mortgage banks and outside loan originators who rely on real estate agents for referrals, as the company aims to keep borrowers within its platform from the initial home search through funding and closing. The news comes after HomeServices of America announced earlier this week the expansion of its end-to-end real estate ecosystem to include mortgage servicing.

The Real REMAX platform will likely be similar to what competitors like Zillow, with its mortgage business Zillow Home Loans, and Rocket Cos., following the acquisitions of Mr. Cooper’s servicing and real estate brokerage Redfin, have created over the past few years.

Vic Lombardo has also stepped down as president of mortgage services, and Kate Gurevich, CEO of One Real Mortgage, is now leading the mortgage business, a company spokesperson said.

When The Real Brokerage and REMAX initially announced the merger in late April, the press release said “REMAX and Motto Mortgage, the first and only national mortgage brokerage franchise brand in the U.S., will continue to operate under their current brands.”

The company echoed that sentiment in an email sent to Motto broker owners and loan originators the same day, which said support from headquarters remained unchanged and the brand will be maintained and continue to operate as a dedicated franchise model even after the transaction closes, according to a United States Securities and Exchange Commission filing.

The April email also said, “By bringing more ancillary services together, it’s designed to give agents and their clients more control over each transaction with fewer handoffs, and a better experience end-to-end.”

But the company’s tone has changed. It will no longer offer the sale of new franchises and existing branches will have flexibility in determining the future of their business, including ending their franchise agreements. For owners who chose not to terminate it, Real REMAX will honor the obligations under existing contracts, a company spokesperson said.

Motto operates independently owned mortgage brokerages in more than 40 states, while Real runs One Real Mortgage, a brokerage built on the back of its acquisition of LemonBrew Lending in 2022. The company has not clarified how mortgage opportunities will be distributed.

The acquisition officially closed Monday, creating a platform with more than 180,000 agents worldwide, including over 100,000 in the United States and Canada. Shares of the combined company began trading on the Nasdaq Global Select Market Tuesday under the ticker symbol “REAX.” The stock began trading at $24.11, and has since declined to $20.77 as of 2 p.m. Friday. BTIG gave the company a buy rating with a $35 price target Thursday.