In breaking news, posted today by Seeking Alpha, the financial group Susquehanna warns that the probe made by the CFPB into Zillow’s co-marketing programs may result in the loss of that revenue stream. Just a few short months ago, we reported on this re-emerging look into Zillow’s Premier Agent program and the potential RESPA violation of ‘kickbacks’ on mortgage partner referrals.
What is expected next? Susquehanna speculates that fines in the tens of millions of dollars will be involved and anything from a revamping to the potential elimination of their co-marketing programs altogether.
Why should agents care? Millions have been using Zillow’s co-marketing products to offset the costs involved in lead generating from the site. If taken away or changed to a point of inefficacy, how many agents will then end up buying leads – and very expensive leads too, to try and make up for this missing hole in their business?
Thomas Claps, Litigation Desk Analyst for Susquehanna, says this development means that ‘a significant amount of EBITDA is at risk.’ They also report formal action may be coming soon since the CFPB issued a “Notice and Opportunity to Respond and Advise” letter.
We’ll keep you updated on all the latest developments as they come in.