The parent of LendingTree is another entry on the list of companies suffering under the weight of bleak housing and credit markets.
Charlotte-based Tree.com Inc. reported Thursday that it lost $22.5 million in the third quarter, compared with a loss of $6.3 million during the same period a year ago. The company, whose various Web sites match consumers with lenders for mortgages and other products, is taking hits on multiple fronts as consumers lose their stomach for buying real estate and lenders look to save money by spending less to get customer leads.
A tight credit supply has added another dimension to the problem, by limiting the types of loans the company is able to originate. The company's lending revenue declined 34 percent over the year.
Chief executive Doug Lebda said he was pleased with the third quarter “compared to the carnage among (other) mortgage lenders.” Tree.com has cut costs aggressively this year, slashing ad spending and reducing other administrative costs. It's down to about 750 employees, compared with about 1,650 a year ago.
Company executives noted how the business has been slimmed down and simplified, and that any further cuts would require them to radically change the way they've been doing business.
Lebda said home prices must stabilize before the country's mortgage business can stabilize, but he expressed confidence for his company. “We've been here,” he said. “We've done this before, and we can do it again.”
He touched on a number of plans that would enable lenders to drive revenue, including making the Web sites more conducive with Internet search engines. The company also plans to introduce a number of platforms for customers, such as technology that will better sort customer leads for lenders or a more sophisticated alert system that notifies potential borrowers whenever, say, the Federal Reserve cuts interest rates. Tree.com is postponing the launch of its student loan site, Lebda said, because lenders aren't interested in those leads.
This is Tree.com's first earnings period. Lebda founded LendingTree in the '90s and sold it in 2003 to New York Internet conglomerate IAC/Interactive Corp., where he eventually became president. This year, IAC spun off LendingTree and Lebda took the helm, renaming it Tree.com to signify its diversification into other services. Tree.com is the parent of several brands and businesses in financial services and real estate, including LendingTree, GetSmart.com, iNest.com and Domania.com.
One bright spot in the third quarter was the RealEstate.com, REALTORS® subsidiary, a real estate brokerage that increased closings by 51 percent.