Remax resets mortgage strategy under new division leader

In the time since Vic Lombardo became president of mortgage services at Remax Holdings over two months ago, the company has "taken a new view of the mortgage opportunity," Eric Carlson, CEO, said in the third quarter earnings call.

Among the units under Lombardo's purview are Motto Mortgage, which offers mortgage broker franchises, and Wemlo, which handles loan processing. He took the job following the retirement of Ward Morrison.

"In Vic's first 2 months, he's rolled [up] the sleeves, dug into the operations, surfacing a number of innovative ideas to drive growth and add additional revenue streams and increase the operational efficiency," Carlson said. "We're already putting foundational pieces in place."

He promised to share more details on Remax's mortgage strategy in February.

"There's opportunities there to do a little bit about what we've done in real estate, quite honestly, and change the model to be a little bit less fixed and more variable," Carlson said later in the call. "We've got to be in a position to help our network and our LOs really find business and capitalize on business, which not only helps the profitability of their business, but the value of owning a Motto franchise and our value proposition, quite frankly."

Adjusted EBITDA for the mortgage segment, a non-GAAP measurement, was a loss of $1.3 million, compared with a $1.52 million loss in the second quarter and a loss of $1.12 million one year previous.

The total number of open Motto offices fell to 210 from 219 at the end of the second quarter.

Revenue at the parent company (minus marketing fees) fell by 5.5%, to $165.2 million.

Remax's year-over-year change in organic revenue included lower mortgage segment revenue and franchise sales.

Total mortgage revenue of $3.39 million included continuing franchise fees of $2.47 million and franchise sales and other revenue of $914,000. This compared with $3.74 million for the third quarter of 2024, with $2.67 million of continuing franchise fees and $1.07 million from franchise sales and other revenue.

For the quarter, Remax Holdings had net income attributable to the company of just under $4 million, compared with $4.7 million in the second quarter and approximately $1 million for the third quarter of 2024.