Home Topics Real Estate How (and why) creditDepot is now attracting clients

How (and why) creditDepot is now attracting clients

LoanDepot has set up three joint ventures with builders in just over four months.

Having grown to become the fourth largest mortgage lender in the country, primarily by refinancing loans made directly to consumers, creditDepot intends to expand its purchase credit business by establishing additional joint venture partnerships with home owners.

A joint venture with LGI Homes of Woodlands, Texas announced Thursday that it is the third such deal that creditDepot has closed in just over four months. The company announced joint ventures with Schell Brothers in March and with Brookfield Residential in December.

Each of the joint ventures will leverage melloDepot’s end-to-end digital lending platform, mello, which the company launched in 2017 after investing $ 80 million in development over an 18-month period.

Mike Snider

Mello offers a “seamless credit experience” that ensures that “our customers enjoy an exceptional buying experience from the first visit to the completion of the loan,” said Mike Snider, chief operating officer of LGI Homes, in a statement. The General Counsel of Schell Brothers, Jon Horner, gave a similar rating in March and called mello “the best fintech platform in the industry”.

The newest joint venture, LGI Mortgage Solutions, will operate in 20 states and Washington, DC: Alabama, Arizona, California, Colorado, Florida, Georgia, Maryland, Minnesota, Nevada, New Mexico, North Carolina, Oklahoma, Oregon, Pennsylvania, South Carolina, Tennessee, Texas, Virginia, West Virginia, and Washington.

Dan Pena

“We have been a preferred lender with LGI Homes since 2015 and have been extremely impressed with each other’s scalability while providing industry-leading customer service,” said Dan Peña, executive vice president of national joint ventures for creditDepot, in a statement.

The joint venture LoanDepot formed with Schell Brothers is Henlopen Mortgage, while the partnership between LoanDepot and Brookfield Residential is BRP Mortgage. In the past ,kreditDepot has established joint ventures with several other builders and at least one real estate agent, including:

In 2017kreditDepot announced a partnership to offer a mello-based mortgage option through iBuyer pioneer Offerpad. However, it is unclear whether this partnership continues.

In a filing for approval related to the company’s IPO in February, creditDepot referred to a subsidiary, Offerpad Home Loans LLC. In an August 2020 blog post, Offerpad said it had “worked to streamline the home loan process” through its Offerpad Home Loans mortgage arm.

Although Offerpad partnered with creditDepot in 2017, the site doesn’t currently offer users a home loan option.

The website that the blog post links to, OfferpadHomeLoans.com, is marked as unsafe by web browsers. A landing page on the Offerpad website Offerpad.com states: “Offerpad Home Loans” is “Coming Soon”.

Neither LoanDepot nor Offerpad responded to requests for comments on the status of the 2017 partnership agreement.

In its most recent annual report to investors, creditDepot found that its share of net income from its joint ventures decreased 19 percent to $ 10.4 million in 2020, largely due to the “sale and liquidation” of two joint ventures Ventures in 2019.

LoanDepot net profit from joint ventures

Source: LoanDepot approval applications.

This is just a fraction of the $ 2 billion net income loan reported in 2020 after taking out mortgages after taking out $ 100.8 billion in mortgages and generating $ 4.3 billion in revenue . Most of that business – 80 percent – is through a retail strategy that uses digital marketing and 2,300+ loan officers to reach consumers directly.

However, according to preliminary Home Mortgage Disclosure Act data analyzed by iEmergent, only about 28 percent of LoanDepot’s 2020 business consisted of purchase loans. While creditDepot was the fourth largest overall lender in 2020, it was the seventh largest purchase credit provider in the country.

With mortgage lenders expecting the refi boom to weaken and mortgage purchases expected to hit new all-time highs this year, the battle to connect with homebuyers is on.

For creditDepot this means that the 20 percent of its business is increased by referral partners such as mortgage brokers, brokers and builders. In addition to joint ventures ,kreditDepot operates a wholesale credit channel through which mortgage brokers can access the same technology that supports the company’s retail strategy.

Email Matt Carter

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