LoanDepot forms a joint venture with Farm Bureau Bank

As lenders move from refinancing to buying loans, Depot Loan draws on its history of partnering with home builders.

Building on its history of forming joint ventures with home builders, creditDepot is partnering with Farm Bureau Bank on a new joint venture that will provide home loans and home refinancing to more than 5 million Farm Bureau members in 45 states. .

Dominick deorio

Dominick Deorio, Vice President of National Accounts Management for CreditDepot, will serve as President of the joint venture, Farm Bureau Mortgage.

Based in Reno, Nevada, Farm Bureau Bank is a federally licensed savings bank that provides banking services in all but five states – Illinois, Michigan, Missouri, New York and Wyoming. Farm Bureau Bank had previously referred mortgage borrowers from Cornerstone Home Lending, which made loans in 16 states.

William Hileman

“Farm Bureau Mortgage brings great value to our clients, and creditDepot’s technology ensures a smooth and seamless transaction that will allow them to achieve their dreams of homeownership on their terms,” ​​said William Hileman, CEO of Farm Bureau Bank. , in a statement.

LoanDepot’s technology was also cited as a selling point by home builders who have formed three separate joint ventures with the lender since December. The joint ventures, with builders LGI Homes, Schell Brothers and Brookfield Residential, will each use creditDepot’s $ 80 million end-to-end digital lending platform. mello.

Anthony Hsieh | Photo credit: LoanDepot

in a May 3 call for investorsAnthony Hsieh, founder and CEO of creditDepot, said the mello platform enables the company to “scale our operations for changes in volume in a highly efficient manner,” alluding to forecasts that mortgage lenders will need to grow their purchase loan business if interest rates go up and refinances go down, as expected.

LoanDepot, which was made public in February, had a banner year in 2020. Thanks in large part to the growth of its refinancing business, fourth largest mortgage lender overall in 2020, but ranked 7th in purchase loan origination, according to preliminary data from the Home Mortgage Disclosure Law analyzed by iEmergent.

During the first three months of 2021, Reported Depot Loan that 81 percent of the $ 41.5 billion in mortgages it originated were refinances. But Hsieh said that “when asked what my buy / refinance ratio is, I completely ignore that question,” because he considers purchase loans and mortgage refinancing to be separate “insights.”

With business coming from three channels: direct to consumer through creditDept.com, plus approximately 2,600 retail loan officers “in the market” and more than 200 associated loan officers as of March 31, Hsieh said creditDepot is experiencing a “tremendous boost” in your home loan business.

LoanDepot grows purchase loan and refinance business

Source: LoanDepot quarterly report to investors.

LoanDepot’s purchase loan originations increased more than 80 percent during the first quarter of 2021 from a year earlier, to $ 7.92 billion. But refinancing posted even more dramatic growth over the same period, increasing 211 percent to $ 33.56 billion.

In addition to being the largest joint venture homebuilder lender, Depot Loan plans to grow its purchase lending business through acquisitions, Hsieh told investors.

“We made the decision to be in this business in 2012, when the world thought we were crazy to go back to what we might want to call brick and mortar, but it isn’t,” Hsieh said. “These are remote market loan officers who work and live in the communities they serve. We have tremendous momentum here, with organic growth, and we have some conversations with potential significant acquisition targets. “

Jeff Walsh

Jeff Walsh, CreditDepot’s chief revenue officer, said in the same investor call that, during the first three months of the year, the company has “really aggressively stepped up our hiring of what we call qualified originators in the market, which is focused on specifically in the percentage of purchased businesses that they have historically done. “

In the first four months of the year, Walsh said, creditDepot has “added more than $ 4 billion of net origination through organic contracting of originators in the marketplace.”

If those new hires help creditDepot grow its home loan business, that could translate to more refinances down the road, with the company “recouping” 72 percent of existing borrowers who refinance.

For now, joint ventures account for a small, but growing, part of the LoanDepot net earnings, increasing from $ 1.3 million in the first quarter of 2020 to $ 2.2 million in the first three months of 2021.

LoanDepot net earnings from joint ventures

Source: LoanDepot Regulatory Records.

In its annual report to investors, LoanDepot said joint venture net earnings fell 19 percent in 2020, to $ 10.4 million, following the sale and liquidation of two joint ventures in 2019.

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