Rising interest rates don’t stop LoanDepot from growing both market share and profits, thanks to growing brand recognition and multiple channels to reach homebuyers who now represent more than a third of the company’s activity.
The first year of a multi-year partnership with Major League Baseball helped increase brand awareness by 14% in just one quarter, with LoanDepot’s sponsorship of the League Championship Series in October reaching millions of baseball fans, the company said.
LoanDepot now claims 3.5% market share, up 46% from a year ago, making it one of the top three retail mortgage lenders playing in the same league as Rocket Mortgage and Wells Fargo.
Despite the drop in refinancing volume – a problem facing the industry as a whole – LoanDepot posted net income of $ 154.3 million in the third quarter, compared to $ 26.3 million in the second quarter. Although total mortgage origination volume fell 7% quarter over quarter to $ 31 billion, higher selling profit margins made these loans more profitable.
Anthony Hsieh
“When rising interest rates reduced demand for rate and term refinances, we pivoted to focus on providing less interest rate sensitive loans, such as refinancings of purchase and withdrawal, ”said Anthony Hsieh, CEO of LoanDepot, on a call with investment analysts. . “Combined, these two categories of loans increased 13% in the last quarter.”
Origins of LoanDepot mortgages by purpose

Source: Data from LoanDepot regulatory filings compiled by Inman
Even with the rise in withdrawals, to $ 21 billion, total refinancing volume was down 37% from a high of $ 33.65 billion in the first quarter. However, LoanDepot was able to counter seasonal trends and grow its lending to purchase business for the second consecutive quarter.
At $ 11 billion, third-quarter purchase loan volume was up 6% quarter-over-quarter and 29% from a year ago. Purchase loans accounted for a record 34 percent of total mortgage originations, up from 19 percent in the first three months of the year.
This is a notable achievement for a company that does most of its business with existing owners looking to refinance directly through the LoanDepot website.
The Foothill Ranch, Calif. Based lender has invested heavily in their end-to-end digital lending platform, mello, which generates quotes in seconds and provides a streamlined application process with little to no human intervention .
This has been great in enabling refis, but LoanDepot is also using mello as a selling point as it grows its lending to buy business through its partner channel, which includes joint ventures with home builders and relationships with home builders. referral with real estate agents.
LoanDepot Mortgage Arrangements by Channel

Source: LoanDepot data regulatory filings compiled by Inman
In the third quarter, LoanDepot’s partner channel accounted for $ 7 billion in loans, or about 22% of total originations. While this is lower than the record $ 8.05 billion in partner channel origins seen in the first quarter of 2021, it represents 7% quarter-over-quarter growth and 30% growth. annual.
On October 1, LoanDepot and its agent matching affiliate, mellohome, has launched a ‘Grand Slam Package’ offering cash rebates of up to $ 7,000 on bundled services when customers buy and sell with a preferred mellohome real estate agent, finance with LoanDepot and choose title insurance services of the company.
“Looking ahead, we believe our industry is moving towards consolidating service providers for homeowner products and services and that LoanDepot is leading the way,” Hsieh said.
LoanDepot Grand Slam’s offering “paves the way for this consolidation with rapid success in the form of substantial increases in the volume of purchase leads, realtor introductions and real estate listings,” Hsieh said. “We won’t stop there, we are already planning to offer additional products and services for the benefit of our customers.
All of this gives the impression that LoanDepot is keeping a close eye on vertically integrated lenders like Better, which not only provides bundled mortgage, title and closing services, but recently introduced a cash offering product to help buyers. to prevail in the bidding wars.
It has also not escaped Hsieh that Rocket Homes – a sister company to LoanDepot’s main rival, Rocket Mortgage – is considering boosting its loan-to-buy business by hiring internal agents and launching an iBuyer program to help. existing homeowners to make unforeseen deals on their next home.
Legal concerns
Real estate companies providing bundled services and referrals should exercise caution so as not to violate the anti-recoil provisions of the Real Estate Settlement Procedures Act (RESPA).
The parent company of Rocket Mortgage has revealed that it is cooperating with a May 2020 civil investigation request from the Office of Consumer Financial Protection “to determine whether Rocket Homes conducted business in a manner that violated RESPA.”
LoanDepot is currently litigating several lawsuits unrelated to RESPA, including a lawsuit brought by former COO Tammy Richards alleging loan underwriting irregularities and employment law claims.
In a Complaint of September 21 Filed in Orange County Superior Court, Calif., Richards said she was forced to quit her job after refusing to approve loans without documentation. Her complaint also alleged that senior management fostered a “misogynistic ‘frat house’ culture” in which women were subjected to “discriminatory and offensive practices”.
LoanDepot CFO Patrick Flanagan told investors the company was also facing lawsuits filed in the second quarter by shareholders “motivated by the recent drop in our stock price,” which it disputes.
“Our procedures require that all loans be closed with appropriate documentation and subject to appropriate quality control. We intend to defend ourselves vigorously and are confident that we will prevail, ”said Flanagan. “These lawsuits and their claims have had no significant negative impact from our warehouse lenders on agencies or investors. We have not yet recorded any liability related to these lawsuits. “
Since an initial public offering at a price of $ 14 per share in February, shares in LoanDepot have traded for as low as $ 5.95 and up to $ 39.85. Following Monday’s earnings announcement, LoanDepot shares rose more than 20% to close at $ 8, before forgoing some of those gains the next day.
Email Matt Carter