LoanDepot is gearing up for a revival in the mortgage industry

LoanDepot is investing in technology and preparing for an industry-wide recovery in mortgage lending volumes.

While the home loan solutions provider has cut its costs by 36% in 2023 to accommodate today’s lower market volumes, it has also invested in platforms and systems to increase productivity, loanDepot’s president and CEO Frank Martell he said on Tuesday (March 12) during the company’s quarterly earnings report.

“Going forward, we expect higher levels of automation and the benefits of productivity programs to support increased operating leverage and fund significant reinvestments in our service and original platforms,” ​​Martell said during the call.

Investing in critical business platforms and processes is a key element of the company’s plan to return to profitability, Martell said. These platform and process improvements will continue to benefit the company even after the market recovers.

As an example of the tangible benefits the company has already received from these investments, Martell pointed to loanDepot’s new loan digital underwriting enginemelloNow, which was introduced in December 2023 after several quarters of beta testing.

“MelloNow uses a digital verification process that quickly analyzes credit reports, detects fraud, verifies income and employment data at the point of sale, and provides conditional loan approval to customers in minutes, not hours or days,” Martell said during the call. .

The company is making these technology investments at a time when its revenue is down 22% for the full year 2023, according to Tuesday’s release of earnings.

During the earnings call, Martell attributed the decline to lower market volumes and loanDepot’s exit from the wholesale market in mid-2022.

looking ahead origination of mortgage Unit volumes are expected to grow 17% in 2024, Martell said, citing the forecast Mortgage Bankers Association.

“We enter 2024 with a more sustainable revenue model built on a strong multi-channel business and an efficient, high-quality service platform that underpins our strategy to become a trusted partner throughout the home ownership journey,” said Martell.

During the call, Martell also addressed January data leak in which an unauthorized third party obtained the personal data of 16.9 million úrberDepot customers.

“The challenge posed by the increasing sophistication of cyber attackers requires unprecedented focus and close coordination between the public and private sectors to ensure the private sector’s ability to prevent these types of breaches in the future,” Martell said.

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