80,047 views

1 min

Blog

loanDepot Combines Service and Technology to Disrupt the Traditional Lending Process with More Than $125 Billion in Loans Funded Since 2010

Ray FitzGerald 12/20/17

In a Nutshell: Mortgage interest rates have increased over the last year but still remain among the lowest they’ve been in a decade. Home values continue to rise, which makes refinancing a high-rate mortgage a smart choice that can lower your monthly payment and get you to a payoff date faster. Since 2010, loanDepot has increased its market share of the lending sector with online options that make it the nation’s fifth largest retail mortgage originator and the second largest non-bank consumer lender. The company has funded more than $125 billion in consumer loans and offers competitive interest rates and low fees for refinance and debt consolidations. A recent $80 million upgrade to its software and security will soon allow customers to manage their entire loan application online from start to finish.

Time changes everything. The car that looked shiny and new when you drove it away from the dealership doesn’t glisten as brightly once your toddler has spent a year spilling juice and Cheerios onto the backseat.

Our bodies are perhaps the most guilty of change over time. Few people can claim a waistline that looks the same as it did in high school.

The same can be said for loans. The mortgage you took out a decade ago served you well when you wanted to buy a new home. But lower interest rates and — hopefully — improved credit scores might have your eye wandering toward lenders offering to save you thousands of dollars if you refinance with them.

Most consumers naturally think of banks and credit unions when they shop for a loan to refinance their home or consolidate debt. The age-old tradition of getting dressed up and hoping to impress the loan officer has worked for millions of Americans over the last 100 years — but it’s failed just as many.

As evidenced in your car and your creaky joints, time has changed the lending process. Loans are no longer just for banks. Online lenders typically offer lower interest rates and origination fees than their brick-and-mortar competitors because they have lower overhead costs. That potential savings has drawn customers to the internet and away from bank branches when it comes time to apply for a loan.

In less than seven years, loanDepot‘s combination of customer service and technology have helped it become a top issuer of loans for home purchase, refinance, and new construction, as well as personal and home equity loans.

Since its 2010 launch, loanDepot has funded more than $125 billion in consumer loans and become the nation’s fifth largest retail mortgage originator and the second largest non-bank consumer lender.

Chairman and CEO Anthony Hsieh, a lending-industry veteran, founded loanDepot after playing a critical role in developing LoansDirect.com, E*TRADE Mortgage, and LendingTree.

Anthony’s goal at loanDepot’s inception was to disrupt a lending industry dominated by traditional banks that — at the time — were just emerging from the US subprime mortgage crisis that caused many institutions to either merge or simply go out of business.

Anthony handpicked his leadership team and set out to create a company that provides a high level of customer service and loan terms the competition couldn’t match.

Manage Debt with Refinancing or Consolidation Options

Refinancing an existing mortgage can be expensive. Many lenders promise applicants long-term savings with a reworked loan, but much of that savings can be negated by the upfront lender and appraisal fees.

An affordable refinance loan can lower your interest rate and monthly payments. A new loan can also move you to a fixed rate and decrease the time it takes to pay off your loan. For homeowners currently managing high mortgage payments and unfavorable interest rates, that can be a life preserver in rocky waters. But, before you sign your name on the dotted line, make sure you understand the terms of any loan.

Refinance offers include 15-, 20-, and 30-year loan options with competitive interest rates, transparent terms, and origination fees that match — or beat — those of most competitors. Traditional fixed- and adjustable-rate mortgages are available, along with loans through government-backed Fannie Mae and Freddie Mac, as well as the Home Affordable Refinance Program (HARP) that help underwater or near-underwater homeowners refinance their home at a lower rate.

Once loanDepot approves a refinance, the customer becomes eligible for a lifetime guarantee — meaning the company will waive all lender fees and reimburse appraisal fees on any future refinancing of the same property through the same owner. That option empowers homeowners to keep a competitive interest rate over the life of their loan.

Also available through loanDepot Personal Loans are consolidation loans that range between $5,000 and $35,000 and include no hidden fees or collateral with a fixed rate and repayment plan.

The fast approval process — which the company says can take place in a matter of minutes for many applicants — has led to more than $500 million in approved loans.

Once approved, funds can be directly deposited into the borrower’s bank account within one to three business days.

These loans are built for combining multiple high-interest loans into one package with a fixed interest rate and payment amount. Personal loans can also be used for medical and dental bills, home improvement, or to finance a vehicle or other major purchase.

Since personal loans typically has longer terms and lower rates than credit cards, they are often more attractive than plastic for funding purchases for which you need financing.

$80 Million in Tech Upgrades to Push Ahead of the Pack

Although loanDepot is already one of the leaders in online consumer lending, the company has its sights trained on future innovations to further set it apart from competitors.

In March of 2017, the company completed an 18-month, $80 million investment in technology that upgraded its proprietary digital lending platform with its introduction of mello™.

The platform aims to help create the FinTech ecosystem of the future and includes an intuitive web-based consumer portal, a state-of-the-art mobile point of sale system, and a fully digital mortgage loan application experience.

“Technology advancements have revolutionized the way we work and live, yet the mortgage industry has largely remained devoid of modernization,” Anthony said in the press release accompanying mello’s announcement. “As a profitable and growing lender, we’re in a unique position to invest aggressively in developing our own advanced technology.”

The technology push helps digital-age consumers who are used to performing most of their banking transactions on mobile devices. The company will soon release further upgrades that include a fully digital mobile loan application that works with or without the assistance of a licensed loan officer.

Simplifying the Online Lending Experience

Home values have steadily increased over the last five years, limiting the number of US homeowners whose mortgage balance is greater than their home value. Still, the total number of mortgaged homes with negative equity hit 3.17 million or 6.2% of homes with a mortgage at the end of the fourth quarter of 2016.

Having a mortgage with negative equity is not the only reason for researching a potential refinance of your loan. Lower interest rates could decrease your monthly payment and the amount of time it takes to pay off your loan.

Homeowners looking to refinance can benefit from loanDepot’s lifetime guarantee that waives lender fees and reimburses appraisal costs of future refinancing for the same property — meaning you’ll always have access to competitive terms when interest rates decrease.

Consumers with high-interest debt — such as medical bills, credit cards, or traditional bank loans not tied to their mortgages — can save by rolling that debt into one low-rate consolidation loan from loanDepot. A consolidation lowers your interest rate and allows you to pay the debt with one monthly payment over time. Depending on the length of your loan, your monthly payment could be substantially lower.

In less than seven years, loanDepot’s superior customer service and competitive loan interest rates and fees have helped the company rank among the leaders in the lending space — both online and in person.

Ray has more than a decade of journalism experience, writing for publications such as The Gainesville Sun, Miami Herald, and Investment Times. He’s covered everything from Bitcoin and blockchain technology to real estate investing and the stock market, but most enjoys sharing creative ways to budget and save money to make income go further. He works closely with various firms and individuals to learn more about traditional and alternative investments in his spare time, and greatly enjoys watching and reading about classic films from the silent period through the advent of color.
« Back to: Blog