Fast-growing mortgage lender loanDepot.
com LLC has tapped industry veteran and former Nationstar Mortgage LLC executive David Norris as president and chief operating officer.
Norris arrives at Foothill Ranch-based loanDepot aims to strengthen its operations and push for growth in a transitioning mortgage industry after the recession, said Chairman and Chief Executive Anthony Hsieh.
“David will run the day-to-day [operations], while I will be focusing much of my efforts on capital requirements, company infrastructure … and managing the board of directors,” Hsieh said, adding that the COO seat at the company level had been vacant while there were divisional chiefs, who will continue in their roles and report to Norris.
LoanDepot, founded by Hsieh in 2010, is among the largest nonbank independent retail mortgage lenders in the U.S. It’s expecting to fund $14 billion in loans this year, versus $8.4 billion in 2013 and $6.7 billion in 2012. Part of the growth is thanks to a merger last year with Scottsdale, Ariz.-based imortgage.com Inc. The deal boosted the combined company to No. 3 on a list compiled by Inside Mortgage Finance of private, independent lenders in the U.S. based on funding levels. LoanDepot’s peers include Detroit-based Quicken Loans Inc. and Guaranteed Rate Inc. in Chicago.
LoanDepot has about 2,600 employees, some 1,000 of whom are in Orange County, and about 60 branch offices, mostly in the western U.S. The company is working on building a stronger presence in the Southeast, Hsieh said.
Norris was most recently chief marketing officer at Nationstar, the operating subsidiary of Lewisville, Texas-based Nationstar Mortgage Holdings Inc. Publicly traded Nationstar has a market value of about $2.8 billion.
He also was president of Nationstar’s Greenlight Loans unit in Irvine. Nationstar last year acquired Greenlight, where Norris was chief executive, for about $75 million.
Norris’ career in the mortgage industry began in 2006 at LendingTree LLC, where he became president of its LendingTree Loans mortgage business in 2008. He helped oversee the unit’s 2012 sale to Discover Financial Services Inc. for about $46 million.
Norris said there’s a “significant opportunity” for loanDepot as consumers have shifted their views of home ownership following the recession.
“The market from the consumer’s point of view is different. The customer is focused on buying repossessed homes and short sales,” he said. “After the market crisis … it took the housing market some time to adjust. That’s when you need a lender that understands the market to buy foreclosed homes. A lot of the homes are in the auction market, too. It’s a very different transaction than what a consumer has done before.”
Hsieh agreed.
“We’re no doubt in a transition,” he said. “We can’t really control the external factors. What we can do is be prepared to take advantage of the opportunities.”
Opportunities won’t come too easily, though, he said, pointing to declining mortgage originations industrywide. The Mortgage Bankers Association, for instance, had an estimated $1.2 trillion in originations this year versus about $1.8 trillion in 2013. The organization recently adjusted its 2014 estimate to $1.1 trillion. The industry had hit nearly $4 trillion at its peak in 2003.
“It’ll be very challenging for mortgage lenders the next year or two,” Hsieh said. “A lot of people are locked out of the market because of qualifications due to lack of equity, and more importantly, we as an industry don’t have as many mortgage products available. [The industry is] pretty close to the bottom.”
That means it’s poised to grow, Hsieh said, but not until several macroeconomic factors emerge.
Those factors—improved consumer confidence, lower unemployment, higher incomes, and a return of mortgage products that aren’t government supported—may not come for another four to eight quarters, he said.
Hsieh, a serial entrepreneur, has seen plenty of the effects of economic cycles on the mortgage lending industry.
He started LoansDirect.com in 1989 and sold it to E*Trade Financial in 2001. He soon established Home Loan Center Inc., which in 2004 was acquired by LendingTree, then part of IAC/InterActiveCorp. He remained in leadership with LendingTree for a few years, including a brief period working with Norris, and he spent some time fishing competitively before starting loanDepot in 2010.
Hsieh said the focus of his earlier ventures was to be a boutique lender but that the objective now at loanDepot is to gain bigger market share.
Norris is expected to help accelerate that agenda, he said.
“We have an opportunity to do that because the crisis wiped out all the top lenders,” he said. “We look at the marketplace as having quite a few vacant seats for top-tier market share leaders … We’ll have to go through this down market over the next few years. And the industry is going to right-size itself, and the companies with the most efficiency, with the best people, with a good capital base, [are] going to get through this just fine.”
