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Thursday, Jul 18, 2024
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Hsieh’s Back With Home Loans

It’s taken less than a year for Anthony Hsieh’s latest venture to become one of the largest online lenders in the country.

His LoanDepot.com in Irvine is funding more than $300 million in loans a month and shows no sign of slowing down.

“We have over 1,000 people that contact our office for mortgages every day,” said Hsieh, a Newport Beach multimillionaire who made his money building mortgage businesses and then selling them.

Since LoanDepot.com’s January launch, the company has opened two offices in Irvine, hired more than 500 people and been approved to handle mortgages in 36 states.

LoanDepot.com plans to open its first office this week outside Orange County in Rancho Cucamonga, where it plans to employ about 100 people.

With tighter regulations and higher compliance costs since the mortgage crash a few years ago, Hsieh (pronounced “shay”) said he sees nothing but opportunity, especially with a competitive field flattened by the downturn.

“There’s a lack of good lenders that are available to the public,” he said. “That’s one of the primary reasons I came back. So far it’s been very lucrative.”

Loans

LoanDepot.com offers flat-fee pricing on fixed-rate mortgages, jumbo loans and adjustable-rate mortgages.

The company uses a line of credit to fund its loans.

Borrowers come to the company via its website, which allows them to enter information and get a list of possible loans.

Borrowers go through most of the process of applying and closing a loan online. For the rest, LoanDepot.com sends out employees to get documents signed, signatures notarized and closings recorded.

The average mortgage closes in about 29 days, less than half the industry average, according to Hsieh.

“We work off of volume,” said Hsieh, who expects to double employment to more than 1,100 workers in the next year.

LoanDepot.com does all its marketing online. This year, it’s on track to spend $12 million reaching home buyers and homeowners. Next year, LoanDepot.com’s marketing budget is expected to top $22 million, Hsieh said.

Hsieh started LoanDepot.com with his own money and investments from private equity firm Parthenon Capital Partners of San Francisco and Boston and Washington, D.C.-based investment bank Milestone Merchant Partners LLC, which has a Newport Beach office.

He has brought on lawyers, administrators and others who worked for him on prior ventures.

Hsieh hired Cece Palmieri as his personal assistant 10 years ago at his first venture, Huntington Beach-based LoansDirect.com. He later took her with him to Irvine’s HomeLoanCenter.com and now Loan-Depot.com.

Palmieri said she isn’t worried about jumping into another mortgage business, despite the uncertain financial landscape and the public pummeling the industry took in the meltdown. She said she trusts Hsieh will turn LoanDepot.com into another success story.

“He seems to be able to succeed no matter what the environment is,” she said.

Mortgage banking lawyer Peter Macdonald worked with Hsieh for three years at HomeLoanCenter.com.

Hsieh told Macdonald about his plan to start and build LoanDepot.com in much the same way he had with previous businesses.

It didn’t take too much convincing for Macdonald to jump aboard, he said.

“I wanted to take the risk of a startup rather than a typical corporate job,” said Macdonald, who was hired as senior vice president and lead counsel. “I buy into this approach to business. When push comes to shove a lot of mortgage companies are mired in the day-to-day problems with what the company is experiencing rather than what the consumer is experiencing.”

History

A 25-year industry veteran, Hsieh has seen plenty of booms and busts but seems to have escaped the worst of times before they hit.

LoansDirect.com was an early online lender that grew from 10 to 800 employees. E*Trade Group Inc. bought the company in 2001.

Hsieh went on to found HomeLoan-Center.com, which expanded to 1,000 employees within two years during the mortgage boom. He sold that company to LendingTree LLC in 2004.

Hsieh served as president of Lendingtree.com for a while, appearing regularly as a mortgage expert on cable news outlets and in prominent newspapers.

He left the company in 2007 as problems mounted. LendingTree.com was racking up heavy losses in the housing slump, fighting lawsuits for allegedly failing to shop loans and was laying off people.

After leaving LendingTree, Hsieh indulged in a passion-turned-business by buying Crow’s Nest Yacht Sales, a Newport Beach yacht dealer. The company was a sponsor of Hsieh’s professional fishing team, Bad Company.

The leisure of a semi-retired lifestyle didn’t suit him for long though.

“I just got bored in the last couple of years,” Hsieh said. “At the end of the day I’m a lifer in the mortgage business.”

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