LoanDepot restructuring creates new digital products/services unit

Nonbank heavyweight loanDepot announced on Thursday an operational restructuring with the creation of a new business division called mello, under the leadership of the digital technology veteran Zeenat Sidi. 

The California-based lender plans to use mello to boost the development of innovative products and services in a market that has gotten ultra-competitive, with power buyers, real estate brokerage, mortgage lenders and fintechs all vying to create an end-to-end platform. 

Mello’s unit, which shares the name of the software platform loanDepot launched in 2017, will operate side-by-side with the company’s mortgage origination and servicing division.

Both units will report directly to Anthony Hsieh, loanDepot’s chairman and CEO. 

“Accelerating the delivery of multiple new products and services – above and beyond mortgage products – through our mello operating unit will allow us to give consumers access to a complete suite of digital-first homeownership,” Hsieh said in a statement. 

The new operations unit will include the customer contact center, the mello DataMart, and the performance marketing engine. These units are responsible for distributing 10 million data-enriched leads annually and connecting more than a million customers daily, according to loanDepot.  

Three adjacent businesses – mellohome Real Estate Services, melloinsurance, and mello title and escrow services – will also be under Sidi. 

Last year, loanDepot’s origination volume topped $137 billion in 2021, an increase of 36% from the previous year, though gain-on-sale margins, profitability and the company stock price all fell. The company achieved 3.4% market share for the full year, up from 2.5% in 2020.

A key strategic focus for loanDepot in the next few years is realizing business from its lead generation operations.

In January, Hsieh said in a statement that the industry is a cyclical one, but loanDepot’s business was “purpose-built with period of pressure in mind,” considering its proprietary tech stack, diverse mix of channels, and a marketing machine.

“We control our lead flow, our customer contact strategy and the point of loan origination. This is a critical competitive advantage, enabling us to pivot and adjust our production as market trends demand,” he said

Sidi has the resume for a digital products and services job. She has held roles with Royal Bank of Canada, Capital One, and Sofi, which she joined in 2018 to build the home loans business but ended as the head of enterprise lending and investment for Galileo (a company SoFi acquired in 2020). Prior to joining loanDepot, she was at the fintech company Mission Lane

LoanDepot also recently hired George Brady, a longtime executive at Capital One, as chief digital officer. He’ll focus on refining and building out the lender’s technology stack. LoanDepot’s former chief information officer, Sudhir Nair, left in January.

The reorganization comes about six months after loanDepot’s former head of operations, Tammy Richards, dropped a bombshell lawsuit that alleged that loanDepot, in a bid to drum up money during the refi boom and in preparation for its initial public offering, closed 8,000 loans without proper documentation at Hsieh’s behest.

Richards claimed she was demoted for not complying with Hsieh’s alleged demands to close loans without credit reports. After a stint on medical leave, Richards, who once oversaw 4,000 employees, resigned in March 2021.

LoanDepot disputed the claims made by Richards, who worked in senior roles at Wells FargoBank of AmericaCaliber Home Loans and Countrywide Financial (one of the bad actors in the subprime loan crisis) before joining loanDepot. 

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