Hello everyone, and today we are going to look at an investment in a large American independent mortgage agency that lends against the security of residential real estate, as well as refinancing such loans. In fact, loanDepot’s assets are valued at nearly $9 billion. And you can get even more information here https://teuscherfifthavenue.com/loandepot-loanadministration-com/. Only on this site you will find all the details and instructions on how to register and how to use it. So, don’t waste your time and follow the link soon!
The Company Loandepot
LoanDepot is a major U.S. independent mortgage agency. The company makes loans to purchase residential real estate, as well as refinances them. In addition, some of the loans issued are securitized and sold to institutional and other investors. The company has about $9 billion in assets.
loanDepot was founded in 2010 and is headquartered in California. The company has the advantage of having an efficient customer-centric digital mello platform based on big data, machine learning and artificial intelligence technologies. This platform reviews the client’s application and makes the best offer based on their financial profile and other parameters. Mortgage loans are also serviced through this platform. LoanDepot conducts most of its operations through digital online channels. However, the company also has an extensive network of branches located throughout the United States.
Marketplace
For Americans, buying your own home is one of the most important investments in life, as a result, the U.S. housing market in the past decade shows a fairly high growth rate. And the pandemic coronavirus, which broke out last spring, caused only a very short-term slump – by the fall of sales of homes and the primary and secondary market have exceeded pre-crisis levels, which contributed to a significant increase in demand for housing amid ultra-low interest rates and the migration of people from major cities due to the transition of many employees to remote work. Housing prices are steadily rising as well.
Thanks to this over the past 10 years, the mortgage market in the U.S. showed a growth rate markedly higher than GDP – an average of 10.2% a year, according to the Mortgage Bankers Association (MBA).
Against this background, the business of loanDepot is actively growing in recent years. So, if in 2010 the company was actually a small and little-noticed startup, then in the period from 2015 to 2020, it has already become a significant player in the market. For the first 9 months of 2020, the company’s mortgage loans were $63 billion (the second highest among independent mortgage providers, according to MBA data) compared to $45 billion at the end of the whole of 2019, and its market share reached 2.6%. Moreover, if you need to calculate the mortgage, you can use the Mortgage Calculator . This will help you quickly make your plans and allocate your budget.
Note also that the company maintains relationships with clients throughout the mortgage loan lifecycle, so it receives a wide range of information about borrowers, including their future financing needs. This allows loanDepot to effectively offer current customers new products and services, which has a positive impact on customer loyalty and, consequently, the profitability of the business. The company’s customer retention rate for 9M 2020 was 61% and was one of the highest in the industry.
Outlook
According to the MBA, total mortgages issued in the States as of the end of Q3 2020 were around $11 trillion, with the figure expected to reach $12.2 trillion by the end of 2022. The MBA predicts that $2.7 trillion in new mortgages will be issued in 2021 and another $2.5 trillion next year.
I hope that loanDepot, thanks to its efficient business model and well-known brand, will continue to benefit from the rapid growth of the U.S. mortgage market and can further increase its share in it.
Financial Results
The company significantly improved its financial performance in 9M 2020 with strong growth in revenue from loan sales. Revenues rose 227% relative to 9M 2019 to $3 billion, and adjusted net income soared to $1.1 billion, compared to a profit of only $27.2 million a year earlier.
The top line item is net income, which is generated from the sale of loans, including a premium over book value less provisions and certain fees, and also takes into account gains (losses) on derivatives and changes in the fair value of loans for sale and the appraised value of servicing rights. Assets at the end of Q3 2020 reached nearly $9 billion compared to $5 billion at the end of 2019. Core assets are mortgages for sale (about 57% of all assets this year).
Investment Opinion
loanDepot is a mortgage agency that originates and refinances and securitizes residential real estate loans. The market in which the company operates has shown high growth rates in recent years, which are expected to continue in the medium term. At the same time, thanks to an effective business model and a well-known brand, loanDepot has been able to increase its market share and show steady growth of financial indicators. In general, loanDepot looks quite attractive for investment, but to make a recommendation on participation or non-participation in the IPO of the company we would like to receive more detailed information about the parameters of the offering.
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