LoanDepot files paperwork to go public in 2021

LoanDepot files paperwork to go public in 2021
The moment has finally arrived: California-based lender loanDepot has filed an updated S-1 with the Securities and Exchanges Commission and plans to go public in 2021.

The company, founded by billionaire entrepreneur Anthony Hsieh, said Monday that its affiliate loanDepot Inc. had confidentially filed paperwork, but it hasn’t determined how much stock will be sold or at what price.

In September, Bloomberg reported that loanDepot, which operates in retail, wholesale and correspondent channels, was eyeing an IPO that would see it valued at between $12 billion and $15 billion.

LoanDepot, backed by private equity firm Parthenon Capital Partners, first announced plans to go public in September 2015 but canceled the IPO just hours before pricing, citing adverse “market conditions.” At the time, LoanDepot had sought a market value of $2.4 billion to $2.6 billion.

In March 2017, the company revived plans for an IPO but didn’t follow through.

The updated S-1 shows impressive profitability in recent months. LoanDepot posted net income of $1.47 billion for the first nine months of 2020, up significantly from the $18 million it posted during the same period in 2019.

As of November, loanDepot was the nation’s eighth-largest originator and the 31st largest servicer, according to Inside Mortgage Finance. It now has over 10,000 employees and became the second-largest retail lender in the nation in 2020, behind Rocket Companies.

“We’ve created a company that is built to serve customers throughout the entire loan transaction, from the onset of the purchase or refinance decision through loan closing and servicing,” Hsieh said in the prospectus. “We now possess roughly 3% market share of annual mortgage origination volumes, which makes up part of the $11T total addressable market. Thanks to our brand investment over time, we are also one of the most recognized brands in the industry today. All of this gives us enormous runway. And, to some, it may seem like we are in a much different place than we were eleven years ago. But, from my vantage point, much feels the same.”

LoanDepot originated $79.4 billion of loans in the twelve months ended Sept. 30, it disclosed in its prospectus. The company claimed total revenue of $1.3 billion in 2019 and $3.3 billion for the first nine months of 2020.

LoanDepot’s forthcoming public debut comes during an astonishing period of IPOs for the mortgage industry. Margins are at cyclical highs, typically over 250 basis points, and virtually every independent mortgage bank has posted record profits over the last year.

Rocket Companies and Guild Holdings made their debuts in 2020, and 2021 could see United Wholesale Mortgage, Caliber Home Loans, Homepoint, Finance of America, AmeriHome, Better.com, Guaranteed Rate/Stearns, and SoFi all go public.

LoanDepot will trade under the ticker symbol “LDI,” the company said Monday.

The company recently announced a joint venture partnership with Canadian developer Brookfield. It also has a JV partnership with AV Homes, MTH Mortgage, MSC Mortgage, Tri Pointe Connect, Polygon Mortgage and LGI Homes.

Goldman Sachs, BofA Securities, Credit Suisse and Morgan Stanley are acting as lead book-running managers for the proposed offering. Barclays, Citigroup, Jefferies and UBS Investment Bank will be book running managers, and JMP Securities, Nomura, Piper Sandler, Raymond James & Associates, Inc. and William Blair will act as co-managers for the proposed offering.
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Forbearance rate falls to mid-April levels

Forbearance rate falls to mid-April levels
The U.S. forbearance rate fell seven basis points last week to 5.46% of servicer’s portfolio volume, according to a survey from the Mortgage Bankers Association on Monday. As of last week’s data set, forbearance portfolio share is now below numbers Black Knight reported in mid-April of 2020.

Every investor class managed to see a decline in rate, with Fannie Mae and Freddie Mac once again claiming the smallest forbearance rate at 3.19%.

Ginnie Mae loans in forbearance, which include loans backed by the Federal Housing Administration, have fluctuated greatly in the past several months and fell seven basis points to 7.85%. Although portfolio loans and private-label securities (PLS) experienced the greatest decline after a 10 basis point drop, they still held the largest rate at 8.77%.

Overall, forbearances are decreasing, but the speed at which they are declining is beginning to slow. Last week marked the eleventh consecutive week servicers portfolios have hovered between 5% and 6% – the longest a percentage range has held since the survey’s origins in May.

While it arrives as positive news that forbearances are once again descending, economists worry that the length at which borrowers remain in forbearance may become troublesome.

“The data show that those homeowners who remain in forbearance are more likely to be in distress, with fewer continuing to make any payments and fewer exiting forbearance each month,” said Mike Fratantoni, MBA’s senior vice president and chief economist.

Recent data from Urban Institute scholars predicts the now 2.7 million homeowners who remain in forbearance are likely to end up in worse financial shape than the 3.5 million who exited forbearance earlier.

“Fifty-four percent said they have no or slight confidence that they will be able to resume monthly payments when forbearance ends,” the Urban scholars said.

According to Fratantoni, those borrowers who do exit are also more likely to require a modification to their ongoing repayment plans.

Between June 1, 2020, and Jan. 3, 2021, MBA reported that 29.1% of exits represented borrowers who continued to make their monthly payments in forbearance.

During that same time period, those who exited without a loss mitigation plan in place instead inched up to 13.3% from 13.2% the week prior.

Fratantoni estimates slowdowns in recent unemployment numbers will prevent any rapid improvement in the forbearance numbers over the next several months.

“Surging COVID-19 cases caused economic activity to stall in December, with a monthly job loss for the first time since April, and with those jobs mostly concentrated in the leisure and hospitality sector,” Fratantoni said.

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CFPB investigating Rocket Homes for illegal kickbacks

CFPB investigating Rocket Homes for illegal kickbacks
Rocket Homes Real Estate, a real estate affiliate of Rocket Companies, is being investigated by the Consumer Financial Protection Bureau (CFPB) for possibly violating the Real Estate Settlement Procedures Act (RESPA) when it charged fees for referring Quicken’s mortgage clients to real estate agents, according to officials.

Syndicated columnist Lew Sichelman reported Sunday that Dmitry Shkipin of HomeOpenly.com alleged that Rocket Homes was receiving what amounted to illegal kickbacks while violating consumer protection laws, market allocation practices, and antitrust laws.

Shkipin filed a complaint with the Federal Trade Commission, citing RESPA’s bylaw that it is illegal for industry companies to collect money without providing “meaningful” services.

In the lawsuit, Shkipin alleged that a number of lenders operate “paper brokerages” to squeeze fees from real estate agents, which are passed onto the consumer, who pays for poor service.

“Any agent who chooses not to participate in such schemes risks losing ‘free’ business, and such an environment is highly poisonous to a healthy real estate representation market,” Shkipin said, according to Sichelman’s column.

Shkipin claims that under RESPA, referral payments are only permitted when all parties are acting on behalf of brokerages. Shkipin maintains that instead of representing customers and helping them buy and sell homes, Rocket “actively disengages” from those activities so that partner agents won’t compete for the clients.

A response emailed to HousingWire from Rocket Homes claimed the allegations are “egregiously misstated,” and said Shkipin was merely trying to “gain industry relevance.”

“A simple search of his name reveals a history of Shkipin imploring the government to consider legal action against large companies including Amazon, Uber, Lyft, Redfin, Opendoor and others to the benefit of his fledgling startup,” read the statement.

“We have and will continue to cooperate with the CFPB, and are confident they will confirm we are fully complying with applicable law.”

Rocket Homes officials claimed its standard business practices include matching clients with “experienced, vetted, top-performing agents” near them who have demonstrated their ability to provide a positive client experience. Rocket Homes then acts as the concierge for the client, assisting and checking in throughout the home buying process.

“If the assigned agent isn’t a good fit, we will assign a new agent that better meets the client’s needs,” read the statement. “In all respects, Rocket Homes is a fully operational real estate brokerage performing various levels of brokerage services for its many clients.”

This isn’t the first time that Rocket, previously known as Quicken Loans, has been under investigation.

A judge slapped Quicken with an $11 million penalty in 2017 after it found the company guilty of influencing home appraisal values during the time leading up to the financial crisis. Quicken contested the claims, replying in a statement that it was “irrational to conclude that the customary practice in the 2004 to 2009 timeframe – where homeowners willingly provided their estimate of their homes value to the appraiser – could somehow result in a judgment against lenders for damages.”
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How to Reset Your Password on ALTA Website

How to Reset Your Password on ALTA Website
In December, ALTA implemented a new database to manage membership information and purchases. For security purposes, you need to create a new password if you have not done so already.
To reset your password, click here.
You will get a box that looks like this:

You will be prompted to enter your email address so that ALTA can send a link to create your new password.
You will be taken to this page after clicking the link in the email:

You can login and ignore these steps if you already have reset your password.
Please contact ALTA at service@alta.org should you have any questions or need further assistance.
Source: blog.alta.org