loanDepot Pioneers Next Era of Fintech by Expanding mello Brand into New Real Estate & Home Improvement Business Lines
New Ventures Simplify Home Buying & Owning by Connecting Pre-Approved Loan Customers to Verified Local Real Estate and Home Improvement Pros
IRVINE, Calif., Jan. 23, 2018 – LD Holdings Group, LLC, parent company of loanDepot, the nation’s second largest non-bank consumer lender, today announced continued expansion beyond its profitable mortgage and personal loan businesses. In Q1, a newly formed venture, mellohome, will connect pre-approved homebuyers with verified real estate agents in their local market, and help consumers find and hire home improvement and other pros.
mellohome is the first mello-branded business line following the company’s March 2017 launch of mello™, a proprietary financial technology ecosystem supported by 450+ tech team members.
“We first created the mello™ brand as a name for our proprietary technology platform which redefines fintech from simply streamlining the loan process to a blended digital/local relationship covering all aspects of consumer lending and homeownership,” said Anthony Hsieh, Founder and CEO of loanDepot. “Now we are expanding the mello brand.”
When launched, mello™ enabled three foundational strategies: (1) consumers can run any mortgage or nonmortgage loan from application through funding from any device on their own or alongside local loan consultants who can advise and co-pilot throughout the process, (2) loan consultants licensed in all 50 states can seamlessly respond and advise in real time to the millions of consumers the company sources digitally, and (3) analytics on customers’ evolving needs throughout their home buying and owning lifecycle.
Today’s launch of mellohome builds on this foundation by adding local real estate agents nationwide to the platform. Consumers have come to trust and expect single brands for most of their needs in areas like retail, and the mello brand will meet the same consumer expectation1 for most of their needs in housing.
“As America’s digital marketing leader in the homeownership space, we spend hundreds of millions of dollars to connect with homebuying consumers each year, and increasingly, these home shoppers are not yet working with a real estate agent,“ said Hsieh. “mellohome unleashes our digital marketing power to real estate agents by connecting them with homebuyers who’ve been pre-approved by loanDepot’s local loan consultants and are ready to shop and close with a local real estate agent.”
mellohome’s service is free for consumers, and helps real estate agents grow business more efficiently. Typically agents buy home purchase leads up front and spend months working with customers who might never buy a home with them. mellohome gives agents ready-to-transact customers who’ve received credit and digital underwriting pre-approvals from experienced local loanDepot loan consultants, and have requested to be connected with a local real estate agent to start the process of purchasing a home. Agents pay no up-front fees to join the mellohome network or to be connected with ready-to-transact clients, and they agree to a pay a fee to mellohome on closed transactions.
New mellohome Improvement Venture
“Because all real estate is local, not all housing disruption is digital,” said Hsieh. “It’s about matching home buyers and owners with trusted local pros and relevant services throughout their homeownership journey. mello’s proprietary technology and local teams serve the trend2 of Americans researching real estate services online and closing with local pros.”
As this digital/local trend matures in housing, the company will launch new mello businesses.
Later this year, the company will launch a home improvement business to meet increasing demand3 for home repairs and upgrades.
The mello home improvement business will serve two primary functions: (1) immediate approval of home improvement loans up to $75,000 and seamless introduction to verified contractors, and (2) contractors can use mello technology and proprietary digital underwriting to offer financing at their point of sale, so when they propose a project to a homeowner, they can offer financing in real time.
For homeowners, mello lets them begin with a contractor first or financing first, then finish home improvements fast. For contractors, mello gives them point-of-sale financing and brings them more project-ready customers who’ve been pre-approved by loanDepot loan officers.
About loanDepot and mellohome
loanDepot is the nation’s second-largest non-bank consumer lender, focusing on home, personal and home equity loans with more than 1,700 licensed loan officers holding 14,000+ licenses and local lending stores nationwide. In 2017 loanDepot surpassed $125 billion in funding since inception in January 2010. In partnership with loanDepot, mellohome matches real estate agents and other home services pros with ready-to-transact customers.
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1Most Homeowners Confused By Too Many Home Vendors, Want Single Brand
- 97% of U.S homeowners are frustrated working with multiple vendors during the home ownership experience
- 96% of homeowners were not fully confident in choosing the best vendor for their home ownership needs
- 81% found mortgage lenders recommending realtors to assist with home purchases valuable
- 97% expressed appeal in the concept of a trusted/branded network of vendors to choose from for home ownership needs.
- SOURCE: loanDepot/Drive Research survey completed with a sample of over 1,000 homeowners in the U.S. from January 10 through January 12, 2018. Results from the online panel are nationally representative and statistically reliable.
2Search Home Services Online, Close With Humans
- When shopping for a mortgage, consumers told Fannie Mae their three top sources of information were online (69%), mortgage lenders (75%), and real estate agents (77%).
- NAR reports that 56% of home buyers found their home online, but 88% used an agent to buy and close on the home.
3Increasing Demand For Home Improvement
- According to Zillow and the National Association of Homebuilders, the average homeowner spends $4,000 to $6,000 per year on home repairs and upgrades, over half of homebuyers in 2016 purchased homes that needed improvements, and 83% of sellers make improvements before selling.
loanDepot & mellohome Contact:
Consumer Experience Manager
LoanDepot Turns to Humans for Fintech's Latest Real Estate Push
(Bloomberg) -- LoanDepot Inc., a mortgage lender basing its growth around digital applications, isn’t giving up on humans’ role in the home-buying process just yet.
The lender’s parent, LD Holdings LLC, said it is working on a service to connect pre-approved borrowers with local real estate agents. It will add contractors later this year after finding that consumers are increasingly looking to consolidate the home-buying process in the hands of a few trusted partners, said Anthony Hsieh, founder and chief executive officer.
“Customers want more services and products under one brand,” Hsieh said. “They no longer want to think in different compartments. This is just the very start in that direction.”
LoanDepot is betting that it can capitalize on the ease of use that’s helped it climb the ranks of the largest U.S. home lenders. It’s also an acknowledgment that clients are once again open to working with a vertically integrated firm a decade after banks with affiliated appraisers and title companies earned a bad name in the financial crisis.
The firm will sign up local real estate agents after vetting them in a process that resembles the way Uber Technologies Inc. manages drivers, Hsieh said. The service is free to consumers, while the agents pay a fee once transactions close.
LoanDepot offers a technology platform that provides a fully digitized mortgage loan application, and has loan officers covering 70 percent of the U.S. That approach is in some ways distinct from that of other online lenders, such as LendingClub Corp. or Goldman Sachs Group Inc., which talk up the advantages of having no on-the-ground presence.
“Digital disruption will not replace expert local coverage,” said Hsieh, who was previously president of LendingTree.com and founder of two other internet mortgage companies. “Local business has a way to complement the digital experience.”
LoanDepot has originated more than $125 billion since 2010, according to the company’s website, and Hsieh said it’s been profitable for six of eight years. The firm ranked 10th among U.S. mortgage lenders in the third quarter of 2017, according to data compiled by Bloomberg Intelligence. The company has also tried its hand at unsecured personal loans.
The closely held firm, backed by private equity firm Parthenon Capital Partners, pulled its initial public offering in 2015 just hours before pricing, with Hsieh later citing market conditions. The company had targeted a market value of $2.4 billion to $2.6 billion.