LoanDepot turns to humans for fintech's latest real estate push

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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, 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% 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 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.

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