Anthony Hsieh founded loanDepot eight years ago, in the depths of the recession. Since then, he’s grown the company to the second-largest nonbank consumer lender in the country.
LoanDepot entered what Hsieh called the “iPhone 2” phase of the company this week when it celebrated the launch of a Silicon-Valley style headquarters in Irvine, California, for its digital lending brand mello (Hsieh relishes publicly comparing loanDepot to Apple and other well-known tech giants, and wants his company to be thought of as equally innovative).
After marking that milestone, Hsieh, a serial entrepreneur with decades of experience in mortgages and lending, talked to Inman over the phone about competition in lending and what’s next for loanDepot.
There’s been news recently about Amazon moving into mortgages. Is that threatening for loanDepot?
Those guys are extraordinarily smart, but to build a scaled mortgage company post-financial crisis has been tried by lots of other smart folks that have not done so well. That’s not to say Amazon won’t succeed, but it’s going to take them an amount of time before they figure out the special sauce in our industry.
For Amazon, just the fact that they have so much scale and own so many eyeballs and customers, mortgages are not a new business for them — it’s more a product offering for them. But the fulfillment piece of the product offering is going to take some time. We certainly welcome any new entrants in the marketplace. We think it’s healthy.
Everybody is trying to build a mortgage company. SoFi and others are discovering it’s not as easy as they think it is.
How are you making mortgages easy and appealing to millennials and other young people?
I’ve told my management team from the very start, there’s no doubt millennials are natives to the digital world instead of immigrants. They’ve very comfortable with the smartphone because they didn’t migrate from desktop to laptop to mobile. But just because you’re mobile-friendly or a digital native doesn’t mean you understand APR, title and other financial terms.
The market 10 years ago assumed just because someone knows how to turn on a smartphone, they understand financial terms. We actually see millennials tapping on our expert loan officers more often than older generations who may not be as savvy on mobile but understand financial terms.
What percentage of total consumer lending would you like loanDepot to be servicing in five or 10 years?
You’re going to see mortgages, consumer lending, real estate and other homeowner services consolidate. There’s going to be a bit more feel of digital dominance. The top three to five digital players will own a massive piece of the market.
Analog world industries are a lot more fragmented than the digital world. Right now the market share between number one and number two is going to continue to increase. I can see it easily going [from less than 10 percent] to 20 to 25 percent between us and Quicken Loans.
How are you staying on top of what millennials and the next generation, Gen Z, need and want in lending and housing?
It’s really Uber-izing our company. We’ve got to build the proper digital pipe and plumbing that matches up with supply and demand: convenience in product and services, buying, selling, repairing, upgrading to solar, refinancing. Those are all spokes in homeowners’ wheels. Traditionally, every one of those spokes has belonged to separate categories. As we become modern and digital, consumers are not going to want different brands. They want one brand experience. That’s where the industry is going.
What should real estate agents know about loanDepot and mello Home, your home services brand, and why should they trust and work with you?
Whether it’s a real estate agent, a mortgage broker, a contractor or a solar installer, we all have to understand that finding a customer is one of the most costly, hardest things to do. Because of our scale — our brand is generating 1 million homeowner leads every month now — we can be fantastic partners. We’re Uber-izing the homeowner space to match the rider to the driver.
What are the biggest challenges facing loanDepot in rebranding as a tech company?
The most challenging for us is the fact that we’re in an industry that’s changing so fast we have to have a dual personality, almost a triple personality. We have to be responsible to make sure the core health of the business is there. We have customers to serve. We also have to innovate. Innovating is just hard, particularly when you have a business that’s producing revenue and profits.
We’ve seen HomeAdvisor and Zillow become powerful as digital middlemen. Customers want convenience and the brand experience. They don’t want to go around that to the traditional service provider. They trust the brand, they trust the experience, and we have to figure that out.
This interview has been edited and condensed.