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The changing of the guard continues at loanDepot, with CEO Frank Martell bringing in his former CoreLogic colleague David Hayes as chief financial officer and showing four executives hired by his predecessor to the door.
Martell, who led CoreLogic before succeeding loanDepot founder Anthony Hsieh as CEO last year, joined the company as rising mortgage rates were taking a devastating toll on loanDepot’s profitable refinancing business.
Having trimmed more than 6,400 workers from the company’s payroll since the beginning of last year, loanDepot is now streamlining its management ranks, announcing Friday that it will part ways with CFO Patrick Flanagan, Chief Accounting Officer Nicole Carrillo and Chief Human Resources Officer Kevin Tackaberry.
Also departing is Zeenat Sidi, a veteran of SoFi, Capital One and RBC who Hsieh hired 15 months ago to expand loanDepot’s business beyond mortgages as president and chief operating officer of a new operating unit, mello.
In addition to cutting thousands of employees from the loanDepot’s payroll and shutting down the company’s wholesale division, Martell has been tasked with implementing Vision 2025, a strategic plan to grow loanDepot’s purchase loan business and loan servicing portfolio.
Hayes, 48, “is a consummate professional with significant financial leadership experience in our sector, and I look forward to partnering with him as we continue to execute our Vision 2025 plan,” Martell said in a statement.
“As we continue to advance our Vision 2025 plan, we expect to drive automation and operating leverage and invest in customer-facing tools and solutions, as well as implement operational and structural changes to optimize and streamline our business and position loanDepot for long-term growth and success,” Martell said.
Hayes, who will also serve as loanDepot’s principal accounting officer when he joins the company on June 26, will earn a base salary of $500,000 and up to twice that in bonuses under the terms of a three-year employment agreement. He’ll also be eligible for up to $1.65 million in annual stock awards.
The management changes were announced Friday after the close of trading. Shares in loanDepot, which have changed hands for as little as $1.25 and as much as $3.02 over the last 52 weeks, fell 1 percent Monday to close at $1.89.
LoanDepot had previously announced on May 30 that mortgage executive Alec Hanson had been promoted to lead “a consolidated marketing team” as chief marketing officer and to oversee the company’s originator-led field-level marketing.
“I’ve been a part of the loanDepot story for more than a decade now in a variety of roles,” Hanson said in a statement. “This is a phenomenal company, made up of extraordinary people, with an incredible consumer brand built by industry leaders. I’m thrilled to be able to bring my sales-centric mindset and background into this role to further transform our marketing ecosystem both digitally and locally in the communities we serve.”
In April, Hsieh reached an agreement with loanDepot’s board of directors to appoint WFG CEO Steve Ozonian to the company’s board, ending a proxy fight that broke out in February after Hsieh was ousted as the company’s executive chairman.
LoanDepot mortgage originations hit another new low
Source: loanDepot Securities and Exchange Commission filings
After racking up a $610 million 2022 net loss, LoanDepot has continued to struggle. The Irvine, California-based lender has seen loan production decline for eight consecutive quarters since hitting an all-time high of $41.48 billion in the first quarter of 2021 (Q1) when the company went public.
LoanDepot posted a $91.7 million first-quarter net loss as loan originations fell 77 percent from a year ago to $4.94 billion — a new low in records dating to 2019.
As was the case for the industry as a whole, loanDepot saw refinancings plummet as mortgage rates soared last year. The $1.43 billion in mortgages refinanced by loanDepot during the first three months of 2023 represented an 89 percent drop from the same period a year ago.
But loanDepot’s purchase loan volume also declined more sharply than the industry as a whole, falling 56 percent from a year ago to $3.51 billion.
Lenders saw their Q1 2023 purchase mortgage volume decline by 30 percent from the same period a year ago to $267 billion, while refinancing dropped by 79 percent to $66 billion, according to the Mortgage Bankers Association.
On the company’s May 9 earnings call, Martell told investment analysts that after trimming $500 million in annual expenses last year and preserving a “sizable cash balance” of $798 million as of March 31, “we believe we are positioned to continue to invest in our people, our platforms and processes and benefit from the expected reductions in industry capacity.”
After trimming more than 6,000 workers from the payroll last year, loanDepot shed about 400 additional positions during the first three months of this year. Having begun 2022 with 11,300 employees, loanDepot eliminated 6,466 positions over the next 15 months, leaving the company with 4,834 workers as of March 31.
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