LoanDepot and its broker matching subsidiary mellohome offer cash discounts of up to US $ 7,000 on bundled services when customers buy and sell with a mellohome preferred real estate agent, finance with LoanDepot and opt for the company’s title insurance.
The “Grand Slam Package” from leaseDepot, an allusion to the company’s sponsorship deals with Major League Baseball and the Florida Marlins, will be available nationwide from October 1st – just in time for the 2021 World Series. LoanDepot will also be the Be the “Presenting Sponsor” of the MLB American and National League Championship Series.
LoanDepot “is more than a mortgage lender,” CEO Anthony Hsieh said in a statement. “We are a digital retail company committed to serving our customers throughout the home journey.”
The California-based lender has three ancillary businesses:
- Mello Home Services LLC, a proprietary real estate referral business that launched in 2018
- LD Settlement Services LLC, LoanDepot’s proprietary and fiduciary business, which the company acquired in 2016
- MelloInsurance Services LLC, a proprietary insurance program launched in the third quarter of 2020 to sell homeowners and other insurance
The cash discount of up to US $ 7,000 is available to customers who both buy and sell from a mellohome agent and choose to use bundled services. The amount of the discount depends on the purchase or sale price of the home. To receive the full $ 7,000, purchases and sales must be at least $ 500,000. The discount is $ 5,000 for purchases and sales of $ 200,000 to $ 499,999, or $ 3,000 for sales of $ 199,999 and below.
Buyers who use a mellohome preferred real estate agent and finance it through LoanDepot can receive discounts of up to USD 3,500, as can sellers who advertise with a mellohome agent. The discounts are not available in Alabama, Alaska, Iowa, Kansas, Louisiana, Mississippi, Missouri, Oklahoma, Oregon, and Tennessee.
The Real Estate Settlement Procedures Act (RESPA) regulates business recommendations “in connection with, or part of, federal mortgage loan settlement services”.
Kickbacks for referrals are illegal, but affiliate mortgage lenders and trusts are allowed to sell “a package of billing services at a discount,” according to the Consumer Financial Protection Bureau, which enforces RESPA, on its website. Consumers cannot be required to purchase bundled services, and each company must provide these services separately.
“A large part of our purchase-oriented customer contacts have not yet selected a broker, which gives us the opportunity to offer a more integrated customer service between the two main functions of home buying and generate additional income in a RESPA-compliant manner”, stated LoanDepot in his most recent Annual report to investors.
LoanDepot, which went public in February, was the fourth largest mortgage lender in the country last year, as filed with federal regulators and analyzed by iEmergent. Like many lenders, LoanDepot had a booming refinancing business as existing homeowners took advantage of the lower interest rates brought about by the Federal Reserve’s ongoing bond purchases launched during the pandemic.
That trend has continued this year, with refinancing accounting for 81 percent of the $ 41.5 billion in loans the company extended in the first quarter of 2021, the company said in its latest quarterly report to investors . While purchase credit rose 80 percent to $ 7.9 billion in the first three months of the year, refinancing rose 211 percent to $ 33.6 billion.
To strengthen its purchase credit business, LoanDepot has set up joint ventures with home builders LGI Homes, Schell Brothers and Brookfield Residential in recent months and announced a joint venture with Farm Bureau Bank last month.
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