loanDepot‘s CEO and president Frank Martell said the mortgage market will remain challenging in 2024. Still, the company is working to make money and, when the market turns, accelerate growth in a profitable, sustainable way.
To get there, Martell said loanDepot is still committed to its Vision 2025 plan, announced three months following his arrival to the company last year. But it was built to have a “little bit of wiggle room” to adjust to market conditions and opportunities for tomorrow.
Martel spoke during the HW Annual Conference held from Oct. 4-7 in Austin, Texas.
“We put in place a Vision 2025 program, which looked at where we want to take the company as we go through this cycle and then come out the other end as a stronger, better and more successful company,” Martell said.
“The market has changed a lot. It has been laid down about five times since I joined the company, and you have to react to that and adjust to that. So, the Vision 2025 was built to have a little bit of wiggle room to adjust it. It’s about addressing and resetting for today’s reality, but also looking at what are the opportunities out there for tomorrow.”
loanDepot hired Martell in April 2022, three months after he retired from CoreLogic. He announced the Vision 2025 plan in July 2022, which included simplifying the organizational structure, focusing on client service, quality, automation and operating leverage.
The target was to reach $375 million to $400 million in annualized cost reductions by the end of 2022 and run-rate operating profitability exiting 2022. loanDepot has been able to narrow its losses. In Q2 2023, the lender recorded a loss of $34.3 million in non-GAAP adjusted net income, compared to a $60.2 million loss in the previous quarter.
“We are still likely to face a tough market in 2024. But I’m feeling pretty good about rebounding into the spring selling season. And so, we’re working to make money in this market. And then, as the cycle turns, to build the company and accelerate growth in a profitable, sustainable way.”
Running a public company, Martell said that amid a challenging mortgage market, “the most important thing is not to try to play with stock price.”
loanDepot’s stock closed at $1.47 on Wednesday.
“Investors have a view of this sector in general; every company has a low valuation, and certainly in mortgages,” Martell said. “And there are some winners currently in the housing market that are doing better (…). What people are looking at is the companies that are going to come through as winners.”
Martell said loanDepot is investing in fundamental, underlying systems and looking at the point-of-sale technology. As the mortgage market discusses topics such as first-time homebuyers, affordability and the new generations of borrowers, lenders must develop different solutions and interfaces.
“We have a lot of investment going into how we interact with them, make them successful homeowners, and make the experience a little less painful and more productive.”