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LoanDepot launches JV with another homebuilder

Schell Brothers has partnered with retail lender to create Henlopen Mortgage

LoanDepot, the nation’s second-largest nonbank retail mortgage lender, struck up a joint-venture with Schell Brothers, a homebuilder based in Delaware.

The venture is to be called Henlopen Mortgage, the firms said in a statement this week.

Through the JV, Schell Brothers, which builds energy-efficient homes along the beaches of Delaware and in Virginia, will have access to loanDepot’s “mello” lending platform.

“Henlopen Mortgage helps homebuyers achieve their dream of homeownership in a seamless and pleasing way,” said Mark Jones, who will lead Henlopen Mortgage as vice president of regional production. “Whether it’s their first home purchase or their 50th, we’re here to ensure that their experience is exceptional in every way.”

The builder JV is at least the second one loanDepot has struck up in recent years. In 2018, loanDepot partnered with AV Homes on a similar JV. It also has JVs with homebuilders Meritage Homes, Michael Saunders & Co, Tripointe Homes, Polygon Northwest Homes, LGI Homes and Brookfield Residential.

Lenders have been keen to sign joint-ventures with homebuilders in recent years. Guaranteed Rate acquired Stearns Lending partially because of its joint-ventures, including one with KB Homes, one of the country’s largest homebuilders.

For their part, Homebuilders are having no trouble selling their product. But building it is another matter. Demand is at its highest point since 2006, though homebuilders have been stymied by labor shortages, soaring lumber prices and widespread supply chain delays.

LoanDepot has had an eventful week. The retail lender sold $600 million in junk bonds at a 6.125% coupon. The sale will allow loanDepot to refinance debt and pay its shareholders a $200 million special dividend. Bloomberg reported profit was $100 million higher than expected.

Like most lenders, loanDepot, a powerhouse in consumer-direct, had its best year ever in 2020. It originated over $100 billion and grew revenue to $4.3 billion. The company, led by Anthony Hsieh, went public earlier this year. As of Wednesday, it had a market cap of just over $6 billion and was trading at $19.81.

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