In an email sent on Tuesday, loanDepot CEO Frank Martell reminded staffers that in times like these, there are “no easy answers.”
“We must deal with the realities of our market, face the future with determination, and focus on our strengths while addressing our challenges as a team,” he wrote.
To that end, Martell detailed the lender’s progress on its “Vision 2025” plan to “address market-driven realities” and a “longer-term vision that positions us for future growth-oriented success.”
Martell mentioned that loanDepot, which lost $223 million in the second quarter and has laid off more than 4,000 employees since the end of last year, was rolling out a Spanish-language mortgage application, transferring loans from its subservicer to its in-house platform, readying an all-digital HELOC product, and had convened both a “Revenue Council” and a “Quality Council,” among other initiatives.
But he took a bit of time before revealing that loanDepot had temporarily suspended the employee 401K match program effective October. (Martell said the company would revisit the match in the new year when the market had stabilized.)
The company would also be closing several offices around its home base of Orange County, California, as well as in Miami, Nashville and Arizona, Martell said in the email.
“To stay strong, we must take every step available to align our cost structure to current and projected mortgage origination volumes,” Martell wrote. “With mortgage volumes down more than 60% this year, we have had to substantially reduce our costs (staffing, third party/vendor, real state, etc.) accordingly. The company remains committed to treating those impacted in a fair and compassionate way.”
Martell did not mention in the email that several of the company’s top executives would be receiving generous pay raises in the form of higher base salaries and bonuses. A loanDepot spokesperson declined to comment on the executive raises and bonuses.
“Like every other company in our industry, we need to remain very focused on cost management as we navigate expected increases in mortgage rates and the resulting reduction in applications for home loans over the next 12 to 18 months,” Martell said. “We will continue to realize savings through things like natural attrition, business process optimization, and reduced marketing and third-party vendor spending.”
Multiple employees told HousingWire that the combination of the executive pay disclosures and the news of the 401K was tough to stomach.
“The recent SEC filing regarding the pay raises, your article, and the email regarding our 401(k) match being suspended was an absolute kick in the teeth,” one longtime loanDepot staffer said. “Many unhappy folks around here.”
Added another loanDepot employee: “It is hard for any of us to quite understand the logic to the cost-cutting. And where downsizing happens, it seems to just go into other high-cost activities.”