Physical Address

304 North Cardinal St.
Dorchester Center, MA 02124

Does LoanDepot Sell Their Loans?

Before you apply for a mortgage with any lender, it’s good to know some information about the company beforehand. LoanDepot is a nonbank company based in California which focuses on mortgages and other lending products. But does LoanDepot sell their loans?

Does LoanDepot sell their loans? Yes, LoanDepot does sell their loans. This is a common practice among mortgage lenders to regain capital for issuing new loans or to profit while remaining the servicer. For borrowers, this typically only changes the company to which they make payments, with the terms of the mortgage remaining unchanged.

People sitting around a desk

If you are considering getting a home loan from LoanDepot, and the fact that your mortgage could be sold is making you rethink this decision, you shouldn’t worry. It is a common practice in the mortgage market, and it’s a process regulated by federal banking regulations and laws.

Does LoanDepot Sell Their Loans?

LoanDepot is one of the largest mortgage lenders in the United States, providing a wide array of loan products including conforming, jumbo, FHA, VA, and USDA loans. As is common practice in the lending industry, LoanDepot often sells many of the loans they originate on the secondary market to investors like Fannie Mae, Freddie Mac, and Ginnie Mae. By selling off loans, LoanDepot frees up capital in order to originate more new mortgages. The loans are pooled and securitized for sale to these large institutional investors.

For the consumer who originally took out the mortgage, there is very little direct impact when their loan is sold by LoanDepot. The borrower still makes their payments to LoanDepot, who continues servicing the loan even after it has been sold and bundled with other mortgages. The terms and conditions of the loan remain the same. Selling the mortgage simply transfers any risk away from LoanDepot itself.

The main advantages for LoanDepot in selling off most loans is that it provides fresh capital to issue more mortgages to qualified borrowers. It also removes potential long-term risks associated with mortgages from their books by passing them onto the purchasing investor. Overall, the practice represents a prudent business strategy for mortgage originators like LoanDepot. It allows them to keep lending while transferring the long-term servicing and collateral risk to large investors.

LoanDepot Is a California-Based Nonbank Company

LoanDepot isn’t an unknown lender to Americans. In fact, they are the second-largest nonbank holding company that focuses on mortgages. It operates all over the country and provides its renewed clients with different discounts and promotions. One of the best things about this lender is that they offer a wide variety of choices when it comes to different mortgage programs and the overall customer experience.

Two people handing over loan documents

Loan Types and Other Products by LoanDepot

If you take a look at the LoanDepot website, you will see that they offer over 300 different loan products. So, if you need to reverse a reverse mortgage, refinance or take out a home loan for the very first time, you will probably find all those offers with this company. When it comes to major types of mortgages, they offer the following:

  • FHA (Federal Housing Administration) loans,
  • VA (Department of Veterans Affairs) loans,
  • Conventional loans,
  • Jumbo loans,
  • Cash-out refinance loans,
  • Refinance loans,
  • FHA’s 203(k) renovation loans, thanks to which you can finance the purchase and improvements, all with one loan. If your house requires work, you can also use this kind of loan for a remortgage.

Rates and Fees by LoanDepot

The company’s website doesn’t offer an insight into their fees and rates, so it’s not possible to compare them to other lenders at first glance. However, you can easily get in touch with their loan officers, who will work with you to estimate the rates. When you do obtain a rate quote, you should consider the interest rate, average annual rate (APR,) and any costs the lender levies.

You can choose to pay a discount point, also known as a mortgage point, at closing to reduce your interest rate. Some borrowers may find this to be a beneficial option, but you should confirm this before applying for the loan.

What Are Their Requirements for a Loan

Depending on the sort of loan you want to take out, you may need a lower credit score to be approved for a mortgage via loanDepot. For instance, Conventional mortgages demand a minimum score of 620. Your credit score for an FHA loan might be as low as 580. But you may be able to get the greatest mortgage rates if your credit score is better.

Your interest rate can be fixed for a period of time ranging from 15 to 270 days. However, prolonging the lock can be expensive. One-quarter of one percent of the loan debt is the extension cost. For example, if you borrow $200,000, the charge would be $500 per 15 days every time that the lock is extended. No LoanDepot loan has application costs or prepayment penalties, although if a client is more than 15 days behind on a mortgage payment, the lender will assess a late fee.

A loan officer explaining the fees

Pros and Cons of LoanDepot Mortgages

This lender is a great option for any borrower that seeks a digital experience when they are hunting for good loan offers. But you should also consider all the pros and cons of LoanDepot before you decide to work with them.

Refinancing costs for current clients are waivedFees and rates are not displayed online
Uses its Mello Smartloan platform to provide a totally digital process from applications to closingThey don’t offer USDA loans
Has more than 200 locations nationwide

Reach Out to LoanDepot and Inquire About Their Programs

If you’re looking for a mortgage, LoanDepot is a great option to consider. They offer a variety of loan products, and their team of experts can help you find the right one for your needs. However, keep in mind that it’s best to reach out to their loan officers if you want to compare their rates and fees to other lenders.

If you already have a mortgage on land (or any other home loan) via LoanDepot, and you’ve got notified that it has been sold, you shouldn’t worry about it. The terms and conditions you agreed to when you signed the deal remain the same. The only difference is that you will make payments to another servicer.

Frequently Asked Questions(FAQ)

Do any mortgage lenders not sell their loans?

Yes, some mortgage lenders do not sell their loans. For example, portfolio lenders keep their loans in-house and do not sell them on the secondary mortgage market. These lenders have their own set of criteria for loan approval and may offer more flexible terms than traditional lenders. They may also provide more personalized service to borrowers.

What is going on with loanDepot?

loanDepot is a leading financial services provider that recently hired a new CEO, Anthony Hsieh, to lead the company. Hsieh is a seasoned executive with experience in the banking and financial services industries, and he is expected to help loanDepot expand its reach and offerings in the coming years. With a focus on customer experience and innovation, loanDepot is positioned to become a major player in the financial services industry.

Do mortgage companies always sell their loans?

No, mortgage companies do not always sell their loans. Mortgage companies typically originate loans and then sell them to investors, such as government-sponsored entities like Fannie Mae and Freddie Mac, or to banks and other financial institutions. This allows the mortgage company to free up capital to originate more loans. In some cases, mortgage companies may keep loans in their own portfolio and service them on their own.

Why did they sell my loan?

In February 2019, the loan servicing company, Cenlar FSB, sold the loan of a New Mexico resident to Nationstar Mortgage, LLC. The sale was part of a larger effort by Cenlar to transition its servicing portfolio to Nationstar. The transition was done to increase efficiency and reduce costs for Cenlar, as Nationstar is a larger company with more resources and expertise. The sale was also meant to provide better customer service to the loan holders, as Nationstar has a larger customer service team and more specialized technology.