loanDepot launches fully automated underwriting engine

California-based mortgage lender loanDepot on Tuesday announced the launch of its fully automated underwriting engine called melloNow.

The new system, which has been in beta-testing for the last several quarters, delivers a fully conditional loan approval “in minutes rather than hours or days,” the company said in a statement.  

Jeff Walsh, loanDepot’s mortgage president, said in a statement that the new underwriting engine allows the company to bypass “the delays and friction points typical of traditional loan evaluation and approval processes while improving overall loan quality.”

melloNow, through its digital verification process, quickly analyzes credit reports, detects frauds and validates income and employment data at the point of sale. Ultimately, the engine generates instantaneous borrower conditions. 

According to the company, both the loan officer and the customer understand exactly what’s needed to assemble the required paperwork quickly and efficiently. “The engine provides real-time conditional approval for a “large segment of loans,” the lender said.

loanDepot, a top 15 U.S. mortgage lender, originated $6.1 billion in the third quarter, with purchase loans comprising 71% of the total, per filings with the Securities and Exchange Commission (SEC). 

According to its executives, the company is hoping to achieve profitability in the spring selling season via cost reductions and automation, among other initiatives.  

loanDepot’s CEO Frank Martell anticipated in an exclusive sit-down interview during HousingWire Annual in early October that a new generation of its underwriting system was coming out before the end of this year.

“The mello technology is a calling card. When I recruit people and talk to people in the industry, the perception of our technology is that it’s top-notch, which is true. Our point-of-sale platform, our underwriting decisioning . . . it’s really good. We have a new generation coming out before the end of this year,” Martell said. 

Viviana Abarca, loanDepot’s executive vice president of lending operations, said in a statement the underwriting engine is part of the strategy to deliver “a best-in-class customer experience throughout the entire loan journey,” from the firm’s initial contact with a prospective borrower to the long-term servicing of the funded loan.

Earlier this year, HousingWire reported that loanDepot started moving some of its backend operations to Black Knight‘s cloud-based version of the Empower loan origination system as the firm continues its efforts to cut costs.