Yesterday, a New York Times article, “Mortgage Lender Cut Corners in Echo of 2008 Crisis, Ex-Executive Says,” highlighted claims of reckless behavior by loanDepot, Inc. CEO Anthony Hsieh and other top executives. Allegations by the Company’s former Chief Operating Officer, Tammy Richards, alleged rule-breaking and failures in loanDepot’s underwriting process to increase sales and take on riskier loans reminiscent of problems that fueled the 2008 mortgage crisis.
The Company had its initial public offering in February 2021 at a price of $14 per share. Ms. Richard’s lawsuit against the Company alleges that the planned IPO was the motive for the Company’s executives to cover up the CEO’s reckless behavior and that top executives received special one-time cash bonuses worth millions of dollars before the Company went public.
loanDepot's stock has dropped to almost $7 per share; almost 50% below the February 2021 IPO price of $14 per share