By Lisa Lee and Davide Scigliuzzo | Bloomberg
When Lake Forest-based LoanDepot debuted on the New York Stock Exchange earlier this year, Anthony Hsieh became a rarity among the ultra-rich: an Asian-American multi-billionaire.
For the 56-year-old, this was the culmination of a decade-long search for the highly competitive mortgage industry. It has also given him a fresh boost to be more visible and inspire others by drawing on some of his own struggles as an immigrant from Taiwan to the US.
“I have a unique opportunity,” said Hsieh. “Through my success, I have effectively earned and earned the respect of non-Asians, and that makes Asians very proud.”
His seat at the helm is a long way from a Sunday afternoon 42 years ago when a masked man broke into his family’s liquor store in Long Beach, pointed a gun at his head, and asked him to empty the register.
Those hectic minutes spent dreading for his life gave Hsieh one of the most important lessons of his career. He credits his experience for helping him face the discrimination and hostility he would later encounter as an Asian American breaking into the financial industry, and which ultimately helped him become one of the largest mortgage lenders in the United States to lead
“You learn early on about self-protection and survival,” said Hsieh, who was subjected to two more armed robberies while working behind the family’s till. “I wouldn’t trade it for anything.”
His parents settled in California after moving out of Taiwan with Hsieh and his two sisters in the early 1970s and giving up a comfortable life to raise their children in the United States. His father started out as a grill chef before saving enough to start his own business.
Since they did not speak English, Hsieh helped with all of the family’s major financial decisions, from buying cars and appliances to taking out a mortgage.
“I’ve been protecting my parents since I was eight,” he said. “I became their advisor, I became their loan officer, I became their translator.”
It was this upbringing, he says, that gave him the resilience and determination it took to compete with some of the biggest banks on Wall Street in one of the breakneck corners of the financial world.
Hsieh’s net worth is now about $ 2 billion, according to the Bloomberg Billionaires Index. He is one of the few East Asian Americans who have turned U.S. companies they founded into multibillion-dollar businesses, alongside Eric Yuan of Zoom Video Communications Inc. and Jensen Huang of Nvidia Corp.
Unlike many billionaires who made their fortune in Silicon Valley after graduating from elite U.S. colleges, Hsieh Cal State attended Fullerton and was quite a long way from the upper echelons of tech.
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In fact, his jump into finance was largely accidental.
His parents had hoped he would become a doctor, but since their son was afraid of blood, they were willing to settle for a dentist. Instead, Hsieh took the advice of one of his baseball teammates and applied for a job as a loan officer with a small mortgage lender. He was hired on site.
After just four years with the company, Hsieh realized that the company had more potential than its owners could see. So he turned to her with an offer to buy the entire company. Once at the top, he dropped typewriters and fax machines, aggressively expanded online, and renamed the company LoansDirect.com.
“I just felt like I could do better,” said Hsieh. “I didn’t know what my skills were, I just felt confident, I felt competitive. I had a great work ethic. “
It was the beginning of a series of endeavors that would make Hsieh one of the most successful entrepreneurs in the highly competitive mortgage industry. After the sale of LoansDirect.com to E * Trade Financial Corp. in 2001 he founded HomeLoanCenter.com, the first online platform offering a full range of mortgage products in all 50 states. When he sold it to LendingTree in 2004, the company employed 800 people.
But Hsieh has reaped most of his fortune from LoanDepot. The company had its best year on record in 2020, when the Federal Reserve cut interest rates to near zero in response to the coronavirus outbreak and made mortgage loans one of the pandemic’s biggest winners.
LoanDepot’s digital-first approach made it one of the fastest growing home loan providers in the US. With over $ 100 billion in borrowing, it was the seventh largest mortgage lender in the country in 2020 and the second largest to go direct to consumers.
In February, the company completed a long-awaited IPO. While the listing only brought in around $ 62 million – a fraction of the initial target – about a month later, another $ 200 million was paid out to shareholders, including Hsieh and his co-investors, through a debt-financed dividend.
The question is can such rapid growth be sustained?
LoanDepot’s shares have fallen more than halfway from peaking shortly after being listed. The outlook for mortgages has now clouded over, as Fannie Mae says only 35% of consumers think it’s a good time to buy a home, and rising inflation risks could further dampen sentiment amid possible price hikes and interest rate hikes. Housing construction has slowed, as has the sale of existing properties and refinancing.
Hsieh has now turned to millennials, many of whom are buying their first homes. While most are used to doing business online, that familiarity doesn’t necessarily mean a better understanding of interest rates or closing costs.
“They are very adept at using digital tools, but that doesn’t make them financially literate,” he said.