LoanDepot moves $225M out of Signature Bank after collapse

LoanDepot, a mortgage lender based in Irvine, moved $225 million of its cash out of Signature Bank on Monday, after the New York-based financial institution was shut down over the weekend and transferred under the control of the Federal Deposit Insurance Corp. 

The firm moved its corporate cash balances to a “large money center bank,” according to a Wednesday filing with the Securities & Exchange Commission. 

LoanDepot is one of Signature Bank’s many real estate customers that have struggled to figure out where to put their cash and how to do business after Signature’s shutdown. 

LoanDepot also disclosed it holds a $300 million mortgage servicing rights facility with Signature, and a $300 million warehouse facility that Signature holds a 50 percent interest in. 

The mortgage servicing rights facility allows Signature to administer mortgages on behalf of LoanDepot, collecting monthly mortgage payments, handling taxes and insurance premiums and forwarding payments to LoanDepot. 

A warehouse facility helps LoanDepot finance a mortgage in the first place. 

LoanDepot said it will “continue to have full access to these facilities,” which expire at the end of this year, according to the filing. 

On Sunday, the FDIC transferred all of Signature Bank’s assets to a new bridge bank, which will continue to operate as a full-service bank until the FDIC sells it off. 

Depositors and borrowers “will continue to have uninterrupted customer service,” the FDIC said in a statement on Sunday, adding that only depositors, such as LoanDepot, would be fully protected. 

“Shareholders and certain unsecured debt holders will not be protected,” the FDIC said, declining to further explain what it would classify as an unsecured debt holder. 

LoanDepot added that it had no exposure to Silicon Valley Bank, which was shuttered by California regulators last Friday after depositors rushed to cash out following the company’s disclosure it had lost $1.8 billion on bonds. 

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