loanDepot, Inc 10-Q for FY2025 Q1
loanDepot, Inc. (LDI)
10-Q
2025-05-08
For: 2025-03-31
View Original
Added on
April 09, 2026
About this 10-Q
loanDepot, Inc filed this 10-Q on May 8, 2025, covering the quarter ended March 31, 2025 (FY2025 Q1).
Headline figures
Quarter ended March 31, 2025, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $273.62M
- up 22.8% from $222.79M a year earlier
- Net loss
- $21.9M
- compared with a net loss of $34.26M a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For the quarterly period ended March 31, 2025
OR
| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For the transition period from _____to _____
Commission File Number: 001-40003
(Exact Name of Registrant as Specified in Its Charter)
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |||||||||||||
| (Address of principal executive offices) | (Zip Code) | |||||||||||||
Registrant’s telephone number, including area code: (888) 337-6888
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol | Name of each exchange on which registered | ||||||||||||
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | ☐ | ☒ | ||||||||||||||||||
| Non-accelerated filer | ☐ | Smaller reporting company | ||||||||||||||||||
| Emerging growth company | ||||||||||||||||||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
As of May 5, 2025, 111,009,806 shares of the registrant’s Class A common stock, par value $0.001 per share, were outstanding. No shares of registrant’s Class B common stock were outstanding, 121,874,057 shares of registrant’s Class C common stock were outstanding and 97,026,671 shares of registrant’s Class D common stock were outstanding.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This report contains forward-looking statements that are based on our management’s beliefs and assumptions and on information currently available to our management. These forward-looking statements can be identified by the fact that they do not relate strictly to historical or current facts and may contain the words “believe,” “anticipate,” “expect,” “intend,” “plan,” “predict,” “estimate,” “project,” “will be,” “will continue,” “will likely result,” or other similar words and phrases or future or conditional verbs such as “will,” “may,” “might,” “should,” “would,” or “could” and the negatives of those terms. Examples of forward-looking statements include, but are not limited to: information concerning our possible or assumed future results of operations, business strategies, Project North Star plans and benefits, technology developments, financing and investment plans, financial condition and liquidity, dividend policy, competitive position, industry and regulatory environment, potential growth opportunities, effects of competition, operational efficiencies, and impact of the cybersecurity incident that occurred in the first quarter of 2024.
Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Given these uncertainties, you should not place undue reliance on forward-looking statements. Also, forward-looking statements represent our management’s beliefs and assumptions only as of the date of this report. You should read this report with the understanding that our actual future results may be materially different from what we expect.
Important factors that could cause actual results to differ materially from our expectations are included in Part I, Item 2 “Management's Discussion and Analysis of Financial Condition and Results of Operations” in this report as well as Part I, Item 1A “Risk Factors” and Part II, Item 7 “Management's Discussion and Analysis of Financial Condition and Results of Operations” in our annual report on Form 10-K for the year ended December 31, 2024 filed with the Securities and Exchange Commission (“SEC”) on March 13, 2025.
Except as required by law, we assume no obligation to update these forward-looking statements, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future.
loanDepot, Inc.
Table of Contents
| PART 1. FINANCIAL INFORMATION | |||||
| Item 1. Financial Statements | |||||
Consolidated Balance Sheets as of March 31, 2025 and December 31, 2024 | |||||
Consolidated Statements of Operations for the three months ended March 31, 2025 and 2024 | |||||
Consolidated Statements of Equity for the three months ended March 31, 2025 and 2024 | |||||
Consolidated Statements of Cash Flows for the three months ended March 31, 2025 and 2024 | |||||
| Notes to Consolidated Financial Statements | |||||
| Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations | |||||
| Item 3. Quantitative and Qualitative Disclosures About Market Risk | |||||
| Item 4. Controls and Procedures | |||||
| PART II. OTHER INFORMATION | |||||
| Item 1. Legal Proceedings | |||||
| Item 1A. Risk Factors | |||||
| Item 2. Unregistered Sales of Equity Securities and Use of Proceeds | |||||
| Item 3. Defaults Upon Senior Securities | |||||
| Item 4. Mine Safety Disclosures | |||||
| Item 5. Other Information | |||||
| Item 6. Exhibits | |||||
| Signatures | |||||
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
loanDepot, Inc.
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
| March 31, 2025 | December 31, 2024 | ||||||||||
| ASSETS | (Unaudited) | ||||||||||
| Cash and cash equivalents | $ | $ | |||||||||
| Restricted cash | |||||||||||
Loans held for sale, at fair value (includes $ | |||||||||||
Loans held for investment, at fair value (pledged to creditors in a securitization trust) | |||||||||||
| Derivative assets, at fair value | |||||||||||
Servicing rights, at fair value (includes $ | |||||||||||
| Trading securities, at fair value | |||||||||||
| Property and equipment, net | |||||||||||
| Operating lease right-of-use assets | |||||||||||
| Loans eligible for repurchase | |||||||||||
| Investments in joint ventures | |||||||||||
Other assets | |||||||||||
| Total assets | $ | $ | |||||||||
| LIABILITIES AND EQUITY | |||||||||||
| Warehouse and other lines of credit | $ | $ | |||||||||
| Accounts payable, accrued expenses and other liabilities | |||||||||||
| Derivative liabilities, at fair value | |||||||||||
| Liability for loans eligible for repurchase | |||||||||||
| Operating lease liability | |||||||||||
| Debt obligations, net | |||||||||||
| Total liabilities | |||||||||||
Commitments and contingencies (Note 15) | |||||||||||
Class A common stock, $ | $ | $ | |||||||||
Class B common stock, $ | |||||||||||
Class C common stock, $ | |||||||||||
Class D common stock, $ | |||||||||||
Preferred stock, $ | |||||||||||
Treasury stock at cost, | ( | ( | |||||||||
| Additional paid-in capital | |||||||||||
Retained deficit | ( | ( | |||||||||
| Noncontrolling interest | |||||||||||
| Total equity | |||||||||||
| Total liabilities and equity | $ | $ | |||||||||
See accompanying notes to the unaudited consolidated financial statements.
1
loanDepot, Inc.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands except per share amounts)
(Unaudited)
(Unaudited)
| Three Months Ended March 31, | |||||||||||||||||||||||
| 2025 | 2024 | ||||||||||||||||||||||
| REVENUES: | |||||||||||||||||||||||
| Interest income | $ | $ | |||||||||||||||||||||
| Interest expense | ( | ( | |||||||||||||||||||||
Net interest income (expense) | ( | ||||||||||||||||||||||
| Gain on origination and sale of loans, net | |||||||||||||||||||||||
| Origination income, net | |||||||||||||||||||||||
| Servicing fee income | |||||||||||||||||||||||
| Change in fair value of servicing rights, net | ( | ( | |||||||||||||||||||||
| Other income | |||||||||||||||||||||||
| Total net revenues | |||||||||||||||||||||||
| EXPENSES: | |||||||||||||||||||||||
| Personnel expense | |||||||||||||||||||||||
| Marketing and advertising expense | |||||||||||||||||||||||
| Direct origination expense | |||||||||||||||||||||||
| General and administrative expense | |||||||||||||||||||||||
| Occupancy expense | |||||||||||||||||||||||
| Depreciation and amortization | |||||||||||||||||||||||
| Servicing expense | |||||||||||||||||||||||
| Other interest expense | |||||||||||||||||||||||
| Total expenses | |||||||||||||||||||||||
Loss before income taxes | ( | ( | |||||||||||||||||||||
Income tax benefit | ( | ( | |||||||||||||||||||||
Net loss | ( | ( | |||||||||||||||||||||
Net loss attributable to noncontrolling interests | ( | ( | |||||||||||||||||||||
Net loss attributable to loanDepot, Inc. | $ | ( | $ | ( | |||||||||||||||||||
| Earnings (loss) per share: | |||||||||||||||||||||||
| Basic | $ | ( | $ | ( | |||||||||||||||||||
| Diluted | $ | ( | $ | ( | |||||||||||||||||||
| Weighted average shares outstanding: | |||||||||||||||||||||||
| Basic | |||||||||||||||||||||||
| Diluted | |||||||||||||||||||||||
See accompanying notes to the unaudited consolidated financial statements.
2
loanDepot, Inc.
CONSOLIDATED STATEMENTS OF EQUITY
(Dollars in thousands)
(Unaudited)
| Common stock outstanding | Common stock $ | Treasury Shares | Additional paid-in capital | Retained Deficit | Non-controlling Interests | Total Equity | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Class A | Class C | Class D | Class A | Class C | Class D | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance at December 31, 2023 | $ | $ | $ | $ | ( | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Conversion-related deferred taxes and adjustments | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net common stock issued under stock-based compensation plans | — | — | ( | — | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Forfeiture of dividend equivalents on unvested Class A RSUs | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Forfeiture of accrued distributions on unvested Class C shares | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Distributions for taxes on behalf of unitholders, net | — | — | — | — | — | — | — | — | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | — | — | — | — | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance at March 31, 2024 | $ | $ | $ | $ | ( | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance at December 31, 2024 | $ | $ | $ | $ | ( | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Conversion-related deferred taxes and adjustments | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net common stock issued under stock-based compensation plans | ( | — | ( | — | ( | — | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Distributions for taxes on behalf of unitholders, net | — | — | — | — | — | — | — | — | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | — | — | — | — | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance at March 31, 2025 | $ | $ | $ | $ | ( | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
See accompanying notes to the unaudited consolidated financial statements.
3
loanDepot, Inc.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
(Unaudited)
| Three Months Ended March 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| CASH FLOWS FROM OPERATING ACTIVITIES | |||||||||||
Net loss | $ | ( | $ | ( | |||||||
Adjustments to reconcile net loss to net cash used in operating activities: | |||||||||||
| Depreciation and amortization expense | |||||||||||
| Amortization of operating lease right-of-use asset | |||||||||||
| Amortization of debt discount and debt issuance costs | |||||||||||
| Gain on origination and sale of loans | ( | ( | |||||||||
| Fair value change in trading securities | ( | ||||||||||
| Provision for loss obligation on sold loans and servicing rights | |||||||||||
Deferred tax benefit | ( | ( | |||||||||
| Fair value change in derivative assets | |||||||||||
| Fair value change in derivative liabilities | ( | ( | |||||||||
| Fair value change in loans held for sale | ( | ||||||||||
| Fair value change in loans held for investment | ( | ||||||||||
| Fair value change in servicing rights | |||||||||||
| Stock-based compensation expense | |||||||||||
| Originations of loans | ( | ( | |||||||||
| Proceeds from sales of loans | |||||||||||
| Proceeds from principal payments | |||||||||||
| Payments to investors for loan repurchases | ( | ( | |||||||||
| Premium paid on derivatives | ( | ( | |||||||||
| Disbursements from joint ventures | |||||||||||
| Changes in operating assets and liabilities: | |||||||||||
| Other changes in operating assets and liabilities | |||||||||||
Net cash used in operating activities | ( | ( | |||||||||
| CASH FLOWS FROM INVESTING ACTIVITIES | |||||||||||
| Purchase of property and equipment | ( | ( | |||||||||
| Proceeds from sale of servicing rights | |||||||||||
| Cash flows received on trading securities | |||||||||||
| Investments in joint ventures | ( | ||||||||||
Proceeds from principal payments on loans held for investment | |||||||||||
| Return of capital from joint ventures | |||||||||||
Net cash flows provided by investing activities | |||||||||||
See accompanying notes to the unaudited consolidated financial statements.
4
loanDepot, Inc.
CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED
(Dollars in thousands)
(Unaudited)
| Three Months Ended March 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| CASH FLOWS FROM FINANCING ACTIVITIES | |||||||||||
| Proceeds from borrowings on warehouse and other lines of credit | $ | $ | |||||||||
| Repayment of borrowings on warehouse and other lines of credit | ( | ( | |||||||||
| Proceeds from debt obligations | |||||||||||
| Payments on debt obligations | ( | ( | |||||||||
| Payments of debt issuance costs | ( | ( | |||||||||
| Treasury stock purchased to net settle and withhold taxes on vested shares | ( | ( | |||||||||
| Dividends and shareholder distributions | ( | ( | |||||||||
Net cash provided by financing activities | |||||||||||
| Net change in cash and cash equivalents and restricted cash | ( | ( | |||||||||
| Cash and cash equivalents and restricted cash at beginning of the period | |||||||||||
Cash and cash equivalents and restricted cash at end of the period | $ | $ | |||||||||
| SUPPLEMENTAL DISCLOSURES: | |||||||||||
| Cash paid (received) during the period for: | |||||||||||
| Interest | $ | $ | |||||||||
| Income taxes | $ | ( | $ | ||||||||
| Supplemental disclosure of noncash investing and financing activities | |||||||||||
| Operating leases right-of-use assets obtained in exchange for lease liabilities | $ | $ | |||||||||
Cash and cash equivalents and restricted cash reconciliation | |||||||||||
| Cash and cash equivalents | $ | $ | |||||||||
| Restricted cash | |||||||||||
Total cash and cash equivalents and restricted cash | $ | $ | |||||||||
See accompanying notes to the unaudited consolidated financial statements.
5
loanDepot, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
($ are in thousands, except per share amounts, or unless otherwise indicated)
(Unaudited)
NOTE 1 – DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accompanying unaudited consolidated financial statements were prepared in accordance with United States generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, the statements do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation were included. The results of operations for the three months ended March 31, 2025 are not necessarily indicative of the results that may be expected for the year ending December 31, 2025. For further information, refer to the consolidated financial statements and footnotes thereto included in the Annual Report of loanDepot, Inc. on Form 10-K for the year ended December 31, 2024 (“2024 Form 10-K”).
Nature of Operations
loanDepot, Inc. (together with its consolidated subsidiaries, the “Company”) was incorporated in Delaware on November 6, 2020 to facilitate the initial public offering (“IPO”) of its Class A common stock and related transactions in order to carry on the business of LD Holdings Group LLC (“LD Holdings”) and its consolidated subsidiaries. loanDepot, Inc.’s common stock began trading on the New York Stock Exchange on February 11, 2021 under the ticker symbol “LDI.” loanDepot, Inc. is a holding company and its sole material asset is its equity interest in LD Holdings.
The Company engages in the originating, financing, selling, and servicing of residential mortgage loans, and engages in title, escrow, and settlement services for mortgage loan transactions. The Company derives income primarily from gains on the origination and sale of loans to investors, from loan servicing, and from fees charged for settlement services related to the origination and sale of loans.
Cybersecurity Incident
In January 2024, the Company identified a cybersecurity incident in which an unauthorized third party gained access to certain sensitive personal information stored in the Company’s systems (the “Cybersecurity Incident”). The Company promptly took steps to contain and remediate the Cybersecurity Incident. Applicable regulators and individuals were notified, and credit monitoring and identity protection services were offered to those potentially impacted at no charge.
During the three months ended March 31, 2025, the Company recognized $0.8 million of professional expenses related to the Cybersecurity Incident. These cybersecurity related expenses are recognized in general and administrative expenses in the statements of operations. Refer to Note 15 - Commitments and Contingencies for additional information regarding the Cybersecurity Incident and related litigation. The Company maintains insurance coverage to limit its exposure to losses such as those related to the Cybersecurity Incident. The Company submitted claims to its insurers for reimbursement of some of the costs, expenses, and losses stemming from the Cybersecurity Incident. During the year ended December 31, 2024, the Company received $15.0 million of reimbursements from its insurers and recorded an additional insurance receivable of $20.0 million that is expected to be received in 2025. No additional reimbursements are expected at this time.
Summary of Significant Accounting Policies
Our accounting policies are described below and in Note 1- Description of Business and Summary of Significant Accounting Policies, of our audited consolidated financial statements included in our 2024 Form 10-K.
Consolidation and Basis of Presentation
The Company's consolidated financial statements are prepared in accordance with GAAP as codified in the FASB’s Accounting Standards Codification (“ASC”). In the opinion of management, the unaudited consolidated financial statements
6
reflect all adjustments of a normal recurring nature that are necessary for a fair presentation of the results for the interim periods presented. Interim results are not necessarily indicative of results for a full year.
loanDepot, Inc. is a holding company, its sole material asset is its equity interest in LD Holdings and as the sole managing member of LD Holdings, loanDepot, Inc. indirectly operates and controls all of LD Holdings’ business and affairs. LD Holdings is also a holding company and has no material assets other than its equity interests in its direct subsidiaries consisting of a 99.99 % ownership in loanDepot.com, LLC (“LDLLC”), the majority asset of the group, and 100
The accompanying consolidated financial statements include all of the assets, liabilities, and results of operations of the Company and consolidated variable interest entities (“VIEs”) in which the Company is the primary beneficiary. VIEs are entities that have a total equity investment at risk that is insufficient to permit the entity to finance its activities without additional subordinated financial support, whose equity investors at risk lack the ability to control the entity's activities, or is structured with non-substantive voting rights. The Company evaluates its associations with VIEs, both at inception and when there is a change in circumstance that requires reconsideration, to determine if the Company is the primary beneficiary and consolidation is required. A primary beneficiary is defined as a variable interest holder that has a controlling financial interest. A controlling financial interest requires both: (a) the power to direct the activities that most significantly impact the VIE’s economic performance, and (b) the obligation to absorb losses or receive benefits of a VIE that could potentially be significant to the VIE. The Company has not provided financial or other support during the periods presented to any VIE that it was not previously contractually required to provide. Other entities that the Company does not consolidate, but for which it has significant influence over operating and financial policies, are accounted for using the equity method. All intercompany accounts and transactions have been eliminated in consolidation.
Certain items in prior periods were reclassified to conform to the current presentation. To conform to the current period presentation, fair value change in servicing rights on the consolidated statements of cash flow includes gains or losses on the sale of mortgage servicing rights (“MSRs”). Additionally, servicing income on the consolidated statements of operations now includes amounts earned on custodial accounts that were previously included as a reduction in interest expense.
The Company has evaluated subsequent events for recognition or disclosure through the date of this report and has not identified any recordable or disclosable events that were not already reported in these consolidated financial statements or notes thereto.
Use of Estimates
The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of income and expenses during the reporting period. Management has made estimates in certain areas, including determining the fair value of loans held for sale (“LHFS”), loans held for investment (“LHFI”), servicing rights, derivative assets and derivative liabilities, trading securities, awards granted under the incentive equity plan, and determining the loan loss obligation on sold loans and MSRs. Actual results could differ from those estimates.
Concentration of Risk
The Company has limited its concentration in credit risk for cash by maintaining deposits in several financial institutions, which may at times exceed amounts covered by insurance provided by the Federal Deposit Insurance Corporation (“FDIC”). The Company has not experienced any losses in such accounts and believes it is not exposed to any significant credit risk related to cash.
Due to the nature of the mortgage lending industry, changes in interest rates may significantly impact revenue from originating mortgages and subsequent sales of loans to investors, which are the primary source of income for the Company.
7
The Company originates mortgage loans on property located throughout the United States, with loans originated for property located in California totaling approximately 17 % of total loan originations for the three months ended March 31, 2025.
The Company sells mortgage loans to various third-party investors. Three investors accounted for 38 %, 14 %, and 12 % of the Company’s loan sales for the three months ended March 31, 2025. No other investors accounted for more than 5% of the loan sales for the three months ended March 31, 2025.
NOTE 2 – FAIR VALUE
The Company's consolidated financial statements include assets and liabilities that are measured based on their estimated fair values. Refer to Note 1 - Description of Business, Presentation and Summary of Significant Accounting Policies in the 2024 Form 10-K and below for information on the fair value hierarchy, valuation methodologies, and key inputs used to measure financial assets and liabilities recorded at fair value, as well as methods and assumptions used to estimate fair value disclosures for financial instruments not recorded at fair value in their entirety on a recurring basis.
Financial Statement Items Measured at Fair Value on a Recurring Basis
The following tables presents the Company’s assets and liabilities that are measured at fair value on a recurring basis by fair value hierarchy as of the dates indicated.
| March 31, 2025 | ||||||||||||||||||||||||||
| Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||||||
| Fair value through net income: | ||||||||||||||||||||||||||
| Assets: | ||||||||||||||||||||||||||
| Loans held for sale | $ | $ | $ | $ | ||||||||||||||||||||||
Loans held for investment | ||||||||||||||||||||||||||
| Trading securities | ||||||||||||||||||||||||||
| Derivative assets: | ||||||||||||||||||||||||||
| Interest rate lock commitments | ||||||||||||||||||||||||||
| Forward sale contracts | ||||||||||||||||||||||||||
| Interest rate swap futures | ||||||||||||||||||||||||||
| Servicing rights | ||||||||||||||||||||||||||
| Total assets at fair value | $ | $ | $ | $ | ||||||||||||||||||||||
| Liabilities: | ||||||||||||||||||||||||||
| Derivative liabilities: | ||||||||||||||||||||||||||
| Interest rate lock commitments | $ | $ | $ | $ | ||||||||||||||||||||||
| Forward sale contracts | ||||||||||||||||||||||||||
| Put options on treasuries | ||||||||||||||||||||||||||
| Servicing rights | ||||||||||||||||||||||||||
| Total liabilities at fair value | $ | $ | $ | $ | ||||||||||||||||||||||
8
| December 31, 2024 | ||||||||||||||||||||||||||
| Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||||||
| Fair value through net income: | ||||||||||||||||||||||||||
| Assets: | ||||||||||||||||||||||||||
| Loans held for sale | $ | $ | $ | $ | ||||||||||||||||||||||
Loans held for investment | ||||||||||||||||||||||||||
| Trading securities | ||||||||||||||||||||||||||
| Derivative assets: | ||||||||||||||||||||||||||
| Interest rate lock commitments | ||||||||||||||||||||||||||
| Forward sale contracts | ||||||||||||||||||||||||||
| Servicing rights | ||||||||||||||||||||||||||
| Total assets at fair value | $ | $ | $ | $ | ||||||||||||||||||||||
| Liabilities: | ||||||||||||||||||||||||||
| Derivative liabilities: | ||||||||||||||||||||||||||
| Interest rate lock commitments | $ | $ | $ | $ | ||||||||||||||||||||||
| Interest rate swap futures | ||||||||||||||||||||||||||
| Forward sale contracts | ||||||||||||||||||||||||||
| Put options on treasuries | ||||||||||||||||||||||||||
| Servicing rights | ||||||||||||||||||||||||||
| Total liabilities at fair value | $ | $ | $ | $ | ||||||||||||||||||||||
The following presents the changes in the Company’s assets and liabilities that are measured at fair value on a recurring basis using significant unobservable inputs (Level 3):
| Three Months Ended March 31, 2025 | ||||||||||||||||||||||||||
| IRLCs, net | Servicing Rights, net | |||||||||||||||||||||||||
| Balance at beginning of period | $ | $ | ||||||||||||||||||||||||
| Total net gains (losses) included in: | ||||||||||||||||||||||||||
| Gain on origination and sale of loans, net: | ||||||||||||||||||||||||||
| Issuances and additions | ||||||||||||||||||||||||||
Fallout | ( | |||||||||||||||||||||||||
| Transfers of IRLC to LHFS | ( | |||||||||||||||||||||||||
Valuation changes in servicing rights, net(1) | ( | |||||||||||||||||||||||||
| Sales | ( | |||||||||||||||||||||||||
| Balance at end of period | $ | $ | ||||||||||||||||||||||||
(1)The change in unrealized gains or losses relating to servicing rights still held at March 31, 2025 amounted to a net loss of $34.9 million for the three months ended March 31, 2025.
9
| Three Months Ended March 31, 2024 | ||||||||||||||||||||||||||
| IRLCs, net | Servicing Rights, net | |||||||||||||||||||||||||
| Balance at beginning of period | $ | $ | ||||||||||||||||||||||||
| Total net gains (losses) included in: | ||||||||||||||||||||||||||
| Gain on origination and sale of loans, net: | ||||||||||||||||||||||||||
| Issuances and additions | ||||||||||||||||||||||||||
Fallout | ( | |||||||||||||||||||||||||
| Transfers of IRLC to LHFS | ( | |||||||||||||||||||||||||
Valuation changes in servicing rights, net(1) | ( | |||||||||||||||||||||||||
| Sales | ( | |||||||||||||||||||||||||
| Balance at end of period | $ | $ | ||||||||||||||||||||||||
The following table presents quantitative information about the valuation techniques and unobservable inputs applied to Level 3 fair value measurements for financial instruments measured at fair value on a recurring basis:
| March 31, 2025 | December 31, 2024 | |||||||||||||||||||||||||||||||||||||
| Unobservable Input | Range of inputs | Weighted Average(1) | Range of inputs | Weighted Average(1) | ||||||||||||||||||||||||||||||||||
| IRLCs | ||||||||||||||||||||||||||||||||||||||
| Pull-through rate | - | - | ||||||||||||||||||||||||||||||||||||
| Servicing rights | ||||||||||||||||||||||||||||||||||||||
Discount rate(2) | - | - | ||||||||||||||||||||||||||||||||||||
Prepayment rate | - | - | ||||||||||||||||||||||||||||||||||||
| Cost to service (per loan) | $ | - | $ | $ | $ | - | $ | $ | ||||||||||||||||||||||||||||||
(1)Weighted average inputs are based on the committed amounts for IRLCs and the UPB of the underlying loans for servicing rights.
Financial Statement Items Measured at Fair Value on a Nonrecurring Basis
The Company did not have any material assets or liabilities that were recorded at fair value on a nonrecurring basis as of March 31, 2025 or December 31, 2024.
Financial Statement Items Measured at Amortized Cost
The following table presents the carrying amount and estimated fair value of financial instruments included in the consolidated financial statements that are not recorded at fair value on a recurring or nonrecurring basis. The table excludes cash and cash equivalents, restricted cash, loans eligible for repurchase, warehouse and other lines of credit, and secured debt facilities as these financial instruments are highly liquid or short-term in nature and as a result, their carrying amounts approximate fair value:
10
| March 31, 2025 | December 31, 2024 | |||||||||||||||||||||||||
| Carrying Amount | Estimated Fair Value | Carrying Amount | Estimated Fair Value | |||||||||||||||||||||||
| Senior Notes | $ | $ | $ | $ | ||||||||||||||||||||||
| Other secured financings | $ | $ | $ | $ | ||||||||||||||||||||||
Fair value of the Company’s Senior Notes is estimated using quoted market prices and classified as Level 2 in the fair value hierarchy. Fair value of the Company’s other secured financings is estimated using quoted market prices and classified as Level 2 in the fair value hierarchy.
NOTE 3 – LOANS HELD FOR SALE, AT FAIR VALUE
The following table represents the unpaid principal balance of loans held for sale by product type of loan as of March 31, 2025 and December 31, 2024:
| March 31, 2025 | December 31, 2024 | |||||||||||||||||||||||||
| Amount | % | Amount | % | |||||||||||||||||||||||
| Conforming - fixed | $ | % | $ | % | ||||||||||||||||||||||
| Conforming - ARM | ||||||||||||||||||||||||||
| Government - fixed | ||||||||||||||||||||||||||
| Government - ARM | ||||||||||||||||||||||||||
| Other - residential mortgage loans | ||||||||||||||||||||||||||
| HELOC | ||||||||||||||||||||||||||
| Total | % | % | ||||||||||||||||||||||||
| Fair value adjustment | ||||||||||||||||||||||||||
| Loans held for sale, at fair value | $ | $ | ||||||||||||||||||||||||
A summary of the changes in the balance of loans held for sale is as follows:
| Three Months Ended March 31, | ||||||||||||||||||||||||||
| 2025 | 2024 | |||||||||||||||||||||||||
| Balance at beginning of period | $ | $ | ||||||||||||||||||||||||
| Origination and purchase of loans | ||||||||||||||||||||||||||
| Sales | ( | ( | ||||||||||||||||||||||||
| Repurchases | ||||||||||||||||||||||||||
| Principal payments | ( | ( | ||||||||||||||||||||||||
Fair value gain (loss) | ( | |||||||||||||||||||||||||
| Balance at end of period | $ | $ | ||||||||||||||||||||||||
11
Gain on origination and sale of loans, net is comprised of the following components:
| Three Months Ended March 31, | ||||||||||||||||||||||||||
| 2025 | 2024 | |||||||||||||||||||||||||
Premium from loan sales | $ | $ | ||||||||||||||||||||||||
| Servicing rights additions | ||||||||||||||||||||||||||
Unrealized (losses) gains from derivative assets and liabilities | ( | |||||||||||||||||||||||||
Realized gains (losses) from derivative assets and liabilities | ( | |||||||||||||||||||||||||
| Discount points, rebates and lender paid costs | ||||||||||||||||||||||||||
Fair value gain (loss) | ( | |||||||||||||||||||||||||
| Provision for loan loss obligation for loans sold | ( | ( | ||||||||||||||||||||||||
| Total gain on origination and sale of loans, net | $ | $ | ||||||||||||||||||||||||
The following table summarizes the difference between the aggregate fair value and the aggregate unpaid principal balance for loans held for sale.
| March 31, 2025 | December 31, 2024 | |||||||||||||||||||||||||||||||||||||
| Fair value | UPB | Difference | Fair value | UPB | Difference | |||||||||||||||||||||||||||||||||
| Current through 89 days delinquent | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
90+ days delinquent(1) | ( | ( | ||||||||||||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
NOTE 4 – LOANS HELD FOR INVESTMENT, AT FAIR VALUE
In April 2024, the Company executed a securitization of a pool of approximately $150.0 million of fixed-rate and adjustable-rate, performing, re-performing and non-performing residential mortgage loans that was recorded as a secured borrowing in which the loans remained on the consolidated balance sheet as loans held for investment, at fair value.
A summary of the changes in the balance of loans held for investment is as follows:
| Three Months Ended March 31, | ||||||||||||||||||||||||||||||||
| 2025 | 2024 | |||||||||||||||||||||||||||||||
| Balance at beginning of period | $ | $ | ||||||||||||||||||||||||||||||
| Principal payments | ( | |||||||||||||||||||||||||||||||
| Fair value gain | ||||||||||||||||||||||||||||||||
| Balance at end of period | $ | $ | ||||||||||||||||||||||||||||||
The following table summarizes the difference between the aggregate fair value and the aggregate unpaid principal balance for loans held for investment.
12
| March 31, 2025 | December 31, 2024 | |||||||||||||||||||||||||||||||||||||
| Fair value | UPB | Difference | Fair value | UPB | Difference | |||||||||||||||||||||||||||||||||
| Current through 89 days delinquent | $ | $ | $ | ( | $ | $ | $ | ( | ||||||||||||||||||||||||||||||
90+ days delinquent(1) | ( | ( | ||||||||||||||||||||||||||||||||||||
| Total | $ | $ | $ | ( | $ | $ | $ | ( | ||||||||||||||||||||||||||||||
Income from loans held for investment is included in other income on the consolidated statement of operations, and includes $1.5 million of interest income and $1.0 million of fair value gain for the three months ended March 31, 2025.
NOTE 5 – SERVICING RIGHTS, AT FAIR VALUE
The outstanding principal balance of the servicing portfolio was comprised of the following:
| March 31, 2025 | December 31, 2024 | |||||||||||||
Agency | $ | $ | ||||||||||||
| Government | ||||||||||||||
Other | ||||||||||||||
| Total servicing portfolio | $ | $ | ||||||||||||
A summary of the changes in the balance of servicing rights, net of servicing rights liability is as follows:
| Three Months Ended March 31, | ||||||||||||||||||||||||||
| 2025 | 2024 | |||||||||||||||||||||||||
| Balance at beginning of period | $ | $ | ||||||||||||||||||||||||
Servicing rights additions | ||||||||||||||||||||||||||
Sales proceeds, net | ( | ( | ||||||||||||||||||||||||
| Changes in fair value: | ||||||||||||||||||||||||||
| Due to changes in valuation inputs or assumptions | ( | |||||||||||||||||||||||||
| Due to collection/realization of cash flows | ( | ( | ||||||||||||||||||||||||
Realized gains (losses) on sales of servicing rights(1) | ( | |||||||||||||||||||||||||
Total changes in fair value | ( | ( | ||||||||||||||||||||||||
Balance at end of period(2) | $ | $ | ||||||||||||||||||||||||
(1) Includes realized MSR sale gain and broker fees.
(2) Servicing assets of $1.6 billion and $2.0 billion, respectively, for the three months ended March 31, 2025 and 2024, are presented net of servicing liabilities of $18.5 million and $15.8 million, respectively.
The following is a summary of the components of loan servicing fee income as reported in the Company’s consolidated statements of operations:
13
| Three Months Ended March 31, | ||||||||||||||||||||||||||
| 2025 | 2024 | |||||||||||||||||||||||||
| Contractual servicing fees | $ | $ | ||||||||||||||||||||||||
| Late, ancillary and other fees | ||||||||||||||||||||||||||
| Servicing fee income | $ | $ | ||||||||||||||||||||||||
The following is a summary of the components of change in fair value of servicing rights, net of hedge as reported in the Company’s consolidated statements of operations:
| Three Months Ended March 31, | ||||||||||||||||||||||||||
| 2025 | 2024 | |||||||||||||||||||||||||
| Changes in fair value: | ||||||||||||||||||||||||||
| $ | ( | $ | ( | |||||||||||||||||||||||
| Due to changes in valuation inputs or assumptions | ( | |||||||||||||||||||||||||
| Realized gain on sale of servicing rights | ||||||||||||||||||||||||||
| Net gain (loss) from derivatives hedging servicing rights | ( | |||||||||||||||||||||||||
Valuation changes in servicing rights, net of hedging gains and losses | ( | ( | ||||||||||||||||||||||||
Other realized losses on sales of servicing rights (1) | ( | ( | ||||||||||||||||||||||||
| Changes in fair value of servicing rights, net | $ | ( | $ | ( | ||||||||||||||||||||||
The table below illustrates hypothetical changes in fair values of servicing rights, caused by assumed immediate changes to key assumptions that are used to determine fair value.
| March 31, 2025 | December 31, 2024 | |||||||||||||
| Fair Value of Servicing Rights, net | $ | $ | ||||||||||||
| Change in Fair Value from adverse changes: | ||||||||||||||
| Discount Rate: | ||||||||||||||
| Increase 1% | ( | ( | ||||||||||||
| Increase 2% | ( | ( | ||||||||||||
| Cost of Servicing: | ||||||||||||||
| Increase 10% | ( | ( | ||||||||||||
| Increase 20% | ( | ( | ||||||||||||
| Prepayment Speed: | ||||||||||||||
| Increase 10% | ( | ( | ||||||||||||
| Increase 20% | ( | ( | ||||||||||||
Sensitivities are hypothetical changes in fair value and cannot be extrapolated because the relationship of changes in assumptions to changes in fair value may not be linear. Also, the effect of a variation in a particular assumption is calculated without changing any other assumption, whereas a change in one factor may result in changes to another. Accordingly, no assurance can be given that actual results would be consistent with the results of these estimates. As a result, actual future changes in servicing rights values may differ significantly from those displayed above.
14
NOTE 6 – DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES
Derivative instruments utilized by the Company primarily include interest rate lock commitments, forward sale contracts, mortgage-backed securities (“MBS”) put options, put options on treasuries, and interest rate swap futures. Derivative financial instruments are recognized as assets or liabilities and are measured at fair value. The Company accounts for derivatives as free-standing derivatives and does not designate any derivative financial instruments for hedge accounting. All derivative financial instruments are recognized on the consolidated balance sheets at fair value with changes in the fair values being reported in current period earnings. The Company does not use derivative financial instruments for purposes other than in support of its risk management activities. Refer to Note 1- Description of Business and Summary of Significant Accounting Policies and Note 2- Fair Value for further details on derivatives in the 2024 Form 10-K.
The following summarizes the Company’s outstanding derivative instruments:
| Fair Value | ||||||||||||||||||||||||||
| Notional | Balance Sheet Location | Asset | Liability | |||||||||||||||||||||||
| March 31, 2025: | ||||||||||||||||||||||||||
| Interest rate lock commitments | $ | Derivative asset, at fair value | $ | $ | — | |||||||||||||||||||||
| Interest rate lock commitments | Derivative liabilities, at fair value | — | ||||||||||||||||||||||||
| Forward sale contracts | Derivative asset, at fair value | — | ||||||||||||||||||||||||
| Forward sale contracts | Derivative liabilities, at fair value | — | ||||||||||||||||||||||||
| Put options on treasuries | Derivative asset, at fair value | — | ||||||||||||||||||||||||
| Put options on treasuries | Derivative liabilities, at fair value | — | ||||||||||||||||||||||||
| Interest rate swap futures | Derivative asset, at fair value | — | ||||||||||||||||||||||||
| Interest rate swap futures | Derivative liabilities, at fair value | — | ||||||||||||||||||||||||
| Total derivative financial instruments | $ | $ | ||||||||||||||||||||||||
15
| Fair Value | ||||||||||||||||||||||||||
| Notional | Balance Sheet Location | Asset | Liability | |||||||||||||||||||||||
| December 31, 2024: | ||||||||||||||||||||||||||
| Interest rate lock commitments | $ | Derivative asset, at fair value | $ | $ | — | |||||||||||||||||||||
| Interest rate lock commitments | Derivative liabilities, at fair value | — | ||||||||||||||||||||||||
| Forward sale contracts | Derivative asset, at fair value | — | ||||||||||||||||||||||||
| Forward sale contracts | Derivative liabilities, at fair value | — | ||||||||||||||||||||||||
| Put options on treasuries | Derivative asset, at fair value | — | ||||||||||||||||||||||||
| Put options on treasuries | Derivative liabilities, at fair value | — | ||||||||||||||||||||||||
| Interest rate swap futures | Derivative asset, at fair value | — | ||||||||||||||||||||||||
| Interest rate swap futures | Derivative liabilities, at fair value | — | ||||||||||||||||||||||||
| Total derivative financial instruments | $ | $ | ||||||||||||||||||||||||
Because many of the Company’s current derivative agreements are not exchange-traded, the Company is exposed to credit loss in the event of nonperformance by the counterparty to the agreements. The Company controls this risk through credit monitoring procedures including financial analysis, dollar limits and other monitoring procedures. The notional amount of the contracts does not represent the Company’s exposure to credit loss.
The following summarizes the realized and unrealized net gains or losses on derivative financial instruments and the consolidated statements of operations line items where such gains and losses are included:
| Three Months Ended March 31, | ||||||||||||||||||||||||||||||||
| Derivative instrument | Statements of Operations Location | 2025 | 2024 | |||||||||||||||||||||||||||||
| Interest rate lock commitments, net | Gain on origination and sale of loans, net | $ | $ | |||||||||||||||||||||||||||||
| Forward sale contracts | Gain on origination and sale of loans, net | ( | ||||||||||||||||||||||||||||||
| Interest rate swap futures | Gain on origination and sale of loans, net | ( | ( | |||||||||||||||||||||||||||||
| Put options | Gain on origination and sale of loans, net | |||||||||||||||||||||||||||||||
| Forward sale contracts | Change in fair value of servicing rights, net | ( | ||||||||||||||||||||||||||||||
| Interest rate swap futures | Change in fair value of servicing rights, net | ( | ||||||||||||||||||||||||||||||
| Put options | Change in fair value of servicing rights, net | ( | ||||||||||||||||||||||||||||||
Total realized and unrealized on derivative financial instruments | $ | $ | ( | |||||||||||||||||||||||||||||
NOTE 7 – BALANCE SHEET NETTING
The Company has entered into agreements with counterparties, which include netting arrangements whereby the counterparties are entitled to settle their positions on a net basis. In certain circumstances, the Company is required to provide certain counterparties financial instruments and cash collateral against derivative financial instruments, warehouse and other lines of credit, or debt obligations. Cash collateral is held in margin accounts and included in restricted cash on the Company's consolidated balance sheets.
The table below represents financial assets and liabilities that are subject to master netting arrangements or similar agreements categorized by financial instrument, together with corresponding financial instruments and corresponding collateral
16
received or pledged. In circumstances where right of set off criteria is met, the related asset and liability are presented in a net position on the consolidated balance sheets. Warehouse and other lines of credit and secured debt obligations were secured by financial instruments and cash collateral with fair values that exceeded the liability amount recorded on the consolidated balance sheets as of March 31, 2025, and December 31, 2024, respectively. Refer to Note 9 – Warehouse and Other Lines of Credit for further details on cash collateral requirements.
| March 31, 2025 | ||||||||||||||||||||||||||||||||||||||
| Gross amounts recognized | Gross amounts offset in consolidated balance sheet | Net amounts presented in consolidated balance sheet | Gross amounts not offset in consolidated balance sheet | Net amount | ||||||||||||||||||||||||||||||||||
| Financial instruments | Cash collateral | |||||||||||||||||||||||||||||||||||||
| Assets: | ||||||||||||||||||||||||||||||||||||||
| Forward sale contracts | $ | $ | ( | $ | $ | $ | $ | |||||||||||||||||||||||||||||||
| Interest rate swap futures | ||||||||||||||||||||||||||||||||||||||
| Total Assets | $ | $ | ( | $ | $ | $ | $ | |||||||||||||||||||||||||||||||
| Liabilities: | ||||||||||||||||||||||||||||||||||||||
| Forward sale contracts | $ | $ | ( | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||||
| Put options on treasuries | ( | |||||||||||||||||||||||||||||||||||||
| Warehouse and other lines of credit | ( | |||||||||||||||||||||||||||||||||||||
Secured debt obligations (1) | ( | |||||||||||||||||||||||||||||||||||||
| Total liabilities | $ | $ | ( | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||||
(1)Secured debt obligations as of March 31, 2025 included secured credit facilities, Term Notes, and other secured financings.
| December 31, 2024 | ||||||||||||||||||||||||||||||||||||||
| Gross amounts recognized | Gross amounts offset in consolidated balance sheets | Net amounts presented in consolidated balance sheets | Gross amounts not offset in consolidated balance sheets | Net amount | ||||||||||||||||||||||||||||||||||
| Financial instruments | Cash collateral | |||||||||||||||||||||||||||||||||||||
| Assets: | ||||||||||||||||||||||||||||||||||||||
| Forward sale contracts | $ | $ | ( | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||||
| Total assets | $ | $ | ( | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||||
| Liabilities: | ||||||||||||||||||||||||||||||||||||||
| Forward sale contracts | $ | $ | ( | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||||
| Put options on treasuries | ( | |||||||||||||||||||||||||||||||||||||
| Interest rate swap futures | ( | |||||||||||||||||||||||||||||||||||||
| Warehouse and other lines of credit | ( | |||||||||||||||||||||||||||||||||||||
Secured debt obligations (1) | ( | |||||||||||||||||||||||||||||||||||||
| Total liabilities | $ | $ | ( | $ | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||||
NOTE 8 – VARIABLE INTEREST ENTITIES
The Company evaluates its involvement with entities to determine if these entities meet the definition of a VIE and whether the Company is the primary beneficiary and should consolidate the VIE. The Company did not provide any non-contractual financial support to VIEs for the three months ended March 31, 2025, and year ended December 31, 2024.
17
Consolidated VIEs
LD Holdings
The Company is a holding company with its sole material asset being its equity interest in LD Holdings. As the sole managing member of LD Holdings, the Company indirectly operates and controls all of LD Holdings’ business and affairs. LD Holdings is considered a VIE and the financial results of LD Holdings and its subsidiaries are consolidated. A portion of net earnings or loss is allocated to noncontrolling interest to reflect the entitlement of the Continuing LLC Members. Refer to Note 11 – Equity for further details.
Securitization and Special Purpose Entities (“SPEs”)
The Company consolidates securitization facilities that finance mortgage loans held for sale and mortgage loans held for investment, as well as SPEs established as trusts to finance mortgage servicing rights and servicing advance receivables. Assets are transferred to a securitization or trust, which issues beneficial interests collateralized by the transferred assets, entitling the investors to specified cash flows. The Company may retain beneficial interests in the transferred assets and also holds conditional repurchase options specific to these securitizations that allow it to repurchase assets from the securitization entity. The Company’s economic exposure to loss from outstanding third-party financing is generally limited to the carrying value of the assets financed. The Company has retained risks in the securitizations including customary representations and warranties. For securitization facilities, the Company, as seller, has an option to prepay and redeem outstanding classes of issued notes after a set period of time. The Company’s exposure to these entities is primarily through its role as seller, servicer, and administrator. Servicing functions include, but are not limited to, general collection activity, preparing and furnishing statements, and loss mitigation efforts including repossession and sale of collateral.
Retained interests
In April 2024, the Company completed a transfer and securitization of a pool of performing, re-performing and non-performing residential mortgage loans. Pursuant to the credit risk retention requirements, mello Credit Strategies LLC, as sponsor, is required to retain at least a 5% economic interest in the credit risk of the assets collateralizing this securitization transaction. On the closing date, MCS and its wholly owned subsidiary retained a horizontal residual interest in the MMCA 2024-SD1 securitization comprised of the Class B notes and Trust Certificate. The Company determined that MCS is considered to be the primary beneficiary of the VIE as it retains all the risk and reward from the residual interest, and, therefore, the securitization trust is required to be consolidated. As of March 31, 2025, the remaining principal balance of loans transferred to the securitization trust was $139.8 million of which $8.2 million was 90 days or more past due.
The table below presents a summary of the carrying value and balance sheet classification of assets and liabilities in the Company’s securitization and SPE VIEs.
18
| March 31, 2025 | December 31, 2024 | |||||||||||||||||||
| Assets | ||||||||||||||||||||
| Loans held for sale, at fair value | $ | $ | ||||||||||||||||||
Loans held for investment, at fair value | ||||||||||||||||||||
| Restricted cash | ||||||||||||||||||||
| Servicing rights, at fair value | ||||||||||||||||||||
Other assets | ||||||||||||||||||||
| Total | $ | $ | ||||||||||||||||||
| Liabilities | ||||||||||||||||||||
| Warehouse and other lines of credit | $ | $ | ||||||||||||||||||
| Debt obligations, net: | ||||||||||||||||||||
MSR facilities | ||||||||||||||||||||
| Servicing advance facilities | ||||||||||||||||||||
Term Notes | ||||||||||||||||||||
| Other secured financings | ||||||||||||||||||||
| Total | $ | $ | ||||||||||||||||||
Non-Consolidated VIEs
The nature, purpose, and activities of non-consolidated VIEs currently encompass the Company’s investments in retained interests from securitizations and joint ventures. The table below presents a summary of the nonconsolidated VIEs for which the Company holds variable interests.
| March 31, 2025 | ||||||||||||||||||||||||||
| Carrying value | Maximum exposure to loss | Total assets in VIEs | ||||||||||||||||||||||||
| Assets | Liabilities | |||||||||||||||||||||||||
| Retained interests | $ | $ | — | $ | $ | |||||||||||||||||||||
| Investments in joint ventures | — | |||||||||||||||||||||||||
| Total | $ | $ | — | $ | ||||||||||||||||||||||
| December 31, 2024 | ||||||||||||||||||||||||||
| Carrying value | Maximum exposure to loss | Total assets in VIEs | ||||||||||||||||||||||||
| Assets | Liabilities | |||||||||||||||||||||||||
| Retained interests | $ | $ | — | $ | $ | |||||||||||||||||||||
| Investments in joint ventures | — | |||||||||||||||||||||||||
| Total | $ | $ | — | $ | ||||||||||||||||||||||
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Retained interests
In 2022 and 2021, the Company completed the sale and securitization of non-owner occupied residential mortgage loans. Pursuant to the credit risk retention requirements, the Company, as sponsor, is required to retain at least a 5% economic interest in the credit risk of the assets collateralizing the securitization transactions. The retained interests represent a variable interest in the securitizations. The Company determined it was not the primary beneficiary of the VIE. The Company’s continuing involvement is limited to customary servicing obligations as servicer and servicing administrator associated with retained servicing rights and the receipt of principal and interest associated with the retained interests. The investors and the securitization trusts have no recourse to the Company’s assets; holders of the securities issued by each trust can look only to the loans owned by the trust for payment. The retained interests held by the Company are subject principally to the credit risk stemming from the underlying transferred loans. The securitization trusts used to effect these transactions are variable interest entities that the Company does not consolidate. The Company remeasures the carrying value of its retained interests at each reporting date to reflect their current fair value which is included in trading securities, at fair value on the consolidated balance sheets, with corresponding gains or losses included in other income on the consolidated statements of operations. As of March 31, 2025, the remaining principal balance of loans transferred to these securitization trusts was $2.0 billion of which $4.9 million was 90 days or more past due.
Investments in joint ventures
NOTE 9 – WAREHOUSE AND OTHER LINES OF CREDIT
At March 31, 2025, the Company was a party to nine revolving lines of credit with lenders providing $3.7 billion of warehouse and securitization facilities. The facilities are used to fund, and are secured by, residential mortgage loans held for sale. The facilities are repaid using proceeds from the sale of loans. Interest is generally payable monthly in arrears or on the repurchase date of a loan, and outstanding principal is payable upon receipt of loan sale proceeds or on the repurchase date of a loan. Outstanding principal related to a particular loan must also be repaid after the expiration of a contractual period of time or, if applicable, upon the occurrence of certain events of default with respect to the underlying loan. Interest expense is recorded to interest expense on the consolidated statements of operations. The base interest rates on the facilities bear interest at a derivative of the secured overnight financing rate (“SOFR”), plus a margin. Some of the facilities carry additional fees charged on the total line amount, commitment fees charged on the committed portion of the line, and non-usage fees charged when monthly usage falls below a certain utilization percentage. As of March 31, 2025, the interest rate was comprised of the applicable base rate plus a spread ranging from 1.50 % to 2.25 %. The base interest rate for warehouse facilities is subject to increase based upon the characteristics of the underlying loans collateralizing the lines of credit, including, but not limited to product type and number of days held for sale. The warehouse lines have maturities staggered from September 2025 through September 2026. As of March 31, 2025, there was one securitization facility with an original two year term scheduled to expire in 2026. All other warehouse lines and other lines of credit are subject to renewal based on an annual credit review conducted by the lender.
Certain warehouse line lenders require the Company to maintain cash accounts with minimum required balances at all times. As of March 31, 2025 and December 31, 2024, the Company had posted a total of $8.7 million and $15.6 million, respectively, of restricted cash as collateral with our warehouse lenders and securitization facilities of which $4.8
Under the terms of these warehouse lines, the Company is required to maintain various covenants. As of March 31, 2025, the Company was in compliance with all covenants under the warehouse lines.
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Securitization Facilities
In September 2024, in connection with the termination of a securitization facility issued in 2021, the Company issued notes and a class of owner trust certificates through an additional securitization facility (“2024-1 Securitization Facility”) backed by a revolving warehouse line of credit. The 2024-1 Securitization Facility is secured by first-lien, fixed-rate or adjustable-rate, residential mortgage loans originated in accordance with the criteria of Fannie Mae and Freddie Mac for the purchase of mortgage loans or in accordance with the criteria of Ginnie Mae for the guarantee of securities backed by mortgage loans. The 2024-1 Securitization Facility issued $300.0 million in notes that bear interest at SOFR, plus a margin. The 2024-1 Securitization Facility will terminate on the earlier of (i) the two-year anniversary of the initial purchase date, (ii) the Company exercising its right to optional prepayment in full, or (iii) the date of the occurrence and continuance of an event of default.
The following table presents information on warehouse and securitization facilities and the outstanding balance as of March 31, 2025 and December 31, 2024:
| Outstanding Balance | ||||||||||||||||||||||||||||||||||||||
| Committed Amount | Uncommitted Amount | Total Facility Amount | Expiration Date | March 31, 2025 | December 31, 2024 | |||||||||||||||||||||||||||||||||
Facility 1(1) | $ | $ | $ | 9/23/2025 | $ | $ | ||||||||||||||||||||||||||||||||
Facility 2(1) | 9/22/2025 | |||||||||||||||||||||||||||||||||||||
Facility 3(3) | 4/15/2025 | |||||||||||||||||||||||||||||||||||||
| Facility 4 | 10/29/2025 | |||||||||||||||||||||||||||||||||||||
Facility 5(1) | N/A | |||||||||||||||||||||||||||||||||||||
| Facility 6 | 9/19/2025 | |||||||||||||||||||||||||||||||||||||
Facility 7(2) | 9/25/2026 | |||||||||||||||||||||||||||||||||||||
| Facility 8 | 11/13/2025 | |||||||||||||||||||||||||||||||||||||
Facility 9(1) | 10/30/2025 | |||||||||||||||||||||||||||||||||||||
| Total | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||
(1)In addition to the warehouse line, the lender provides a separate gestation facility to finance recently sold MBS up to the MBS settlement date.
(2)Securitization backed by a revolving warehouse facility to finance newly originated first-lien fixed and adjustable rate mortgage loans.
(3)In April 2025, the maturity date was extended to April 2026.
The following table presents information on borrowings under warehouse and securitization facilities:
| Three Months Ended March 31, | ||||||||||||||||||||||||||
| 2025 | 2024 | |||||||||||||||||||||||||
| Maximum outstanding balance during the period | $ | $ | ||||||||||||||||||||||||
| Average balance outstanding during the period | ||||||||||||||||||||||||||
| Collateral pledged (loans held for sale) | ||||||||||||||||||||||||||
| Weighted average interest rate during the period | % | % | ||||||||||||||||||||||||
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NOTE 10 – DEBT OBLIGATIONS
The following table presents the outstanding debt as of March 31, 2025 and December 31, 2024:
| March 31, 2025 | December 31, 2024 | |||||||||||||||||||||||||
| Secured debt obligations, net: | ||||||||||||||||||||||||||
| Secured credit facilities | ||||||||||||||||||||||||||
| MSR facilities | $ | $ | ||||||||||||||||||||||||
| Securities financing facilities | ||||||||||||||||||||||||||
| Servicing advance facilities | ||||||||||||||||||||||||||
| Total secured credit facilities | ||||||||||||||||||||||||||
| Term Notes | ||||||||||||||||||||||||||
Other secured financings | ||||||||||||||||||||||||||
| Total secured debt obligations, net | ||||||||||||||||||||||||||
| Other debt obligations, net: | ||||||||||||||||||||||||||
| Senior Notes | ||||||||||||||||||||||||||
| Total debt obligations, net | $ | $ | ||||||||||||||||||||||||
Certain of the Company’s secured debt obligations require us to satisfy financial covenants, including minimum levels of profitability, tangible net worth, liquidity, and maximum levels of consolidated leverage. The Company was in compliance with all such financial covenants as of March 31, 2025.
Secured Credit Facilities
Secured credit facilities are revolving facilities collateralized by MSRs, trading securities, and servicing advances.
MSR Facilities
In August 2017, the Company established the GMSR Trust to finance its Ginnie Mae mortgage servicing rights through the issuance of variable or term funding notes. Both are secured by participation certificates representing beneficial interests in Ginnie Mae mortgage servicing rights held by the GMSR Trust with a fair value of $627.5 million as of March 31, 2025. As of March 31, 2025 there were $200 million in Term Notes outstanding. In January 2024, the Company secured a new facility to issue variable funding notes that accrue interest at SOFR plus a margin per annum, providing $250.0 million in borrowing capacity and extending their maturity to July 2026. As of March 31, 2025, the Company had $202.0 million in outstanding variable funding notes and $3.1 million in unamortized deferred financial costs.
In January 2025, the Company entered into a credit facility agreement to provide for $400.0 million in borrowing capacity to replace a previous credit facility that was originally entered into in December of 2021. This facility is secured by Freddie Mac mortgage servicing rights with a fair value of $488.6 million as of March 31, 2025. This facility bears interest at SOFR, plus a margin per annum and matures in January 2027. At March 31, 2025, there was $318.2 million outstanding on this facility and $1.9 million in unamortized deferred financing costs.
In January 2022, the Company entered into a credit facility agreement. The agreement was amended in July 2024 to provide for $450.0 million in borrowing capacity. The facility is secured by Fannie Mae mortgage servicing rights with a fair value of $416.8 million as of March 31, 2025. The facility bears interest at SOFR, plus a margin per annum and matures in January 2026. At March 31, 2025, there was $253.5 million outstanding on this facility and $0.1 million in unamortized deferred financing costs.
Securities Financing Facilities
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The Company has entered into master repurchase agreements to finance retained interest securities related to its securitizations. The securities financing facilities have an advance rate between 50 % and 85 % based on classes of the securities and accrue interest at a rate of 90-day SOFR, plus a margin. The securities financing facilities are secured by the trading securities, which represent retained interests in the credit risk of the assets collateralizing certain securitization transactions. As of March 31, 2025, the trading securities had a fair value of $87.4 million on the consolidated balance sheets and there were $81.2 million in securities financing facilities outstanding.
Servicing Advance Facilities
In September 2020, the Company, through its indirect-wholly owned subsidiary loanDepot Agency Advance Receivables Trust (the “Advance Receivables Trust”), entered into a variable funding note facility for the financing of servicing advance receivables with respect to residential mortgage loans serviced by it on behalf of Fannie Mae and Freddie Mac. Pursuant to an indenture, the Advance Receivables Trust can issue up to $100.0 million in variable funding notes (the “2020-VF1 Notes”). The 2020-VF1 Notes accrue interest at SOFR plus a margin per annum. In September 2024, the 2020-VF1 Notes were extended to mature in September 2025 (unless earlier redeemed in accordance with their terms). At March 31, 2025, there was $20.1 million in 2020-VF1 Notes outstanding, with pledged servicing advances of $24.4 million.
In November 2021, the Company, through the GMSR Trust, issued variable funding notes secured by principal and interest advance receivables and servicing advance receivables related to residential mortgage loans serviced on behalf of Ginnie Mae. These variable funding notes bear interest at SOFR plus a margin per annum and were scheduled to mature in January 2024. In January 2024, the Company secured a new facility to issue up to $250.0 million in variable funding notes and to extend their maturity to July 2026. As of March 31, 2025, there was $37.0 million outstanding on the variable funding notes, with pledged servicing advances of $55.3 million.
Term Notes
In October 2018, the Company, through the GMSR Trust issued the Series 2018-GT1 Term Notes (“Term Notes”). In September 2023, the Term Notes were extended to mature in October 2025 and accrue interest at SOFR plus a margin per annum. At March 31, 2025, there were $200.0 million in Term Notes outstanding and no unamortized deferred financing costs.
Other Secured Financings
In April 2024, the Company executed a securitization of a pool of approximately $150.0 million fixed-rate and adjustable-rate, performing, re-performing and non-performing residential mortgage loans, whereby the loans were transferred to statutory trust MMCA 2024-SD1. The Company evaluated the sale of loans according to ASC 860 - Transfers and Servicing and determined that the transaction does not qualify for sale treatment. As a result, the securitization was recorded as a secured borrowing in which the loans remain on the consolidated balance sheet as loans held for investment, at fair value and the securitization debt is also recognized on the consolidated balance sheet in debt obligations, net. The secured financing is collateralized by and indexed to the pool of residential mortgage loans held by a VIE. As of March 31, 2025, there was $95.0 million outstanding in other secured financings, net of $7.1 million in debt discount and $1.1 million in unamortized deferred financing costs.
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Senior Notes
In October 2020, the Company issued $500.0 million in aggregate principal amount of 6.50 % unsecured senior notes due 2025, (the “2025 Senior Notes”). The 2025 Senior Notes will mature on November 1, 2025. Interest on the 2025 Senior Notes accrues at a rate of 6.50 % per annum, payable semi-annually in arrears on May 1 and November 1 of each year. The Company may redeem the 2025 Senior Notes, in whole or in part, at various redemption prices. In June 2024, the Company completed an offer to exchange any and all of the outstanding 2025 Senior Notes for newly issued Senior Secured Notes due November 2027 (the “2027 Senior Notes”). The offer was an exchange for a mixed consideration of $1,100 in cash and principal amount of 2027 Senior Notes for each $1,000 principal amount of 2025 Senior Notes tendered at or prior to the expiration date. At the time of expiration, the Company repurchased $478.0 million of 2025 Senior Notes in exchange for $340.6 million of 2027 Senior Notes and cash of $185.0 million resulting in a loss on extinguishment of debt of $5.7 million. Interest on the 2027 Senior Notes accrues at a rate of 8.750 % per annum, payable semi-annually in arrears on May 1 and November 1 of each year. The Company may redeem the 2027 Senior Notes, in whole or in part, at various redemption prices. The 2027 Senior Notes are fully and unconditionally guaranteed, jointly and severally, on a senior unsecured basis by certain of LD Holding’s wholly-owned restricted subsidiaries, and secured by a first priority security interest (subject to permitted liens) in (1) a securities account holding certain risk retention securities (trading securities) held by MCS, a guarantor of the 2027 Senior Notes, (2) certain unencumbered non-agency mortgage servicing rights held by LDLLC, a guarantor of the 2027 Senior Notes, with a fair value of up to $60.0 million, and (3) a securities account holding $100.6 million aggregate principal amount of LD Holding’s 6.125 % 2028 Senior Notes that were previously repurchased by LD Holdings held by ART, a guarantor of the 2027 Senior Notes.
The Company evaluated the debt exchange under the guidance in ASC 470-50 Debt - Modifications and Extinguishments. As the present value of the cash flows under the 2027 Senior Notes differed by more than 10% from the present value of the remaining cash flows under the terms of the 2025 Senior Notes, it was determined that the debt was substantially different, and therefore, the transaction was accounted for as a debt extinguishment. As of March 31, 2025, there were $19.8 million in 2025 Senior Notes outstanding and $46 thousand in unamortized deferred financing costs. As of March 31, 2025. there were $340.6 million in 2027 Senior Notes outstanding, $35.9 million of unamortized debt discount and $5.1 million in unamortized deferred financing costs.
In March 2021, the Company issued $600.0 million in aggregate principal amount of 6.125 % unsecured senior notes due 2028 (the “2028 Senior Notes” and together with the 2025 Senior Notes and 2027 Senior Notes, the "Senior Notes"). The 2028 Senior Notes will mature on April 1, 2028. Interest on the 2028 Senior Notes accrues at a rate of 6.125 % per annum, payable semi-annually in arrears on April 1 and October 1 of each year. The Company may redeem the 2028 Senior Notes at various redemption prices. As of March 31, 2025, there were $499.4 million in 2028 Senior Notes outstanding and $3.2 million in unamortized deferred financing costs.
Interest Expense
NOTE 11 – EQUITY
The Company consolidates the financial results of LD Holdings and reports noncontrolling interest related to the interests held by the Continuing LLC Members. The noncontrolling interest of $207.7 million and $233.7 million as of March 31, 2025 and December 31, 2024, respectively, represented the economic interest in LD Holdings held by the Continuing LLC Members. The Continuing LLC Members have the right to exchange one Holdco Unit and one share of Class B common stock or Class C common stock, as applicable, together for cash or one share of Class A common stock at the Company’s election, subject to customary conversion rate adjustments for stock splits, stock dividends, and reclassifications. As Continuing LLC Members convert shares, noncontrolling interest is adjusted to proportionately reduce the economic interest in LD Holdings with an offset to additional paid-in-capital on the consolidated statements of equity. The following table summarizes the ownership of LD Holdings as of March 31, 2025 and December 31, 2024.
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| March 31, 2025 | December 31, 2024 | ||||||||||||||||
| Holding Member Interests: | Holdco Units | Ownership Percentage | Holdco Units | Ownership Percentage | |||||||||||||
| loanDepot, Inc. | |||||||||||||||||
| Continuing LLC Members | |||||||||||||||||
| Total | |||||||||||||||||
NOTE 12 – EARNINGS (LOSS) PER SHARE
Basic earnings (loss) per share of Class A common stock and Class D common stock is computed using the two-class method by dividing net earnings (loss) allocated to common stockholders by the weighted-average number of shares of Class A common stock and Class D common stock, respectively, outstanding during the period. Diluted earnings (loss) per share of Class A common stock and Class D common stock is computed using the two-class method by dividing net earnings (loss) allocated to common stockholders by the weighted-average number of shares of Class A common stock and Class D common stock, respectively, outstanding adjusted to give effect to potentially dilutive securities. Diluted EPS was computed using the treasury stock method for Class A RSUs, non-qualified stock options, and ESPP shares and the if-converted method for Class C common stock. During the first quarter of 2024, the Company discontinued the ESPP Plan.
There was no The following table sets forth the calculation of basic and diluted loss per share for Class A common stock and Class D common stock:
| Three Months Ended | |||||||||||||||||||||||||||||||||||
| March 31, 2025 | |||||||||||||||||||||||||||||||||||
| Class A | Class D | Total | |||||||||||||||||||||||||||||||||
| Net loss allocated to common stockholders | $ | ( | $ | ( | $ | ( | |||||||||||||||||||||||||||||
| Weighted average shares - basic | |||||||||||||||||||||||||||||||||||
| Earnings (loss) per share - basic | $ | ( | $ | ( | $ | ( | |||||||||||||||||||||||||||||
| Weighted average shares - diluted | |||||||||||||||||||||||||||||||||||
| Earnings (loss) per share - diluted | $ | ( | $ | ( | $ | ( | |||||||||||||||||||||||||||||
25
| Three Months Ended | |||||||||||||||||||||||||||||||||||
| March 31, 2024 | |||||||||||||||||||||||||||||||||||
| Class A | Class D | Total | |||||||||||||||||||||||||||||||||
Net loss allocated to common stockholders | $ | ( | $ | ( | $ | ( | |||||||||||||||||||||||||||||
| Weighted average shares - basic | |||||||||||||||||||||||||||||||||||
Loss per share - basic | $ | ( | $ | ( | $ | ( | |||||||||||||||||||||||||||||
Diluted loss per share: | |||||||||||||||||||||||||||||||||||
Net loss allocated to common shareholders - diluted | $ | ( | $ | ( | $ | ( | |||||||||||||||||||||||||||||
| Weighted average shares - diluted | |||||||||||||||||||||||||||||||||||
Loss per share - diluted | $ | ( | $ | ( | $ | ( | |||||||||||||||||||||||||||||
The potential dilutive effect of the exchange of Class C common stock for Class A common stock is evaluated under the if-converted method. Reallocation of net income or loss attributable to the dilutive impact of the exchange of Class C common stock for Class A common stock was tax-effected using the combined federal and state rate (less federal benefit) of 26.1 % and 26.2 % for the three months ended March 31, 2025 and 2024, respectively. The potential dilutive effect of stock options, restricted stock units, and ESPP shares is evaluated under the treasury stock method. The following table summarizes the shares that were anti-dilutive and excluded from the computation of diluted earnings (loss) per share for the presented periods.
| Three Months Ended | |||||||||||||||||||||||
| March 31, 2025 | March 31, 2024 | ||||||||||||||||||||||
| Class C common stock | |||||||||||||||||||||||
Stock options, restricted stock units, ESPP shares(1) | |||||||||||||||||||||||
| Total | |||||||||||||||||||||||
NOTE 13 – INCOME TAXES
The Company’s income tax expense varies from the expense that would be expected based on statutory rates due principally to its organizational structure.
As of March 31, 2025 and December 31, 2024, the Company had a deferred tax asset before any valuation allowance of $82.3 million and $67.9 million, respectively, and a deferred tax liability of $92.2 million and $90.6 million, respectively. Deferred income taxes arise from temporary differences between the tax basis of assets and liabilities and their reported amounts in the financial statements, which will result in taxable or deductible amounts in the future. The deferred tax liability as of March 31, 2025 and December 31, 2024 relates to temporary differences in the book basis as compared to the tax basis of loanDepot, Inc.’s investment in LD Holdings, net of tax benefits from future deductions for payments made under a Tax Receivable Agreement (“TRA”) as a result of the IPO. Changes in tax laws and rates may affect recorded deferred tax assets and liabilities and the Company’s effective tax rate in the future. Deferred income taxes are measured using the applicable tax rates that are expected to apply in the year when the asset is realized or the liability is settled, based on the tax rates that have been enacted at the reporting date. The Company measured its deferred tax assets and liabilities at March 31, 2025 and December 31, 2024 using the combined federal and state rate (less federal benefit) of 26.1 % and 25.8 %, respectively. The Company establishes a valuation allowance when it is more-likely-than-not that some portion or all of the deferred tax assets will not be realized. As of March 31, 2025, the Company had a valuation allowance of $2.6 million on the deferred tax assets of American Coast Title Company and tax credits that have limited carryforward periods and may expire prior to the Company
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being able to utilize them. The Company did not establish a valuation allowance for remaining deferred tax assets as the Company believes it is more likely than not that the Company will realize the benefits of the deferred tax assets. The Company recognized a TRA liability of $86.5 million and $80.2 million as of March 31, 2025 and December 31, 2024, respectively, which represents the Company’s estimate of the aggregate amount that it will pay under the TRA. The liabilities under the TRA are to compensate the original owners for 85 % of the value for the tax savings associated with the amortization of the tax basis step-up. Refer to Note 15 - Commitments and Contingencies, for further information on the TRA liability.
NOTE 14 – RELATED PARTY TRANSACTIONS
In conjunction with its joint ventures, the Company entered into agreements to provide services to the joint ventures for which it receives and pays fees. Services for which the Company earns fees are comprised of loan processing and administrative services (legal, accounting, human resources, data processing and management information, assignment processing, post-closing, underwriting, facilities management, quality control, management consulting, risk management, promotions, public relations, advertising and compliance with credit agreements). The Company also originates eligible mortgage loans referred by its joint ventures for which the Company pays the joint ventures a broker fee.
Fees earned and costs incurred from joint ventures were as follows:
| Three Months Ended March 31, | ||||||||||||||||||||||||||
| 2025 | 2024 | |||||||||||||||||||||||||
| Loan processing and administrative services fee income | $ | $ | ||||||||||||||||||||||||
| Loan origination broker fees expense | ||||||||||||||||||||||||||
Net amounts payable to or receivable from joint ventures were as follows:
| March 31, 2025 | December 31, 2024 | |||||||||||||
Amounts payable to joint ventures | $ | $ | ||||||||||||
The Company has entered into a TRA with Parthenon Stockholders and certain Continuing LLC Members. There were no
NOTE 15– COMMITMENTS AND CONTINGENCIES
Escrow Services
In conducting its operations, the Company, through its wholly-owned subsidiaries, LDSS and ACT, routinely hold customers' assets in escrow pending completion of real estate financing transactions. These amounts are maintained in segregated bank accounts and are offset with the related liabilities resulting in no 36.8 million and $17.5 million at March 31, 2025 and December 31, 2024, respectively.
Legal Proceedings
The Company is a defendant in, or a party to, legal actions related to matters that arise in connection with the conduct of the Company’s business. The Company operates in a highly regulated industry and is routinely subject to examinations, investigations, subpoenas, inquiries and reviews by various governmental and regulatory agencies. The Company seeks to resolve all litigation and regulatory matters in the manner management believes is in the best interest of the Company and contests liability, allegations of wrongdoing, and, where applicable, the amount of damages or scope of any penalties or other relief sought as appropriate in each pending matter.
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On at least a quarterly basis, the Company assesses its liabilities and contingencies in connection with outstanding legal and regulatory proceedings utilizing the latest information available. The Company accrues for estimated losses when they are probable to occur and such losses are reasonably estimable. Any estimated loss is subject to significant judgment and is based upon currently available information, a variety of assumptions, and known and unknown uncertainties. The actual costs of resolving these proceedings may be substantially higher or lower than the amounts accrued. Based on the Company’s current understanding of pending legal and regulatory actions and proceedings, management does not believe that possible losses in excess of the amounts accrued arising from pending or threatened legal matters, individually or in the aggregate, will have a material adverse effect on the consolidated financial position, operating results or cash flows of the Company. However, unfavorable resolutions could affect the Company’s consolidated financial position, results of operations or cash flows for the years in which they are resolved.
Cybersecurity Incident Class Action Litigation
The Company has been named as a defendant in 23 putative class action cases alleging harm from the Cybersecurity Incident and seeking various remedies, including monetary and injunctive relief. The cases have been consolidated into a single action, In re loanDepot Data Breach Litigation, pending in the Central District of California. On January 13, 2025, the court granted preliminary approval of a settlement agreement between the parties. A hearing regarding final approval of the settlement is scheduled for August 18, 2025. Regulatory inquiries and requests for information related to the Cyber Incident are ongoing. The Company does not believe that the amount of loss in excess of the amounts accrued is reasonably estimable in this matter at this time.
Employment Litigation
On September 21, 2021, a former senior operations officer filed a complaint, as subsequently amended, with the Superior Court of the State of California, County of Orange. The complaint originally named the Company and two former executive officers as defendants, and alleged loan origination noncompliance and various employment-related claims, including hostile work environment and gender discrimination. The claims against the two former executive officers were dismissed by the court in 2021. Plaintiff's claims regarding improper origination of loan documents, gender discrimination and several other ancillary employment claims were dismissed as a result of several pre-trial motions filed on behalf of the Company. On February 7, 2025, a unanimous jury returned a verdict in favor of loanDepot regarding the remaining claims in the litigation. Plaintiff filed a notice of appeal of the jury verdict on April 15, 2025. The Company does not believe that a loss is probable or that the amount of loss is reasonably estimable in this matter at this time.
Securities Class Action Litigation
Beginning in September 2021, two putative class action lawsuits were filed in the United States District Court for the Central District of California asserting claims under the U.S. securities laws against the Company, certain of its directors, and certain of its officers regarding certain disclosures made in connection with the Company’s IPO. The two actions were consolidated and a consolidated amended complaint was filed in June 2022, which, in addition to challenging disclosures made in connection with the IPO, alleges that certain disclosures made after the IPO were false and/or misleading. On June 26, 2023, the parties reached an agreement in principle to settle the action. On May 24, 2024, the Court granted final approval of the settlement and entered its final judgment dismissing the action. On June 18, 2024, one of the class members filed a notice of appeal to the United States Court of Appeals for the Ninth Circuit from the district court’s order approving the settlement.
Stockholder Derivative Litigation
Beginning in October 2021, four shareholder derivative complaints were filed in the United States District Court for the Central District of California against certain of the Company’s directors and officers, alleging, among things, that these defendants breached their fiduciary duties by causing the Company to make the disclosures being challenged in the putative securities class action described above and seeking unspecified monetary damages for the Company and that the Company make certain changes to its corporate governance. These derivative actions subsequently were consolidated into a single action (the “California Federal Action”). The California Federal Action currently is stayed. Beginning in March 2022, two substantially similar shareholder derivative complaints were filed in the United States District Court for the District of
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Delaware, and then were consolidated into a single action (the “Delaware Federal Action”). The Delaware Federal Action currently is stayed. Beginning in June 2023, three substantially similar shareholder derivative complaints were filed in the Delaware Court of Chancery. Two of the derivative actions were subsequently consolidated into a single action (the “Delaware Chancery Action”). The third action was voluntarily dismissed. On October 7, 2024, the parties of the above-referenced actions attended a global mediation where a settlement in principle was reached to resolve all of the actions. On February 27, 2025, the plaintiffs in the California Federal Action filed a motion for preliminary approval of the settlement, which includes a set of governance reforms to be implemented by the Company. The Company does not believe that the amount of loss in excess of the amounts accrued is reasonably estimable in this matter at this time.
Telephone Consumer Protection Act Class Action
In June 2022, a putative class action lawsuit was filed against the Company, captioned Jeffrey Kearns v. loanDepot.com, LLC (“Kearns”), in the United States District Court for the Central District of California. The Second Amended Complaint (“SAC”) asserts claims under the Telephone Consumer Protection Act, 47 U.S.C. § 227 (“TCPA”), alleging the Company sent prerecorded voice calls to cellular telephones without express written consent. The SAC seeks actual and statutory damages under the TCPA, injunctive relief, and attorneys’ fees and costs. On January 26, 2024, plaintiff filed his motion for class certification. The motion has been fully briefed and was set for hearing on June 21, 2024, however, the Court took the hearing off the calendar and advised that it would make its ruling on the briefs. The Company believes it has substantial defenses to this lawsuit and it continues to vigorously defend against it. On May 5, 2025, the Court granted preliminary approval of the settlement. The hearing on final settlement is scheduled for September 26, 2025. The Company does not believe that a loss is probable or that the amount of loss is reasonably estimable in this matter at this time.
Commitments to Extend Credit
The Company enters into IRLCs with customers who have applied for residential mortgage loans and meet certain credit and underwriting criteria. These commitments expose the Company to market risk if interest rates change and the loan is not economically hedged or committed to an investor. The Company is also exposed to credit loss if the loan is originated and not sold to an investor and the customer does not perform. The collateral upon extension of credit typically consists of a first deed of trust in the mortgagor’s residential property. Commitments to originate loans do not necessarily reflect future cash requirements as some commitments are expected to expire without being drawn upon. Total commitments to originate loans as of March 31, 2025 and December 31, 2024 approximated $2.5 billion and $1.8 billion, respectively. These loan commitments are treated as derivatives and are carried at fair value, refer to Note 6 - Derivative Financial Instruments and Hedging Activities for further information on derivatives.
Loan Loss Obligation for Sold Loans
When the Company sells mortgage loans, it makes customary representations and warranties to the purchasers about various characteristics of each loan such as the origination and underwriting guidelines, including but not limited to the validity of the lien securing the loan, property eligibility, borrower credit, income and asset requirements, and compliance with applicable federal, state and local law. The Company establishes a loan repurchase reserve for losses associated with repurchase loan obligations if the Company breached a representation or warranty given to the loan purchaser. Additionally, the Company’s loan loss obligation for sold loans includes an estimate for losses associated with early payoffs and early payment defaults. Charge-offs associated with early payoffs, early payment defaults and losses related to representations, warranties, and other provisions are also included.
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The activity related to the loan loss obligation for sold loans is as follows:
| Three Months Ended March 31, | ||||||||||||||||||||||||||
| 2025 | 2024 | |||||||||||||||||||||||||
| Balance at beginning of period | $ | $ | ||||||||||||||||||||||||
Provision for loan loss obligations | ||||||||||||||||||||||||||
| Charge-offs | ( | ( | ||||||||||||||||||||||||
| Balance at end of period | $ | $ | ||||||||||||||||||||||||
Obligation for Sold MSRs
The Company recognizes sales of mortgage servicing rights as sales if title passes, if substantially all risks and rewards of ownership have irrevocably passed to the purchaser, and any protection provisions retained by the Company are minor and can be reasonably estimated. If a sale is recognized and only minor protection provisions exist, a liability for the estimated obligation associated with those provisions is recorded in accounts payable, accrued expenses and other liabilities on the consolidated balance sheet. The Company establishes a reserve related to the reimbursement of the purchase price for any loans that are prepaid in full within 90 days of the MSR sale transaction. The obligation for sold MSRs was $0.3 million and $2.9 million as of March 31, 2025 and December 31, 2024, respectively.
TRA Liability
NOTE 16 – REGULATORY CAPITAL AND LIQUIDITY REQUIREMENTS
NOTE 17 - SEGMENT REPORTING
The Company’s organizational structure is currently comprised of one operating segment. This determination is based on the organizational structure which reflects how the chief operating decision maker evaluates the performance of the business. The Company’s Chief Operating Decision Maker (“CODM”) is the Chief Executive Officer. The CODM evaluates the performance of the business based on the measurement of consolidated net income (loss). The CODM uses this consolidated measure to allocate resources, assess the performance of the business and for making key operating decisions such as, but not limited to, approving operating budgets and forecasts, entering into significant contracts, hiring of key management or executive personnel, making significant capital investment decisions and/or implementing company-wide strategy.
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As the Company operates as one operating segment, financial data provided in the consolidated financial statements, including total net revenues of $273.6 million, consolidated net loss of $40.7 million, and total assets of $6.4 billion, represent the performance of our single reportable segment. The consolidated statements of operations reflect the same level of significant expense categories regularly provided to the CODM for decision-making purposes. General and administrative expense reported in the consolidated statements of operations includes office and equipment expense, professional fees such as legal, compliance, consulting, and expenses for audit and tax services, data processing, telecommunications, travel and entertainment and other general expenses.
For the three months ended March 31, 2025, there was no change in segmentation or measurement methods for segment reporting.
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion provides an analysis of the Company's financial condition, cash flows and results of operations from management's perspective and should be read in conjunction with our consolidated financial statements and the accompanying notes included under Part I. Item 1 of this report. The results of operations described below are not necessarily indicative of the results to be expected for any future periods. This discussion includes forward-looking information that involves risks and assumptions which could cause actual results to differ materially from management’s expectations. See our cautionary language at the beginning of this report under “Special Note Regarding Forward-Looking Statements” and for a more complete discussion of the factors that could affect our future results refer to Part I, Item 1A "Risk Factors" and Part II, Item 7 “Management's Discussion and Analysis of Financial Condition and Results of Operations” in our 2024 Form 10-K and elsewhere in our filings with the SEC. Capitalized terms used but not otherwise defined herein have the meanings set forth in our Form 10-K.
Overview
We are a customer-centric, technology-empowered residential mortgage platform. Our goal is to be the lender of choice for consumers and the employer of choice by being a company that operates on sound principles of exceptional value, ethics, and transparency. Since our inception, we have significantly expanded our origination platform as well as developed an in-house servicing platform. Our primary sources of revenue are derived from the origination of conventional and government mortgage loans, servicing conventional and government mortgage loans, and providing ancillary services.
Key Factors Influencing Our Results of Operations
The residential real estate market and associated mortgage loan origination volumes are influenced by economic factors such as interest rates, housing prices, and unemployment rates. Purchase mortgage loan origination volume can be subject to seasonal trends as home sales typically rise during the spring and summer seasons and decline in the fall and winter seasons. This is somewhat offset by purchase loan originations sourced from our joint ventures which typically experience their highest level of activity during November and December as home builders focus on completing and selling homes prior to year-end. Seasonality has less of an impact on mortgage loan refinancing volumes, which are primarily driven by fluctuations in mortgage loan interest rates.
Increases in interest rates may affect affordability and the ability for potential home buyers to qualify for a mortgage loan. As interest rates increase, rate and term refinancings become less attractive to consumers. However, rising interest rates during periods of inflationary pressures can make real assets, including real estate, an attractive investment. Demand for real estate may result in ongoing support for purchase mortgages and home price appreciation creating borrower equity that could result in opportunities for cash-out refinancings or home equity lines of credit.
Our mortgage loan refinancing volumes (and to a lesser degree, our purchase volumes), balance sheets, and results of operations are influenced by changes in interest rates and how we effectively manage the related interest rate risk. The majority of our assets are subject to interest rate risk, including LHFS, LHFI, IRLCs, trading securities, servicing rights, forward sales contracts, interest rate swap futures and put options. We refer to such forward sales contracts, interest rate swap futures and put options collectively as “Hedging Instruments.” As interest rates increase, our LHFS, LHFI and IRLCs generally decrease in value while our Hedging Instruments utilized to hedge against interest rate risk typically increase in value. Rising interest rates cause our expected mortgage loan servicing revenues to increase due to a decline in mortgage loan prepayments which extends the average life of our servicing portfolio and increases the value of our servicing rights. Conversely, as interest rates decrease, our LHFS, LHFI and IRLCs generally increase in value while our Hedging Instruments decrease in value. In a declining interest rate environment, borrowers tend to refinance their mortgage loans, which increases prepayment speeds and causes expected mortgage loan servicing revenues to decrease, which reduces the average life of our servicing portfolio and decreases the value of our servicing rights. Changes in fair value of our servicing rights are recorded as unrealized gains and losses in change in fair value of servicing rights, net, in our consolidated statements of operations.
Beginning in early 2022, long-term interest rates began a period of sustained increases. Although the Federal Reserve lowered interest rates by 100 basis points in late 2024, long-term interest rates, which fixed rate mortgages are linked with, have not materially decreased. In addition, continued uncertainty surrounding the impact of recent and potential governmental actions, such as tariffs, trade regulations, reductions of governmental employees and governmental spending, tax reform, and actions taken to address the debt ceiling, may cause long-term interest rates and mortgage rates to remain elevated, adversely
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impacting consumer sentiment and spending, which may lead to reduced demand for real estate, or have other negative impacts on the mortgage and real estate markets. The sustained increase in mortgage interest rates adversely impacted mortgage loan origination volumes, reducing demand for refinance mortgages and impacting affordability and qualification for homebuyers as well as due to a large number of existing homeowners benefiting from low-interest rates, adversely impacting purchase transaction supply.
Vision 2025, launched in July of 2022, was a critical factor in our successful navigation of unprecedented and challenging market conditions over the past three years. During the third quarter of 2024, we achieved profitability and successfully completed our Vision 2025 strategic plan. The subsequent launch of Project North Star builds on the strategic pillars of Vision 2025 by focusing on our goal of becoming the lifetime lending partner of choice for homeowners, growing our mortgage reach and capabilities, growing our servicing portfolio over the long-term, and investing in low touch, data-driven mortgage processing workflow to drive operating leverage During 2025, we anticipate continued market challenges, but we believe that the implementation of Project North Star will allow us to capture the benefit of higher market volumes while we continue to capitalize on our ongoing investments in operational efficiency to achieve sustainable profitability in a wide variety of operating environments.
Key Performance Indicators
We manage and assess the performance of our business by evaluating a variety of metrics. Selected key performance metrics include loan originations and sales and servicing metrics.
Loan Origination and Sales
Loan originations and sales by volume and units are a measure of how successful we are at growing sales of mortgage loan products and a metric used by management in an attempt to isolate how effectively we are performing. We believe that originations and sales are an indicator of our market penetration in mortgage loans and that this provides useful information because it allows investors to better assess the strength of our core business. Loan originations and sales include brokered loan originations not funded by us. We enter into IRLCs to originate loans, at specified interest rates, with customers who have applied for a mortgage and meet certain credit and underwriting criteria. We believe the volume of our IRLCs is another measure of our overall market share.
Gain on sale margin represents the total of (i) gain on origination and sale of loans, net, and (ii) origination income, net, divided by loan origination volume during period.
Pull-through weighted gain on sale margin represents the total of (i) gain on origination and sale of loans, net, and (ii) origination income, net, divided by the pull-through weighted rate lock volume. Pull-through weighted rate lock volume is the principal balance of loans subject to interest rate lock commitments, net of a pull-through factor for the loan funding probability.
Servicing Metrics
Servicing metrics include the unpaid principal balance of our servicing portfolio and servicing portfolio units, which represent the number of mortgage loan customers we service. We believe that the net additions to our portfolio and number of units are indicators of the growth of our mortgage loans serviced and our servicing income, but may be offset by sales of servicing rights.
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| Three Months Ended March 31, | ||||||||||||||||||||||||||
| (Dollars in thousands) | 2025 | 2024 | ||||||||||||||||||||||||
| IRLCs | $ | 7,637,987 | $ | 6,802,330 | ||||||||||||||||||||||
| IRLCs (units) | 28,784 | 22,086 | ||||||||||||||||||||||||
Pull-through weighted lock volume | $ | 5,418,685 | $ | 4,731,836 | ||||||||||||||||||||||
Pull-through weighted gain on sale margin | 3.55 | % | 2.74 | % | ||||||||||||||||||||||
| Loan originations by purpose: | ||||||||||||||||||||||||||
| Purchase | $ | 3,063,914 | $ | 3,296,273 | ||||||||||||||||||||||
| Refinance | 2,110,014 | 1,262,078 | ||||||||||||||||||||||||
| Total loan originations | $ | 5,173,928 | $ | 4,558,351 | ||||||||||||||||||||||
| Gain on sale margin | 3.72 | % | 2.84 | % | ||||||||||||||||||||||
| Loan originations (units) | 19,936 | 15,618 | ||||||||||||||||||||||||
| Licensed loan officers | 1,641 | 1,550 | ||||||||||||||||||||||||
| Loans sold: | ||||||||||||||||||||||||||
| Servicing retained | $ | 3,453,710 | $ | 2,986,541 | ||||||||||||||||||||||
| Servicing released | 1,713,963 | 1,452,812 | ||||||||||||||||||||||||
Total loans sold(1) | $ | 5,167,673 | $ | 4,439,353 | ||||||||||||||||||||||
| Loans sold (units) | 19,904 | 14,985 | ||||||||||||||||||||||||
| Servicing metrics | ||||||||||||||||||||||||||
| Total servicing portfolio (unpaid principal balance) | $ | 116,604,153 | $ | 142,337,251 | ||||||||||||||||||||||
| Total servicing portfolio (units) | 424,719 | 491,871 | ||||||||||||||||||||||||
60+ days delinquent ($)(2) | $ | 1,789,276 | $ | 1,445,489 | ||||||||||||||||||||||
| 60+ days delinquent (%) | 1.53 | % | 1.02 | % | ||||||||||||||||||||||
Servicing rights at fair value, net(3) | $ | 1,603,031 | $ | 1,970,164 | ||||||||||||||||||||||
Weighted average servicing fee (4) | 0.30 | % | 0.29 | % | ||||||||||||||||||||||
Multiple(4) (5) | 4.9 | 5.0 | ||||||||||||||||||||||||
(1)Original principal balance.
(2)The UPB of loans that are 60 or more days past due as of the dates presented, according to the contractual due date, or are in foreclosure.
(3)Amount represents the fair value of servicing rights, net of servicing liabilities, which are included in accounts payable, accrued expenses, and other liabilities in the consolidated balance sheets.
(4)Excludes other Non-Agency.
(5)Amounts represent the fair value of servicing rights, net, divided by the weighted average annualized servicing fee.
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Results of Operations
Three Months Ended March 31, 2025 Compared to Three Months Ended March 31, 2024
The following table sets forth our consolidated financial statement data for the three months ended March 31, 2025 compared to the three months ended March 31, 2024.
| Three Months Ended March 31, | Change $ | Change % | |||||||||||||||||||||||||||||||||||||||||||||||||||
| (Dollars in thousands) | 2025 | 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||
(Unaudited) | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| REVENUES: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Net interest income (expense) | $ | 3,308 | $ | (741) | $ | 4,049 | 546.4 | % | |||||||||||||||||||||||||||||||||||||||||||||
| Gain on origination and sale of loans, net | 166,376 | 116,060 | 50,316 | 43.4 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Origination income, net | 25,858 | 13,606 | 12,252 | 90.0 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Servicing fee income | 104,278 | 124,059 | (19,781) | (15.9) | |||||||||||||||||||||||||||||||||||||||||||||||||
| Change in fair value of servicing rights, net | (41,103) | (45,270) | 4,167 | 9.2 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Other income | 14,903 | 15,071 | (168) | (1.1) | |||||||||||||||||||||||||||||||||||||||||||||||||
| Total net revenues | 273,620 | 222,785 | 50,835 | 22.8 | |||||||||||||||||||||||||||||||||||||||||||||||||
| EXPENSES: | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Personnel expense | 150,161 | 134,318 | 15,843 | 11.8 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Marketing and advertising expense | 38,250 | 28,354 | 9,896 | 34.9 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Direct origination expense | 21,954 | 18,171 | 3,783 | 20.8 | |||||||||||||||||||||||||||||||||||||||||||||||||
| General and administrative expense | 44,132 | 57,746 | (13,614) | (23.6) | |||||||||||||||||||||||||||||||||||||||||||||||||
| Occupancy expense | 4,295 | 5,110 | (815) | (15.9) | |||||||||||||||||||||||||||||||||||||||||||||||||
| Depreciation and amortization | 7,666 | 9,443 | (1,777) | (18.8) | |||||||||||||||||||||||||||||||||||||||||||||||||
| Servicing expense | 10,000 | 8,261 | 1,739 | 21.1 | |||||||||||||||||||||||||||||||||||||||||||||||||
| Other interest expense | 43,265 | 46,547 | (3,282) | (7.1) | |||||||||||||||||||||||||||||||||||||||||||||||||
| Total expenses | 319,723 | 307,950 | 11,773 | 3.8 | |||||||||||||||||||||||||||||||||||||||||||||||||
Loss before income taxes | (46,103) | (85,165) | 39,062 | 45.9 | |||||||||||||||||||||||||||||||||||||||||||||||||
Income tax benefit | (5,407) | (13,660) | 8,253 | 60.4 | |||||||||||||||||||||||||||||||||||||||||||||||||
Net loss | (40,696) | (71,505) | 30,809 | 43.1 | |||||||||||||||||||||||||||||||||||||||||||||||||
Net loss attributable to noncontrolling interests | (18,800) | (37,250) | 18,450 | 49.5 | |||||||||||||||||||||||||||||||||||||||||||||||||
Net loss attributable to loanDepot, Inc. | $ | (21,896) | $ | (34,255) | $ | 12,359 | 36.1 | % | |||||||||||||||||||||||||||||||||||||||||||||
The decrease in net loss of $30.8 million was primarily due to a $50.8 million increase in total net revenues, offset by a $11.8 million increase in total expenses. The increase in total revenues was primarily due to an increase in gain on origination and sale of loans, net from increased volume and higher gain on sale margins and an increase in origination fee income. The increase in total expenses was driven by an increase in personnel expense as headcount increased, an increase in commission expense, an increase in marketing and advertising expense and an increase in direct origination expense consistent with the increase in funded volume of loans, offset by a decrease in general and administrative expense primarily as the result of expenses related to the Cybersecurity Incident in 2024.
Revenues
Net Interest Income. Net interest income primarily represents income earned on LHFS offset by interest expenses on amounts borrowed under warehouse and other lines of credit to finance these loans until sold. Our LHFS are generally tied to longer-term interest rates while our warehouse lines of credit are tied to short-term interest rates. Therefore, our net interest income is impacted by the term structure of market interest rates. The increase in net interest income was due to a $230.8
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million increase in the average balance of LHFS and a higher yield on LHFS, in addition to a decrease in cost of funds on warehouse lines, offset by a $214.2 million increase in average balance of warehouse lines.
Gain on Origination and Sale of Loans, Net. Gain on origination and sale of loans, net, was comprised of the following components:
| Three Months Ended March 31, | Change $ | Change % | ||||||||||||||||||||||||
| (Dollars in thousands) | 2025 | 2024 | ||||||||||||||||||||||||
Premium from loan sales | $ | 8,208 | $ | 20,195 | $ | (11,987) | (59.4) | % | ||||||||||||||||||
| Fair value of servicing rights additions | 52,686 | 48,375 | 4,311 | 8.9 | ||||||||||||||||||||||
Fair value gains (losses) on IRLC and LHFS | 54,766 | (13,018) | 67,784 | 520.7 | ||||||||||||||||||||||
Fair value (losses) gains from Hedging Instruments | (29,719) | 748 | (30,467) | (4,073.1) | ||||||||||||||||||||||
| Discount points, rebates and lender paid costs | 80,681 | 60,338 | 20,343 | 33.7 | ||||||||||||||||||||||
Provision loan loss obligation for loans sold | (246) | (578) | 332 | 57.4 | ||||||||||||||||||||||
| Total gain on origination and sale of loans, net | $ | 166,376 | $ | 116,060 | $ | 50,316 | 43.4 | % | ||||||||||||||||||
The $50.3 million or 43.4% increase in gain on origination and sale of loans, net was primarily driven by higher gain on sale margin and increased volumes.
Origination Income, Net. Origination income, net, reflects the fees that we earn, net of lender credits we pay, from originating loans. Origination income includes loan origination fees, processing fees, underwriting fees, and other fees collected from the borrower at the time of funding. Lender credits typically include rebates or concessions to borrowers for certain loan origination costs. The $12.3 million, or 90.0%, increase in origination income, net, was the result of a 13.5% increase in loan origination volumes and a 44.4% decrease in lender credits as a result of seasonal declines in JV origination volumes.
Servicing Fee Income. Servicing fee income reflects contractual servicing fees and ancillary and other fees (including late charges) related to the servicing of mortgage loans. The decrease of $19.8 million or 15.9% reflects a decrease in servicing fee collections due to a decrease of $27.4 billion in the average UPB of our servicing portfolio as the result of bulk sales completed in the first and second quarter of 2024.
Change in Fair Value of Servicing Rights, Net. Change in fair value of servicing rights, net includes (i) fair value gains or losses net of Hedging Instrument gains or losses; (ii) collection/realization of cash flows, which includes principal amortization and prepayments; and (iii) realized gains or losses on the sales of servicing rights. The increase of $4.2 million or 9.2% reflects an increased gain of $3.2 million in fair value, net of hedge and a $1.0 million decrease in the provision for losses related to bulk sales in the prior year.
Expenses
Personnel Expense. Personnel expense includes salaries, commissions, incentive compensation, benefits, and other employee costs. The $15.8 million or 11.8% increase in personnel expense was attributable to a $10.3 million increase in salaries and benefits related to increased headcount and severance expenses, and a $5.5 million volume-related increase in commissions. As of March 31, 2025, we had 4,547 employees compared to 4,188 employees as of March 31, 2024.
Marketing and Advertising Expense. The $9.9 million or 34.9% increase in marketing expense is primarily related to an increase in aggregate lead generation as part of our marketing strategy to cultivate online leads for increased purchase and cash-out refinance volume.
Direct Origination Expense. Direct origination expense reflects the unreimbursed portion of direct out-of-pocket expenses that we incur in the loan origination process, including underwriting, appraisal, credit report, loan document and other expenses paid to non-affiliates. The $3.8 million or 20.8% increase in direct origination expense was the result of an increase in loan originations and an industry-wide increase in pricing for credit reporting fees.
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General and Administrative Expense. General and administrative expense includes professional fees, data processing expense, communications expense, and other operating expenses. The $13.6 million or 23.6% decrease in general and administrative expense included an $8.3 million decrease in costs related to the Cybersecurity Incident in the prior year, a $2.7 million reduction in loss contingency expense, and a $1.5 million decrease in office and equipment expenses related to software subscriptions.
Other Interest Expense. The $3.3 million or 7.1% decrease in other interest expense is due to a $7.2 million decrease related to lower average balances of secured credit facilities, offset by a $2.5 million increase related to higher interest rates on outstanding Senior Notes after the debt exchange and $2.0 million related to other secured financings as a result of the loan securitization completed in the second quarter of 2024.
Balance Sheet Highlights
March 31, 2025 Compared to December 31, 2024
The following table sets forth our consolidated balance sheets as of the dates indicated:
| (Dollars in thousands) | March 31, 2025 | December 31, 2024 | Change $ | Change % | ||||||||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||||||||||
| ASSETS | ||||||||||||||||||||||||||||||||
| Cash and cash equivalents | $ | 371,480 | $ | 421,576 | $ | (50,096) | (11.9) | % | ||||||||||||||||||||||||
| Restricted cash | 74,247 | 105,645 | (31,398) | (29.7) | ||||||||||||||||||||||||||||
| Loans held for sale, at fair value | 2,765,417 | 2,603,735 | 161,682 | 6.2 | ||||||||||||||||||||||||||||
Loans held for investment, at fair value | 114,447 | 116,627 | (2,180) | (1.9) | ||||||||||||||||||||||||||||
| Derivative assets, at fair value | 49,762 | 44,389 | 5,373 | 12.1 | ||||||||||||||||||||||||||||
| Servicing rights, at fair value | 1,621,494 | 1,633,661 | (12,167) | (0.7) | ||||||||||||||||||||||||||||
| Trading securities, at fair value | 87,355 | 87,466 | (111) | (0.1) | ||||||||||||||||||||||||||||
| Property and equipment, net | 60,192 | 61,079 | (887) | (1.5) | ||||||||||||||||||||||||||||
| Operating lease right-of-use assets | 22,682 | 20,432 | 2,250 | 11.0 | ||||||||||||||||||||||||||||
| Loans eligible for repurchase | 1,022,924 | 995,398 | 27,526 | 2.8 | ||||||||||||||||||||||||||||
| Investments in joint ventures | 18,214 | 18,113 | 101 | 0.6 | ||||||||||||||||||||||||||||
Other assets | 208,500 | 235,907 | (27,407) | (11.6) | ||||||||||||||||||||||||||||
| Total assets | $ | 6,416,714 | $ | 6,344,028 | $ | 72,686 | 1.1 | % | ||||||||||||||||||||||||
| LIABILITIES & EQUITY | ||||||||||||||||||||||||||||||||
| Warehouse and other lines of credit | $ | 2,490,447 | $ | 2,377,127 | $ | 113,320 | 4.8 | % | ||||||||||||||||||||||||
| Accounts payable, accrued expenses and other liabilities | 368,276 | 379,439 | (11,163) | (2.9) | ||||||||||||||||||||||||||||
| Derivative liabilities, at fair value | 13,453 | 25,060 | (11,607) | (46.3) | ||||||||||||||||||||||||||||
| Liability for loans eligible for repurchase | 1,022,924 | 995,398 | 27,526 | 2.8 | ||||||||||||||||||||||||||||
| Operating lease liability | 34,821 | 33,190 | 1,631 | 4.9 | ||||||||||||||||||||||||||||
| Debt obligations, net | 2,017,495 | 2,027,203 | (9,708) | (0.5) | ||||||||||||||||||||||||||||
| Total liabilities | 5,947,416 | 5,837,417 | 109,999 | 1.9 | ||||||||||||||||||||||||||||
| Total equity | 469,298 | 506,611 | (37,313) | (7.4) | ||||||||||||||||||||||||||||
| Total liabilities and equity | $ | 6,416,714 | $ | 6,344,028 | $ | 72,686 | 1.1 | % | ||||||||||||||||||||||||
Cash and Cash Equivalents. The $50.1 million or 11.9% decrease in cash and cash equivalents relates to net losses, repurchased loans, and repayment of debt obligations, partially offset by a decrease in restricted cash and proceeds from net warehouse advances.
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Restricted Cash. Restricted cash was $74.2 million as of March 31, 2025 compared to $105.6 million as of December 31, 2024 representing an decrease of $31.4 million or 29.7%. The decrease was primarily the result of decreases in cash collateral associated with derivative activities and warehouse lines.
Loans Held for Sale, at Fair Value. Loans held for sale, at fair value, are primarily fixed and variable rate, 15- to 30-year term first-lien loans that are secured by residential property. The $161.7 million or 6.2% increase reflects $5.0 billion in loan originations and $252.6 million in repurchases, partially offset by $5.2 billion in loan sales and $17.4 million in principal payments.
Loans Eligible for Repurchase. Loans eligible for repurchase were $1.02 billion as of March 31, 2025, as compared to $995.4 million as of December 31, 2024, representing an increase of $27.5 million or 2.8%. The increase between periods was due to the increase in Ginnie Mae serviced loans that were 90 days or more delinquent at March 31, 2025, and was also attributable to the increase in our Ginnie Mae servicing portfolio.
Warehouse and Other Lines of Credit. The increase of $113.3 million or 4.8% is consistent with the increase in loans held for sale, at fair value during the three months ended March 31, 2025.
Derivative Liabilities, at Fair Value. The decrease of $11.6 million or 46.3% reflects a $10.7 million decrease in Hedging Instrument liabilities from higher interest rates and a $0.9 million decrease in IRLCs.
Equity. Total equity was $469.3 million and $506.6 million as of March 31, 2025 and December 31, 2024, respectively. The decrease was primarily attributed to a net loss of $40.7 million and the repurchase of treasury shares at cost of $0.6 million to net settle and withhold tax on vested RSUs, partially offset by stock-based compensation of $5.7 million.
Liquidity and Capital Resources
Liquidity
Our liquidity reflects our ability to meet current potential cash requirements. We forecast the need to have adequate liquid funds available to operate and grow our business. As of March 31, 2025, unrestricted cash and cash equivalents were $371.5 million and committed and uncommitted available capacity under our warehouse and other lines of credit was $1.2 billion.
Our primary sources of liquidity have been as follows: (i) funds obtained from our warehouse and other lines of credit; (ii) proceeds from debt obligations; (iii) proceeds received from the sale and securitization of loans; (iv) proceeds from the sale of servicing rights; (v) loan fees from the origination of loans; (vi) servicing fees; (vii) title and escrow fees from settlement services; (viii) real estate referral fees; and (ix) interest income from LHFS.
Our primary uses of funds for liquidity have included the following: (i) funding mortgage loans; (ii) funding loan origination costs; (iii) payment of warehouse line haircuts required at loan origination; (iv) payment of interest expense on warehouse and other lines of credit; (v) payment of interest expense under debt obligations; (vi) payment of operating expenses; (vii) repayment of warehouse and other lines of credit; (viii) repayment of debt obligations; (ix) funding of servicing advances; (x) margin calls on warehouse and other lines of credit or Hedging Instruments; (xi) repurchases of loans under representation and warranty breaches; and (xii) costs relating to servicing.
At this time, we currently believe that our cash on hand, as well as the sources of liquidity described above, will be sufficient to maintain our current loan operations, originations and capital commitments for the next twelve months. However, we will continue to review our liquidity needs in light of current and anticipated mortgage market conditions and we are taking various steps to align our cost structure with current and expected mortgage origination volumes.
Financial Covenants
Our lenders require us to comply with various financial covenants including tangible net worth, liquidity, leverage ratios and profitability. As of March 31, 2025, we were in full compliance with all financial covenants. Although these financial covenants limit the amount of indebtedness that we may incur and affect our liquidity through minimum cash reserve
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requirements, we believe that these covenants currently provide us with sufficient flexibility to operate our business and obtain the financing necessary to achieve that purpose.
Seller/Servicer Financial Requirements
As a seller and servicer, we are subject to minimum net worth, liquidity, and other financial requirements. In 2022, both FHFA and Ginnie Mae revised these requirements. Effective from September 30, 2023, minimum net worth requirements for FHFA and Ginnie Mae include a base of $2.5 million plus percentages of the seller/servicer’s residential first lien mortgage servicing UPB serviced for each agency and a percentage of other non-agencies servicing UPB. Base liquidity for the agencies depends on the remittance type and includes specific percentages of the seller/servicer's residential first lien mortgage servicing UPB for each agency, along with a percentage for other non-agencies servicing UPB. Large non-depositories require a liquidity buffer based on UPB for FHFA and Ginnie Mae. The capital ratio for FHFA and Ginnie Mae requires tangible net worth/total assets to be equal to or greater than 6% for both agencies. Effective from December 31, 2023, revised FHFA and Ginnie Mae seller-servicer minimum financial eligibility requirements include origination liquidity and third-party ratings. FHFA also requires an annual capital and liquidity plan effective March 31, 2024 and Ginnie Mae has implemented a risk-based capital requirement effective December 31, 2024. As of March 31, 2025, we were in compliance with these financial requirements.
Warehouse and Other Lines of Credit
We primarily finance mortgage loans through borrowings under our warehouse and other lines of credit. Under these facilities, we transfer specific loans to our counterparties and receive funds from them. Simultaneously, there is an agreement in place where the counterparties commit to transferring the loans back to us, either at the date the loans are sold or upon our request, and we provide the funds in return. We do not recognize these transfers as sales for accounting purposes. During the three months ended March 31, 2025, our loans remained on warehouse lines for an average of 22 days. Our warehouse facilities are generally short-term borrowings with original maturities of one year and our securitization facility is a two year term. We utilize both committed and uncommitted loan funding facilities and we evaluate our needs under these facilities based on forecasted volume of loan originations and sales. Our liquidity could be affected as lenders may reassess their exposure to the mortgage origination industry and potentially limit access to uncommitted mortgage warehouse financing or increase associated costs. Moreover, there may be reduced demand from investors to acquire our mortgage loans in the secondary market, further impacting our liquidity. Approximately 63% of the mortgage loans that we originated during the three months ended March 31, 2025 were sold in the secondary mortgage market either directly to Fannie Mae and Freddie Mac or securitized into MBS guaranteed by Ginnie Mae. We also sell loans to many private investors.
As of March 31, 2025, we maintained revolving lines of credit with nine counterparties providing warehouse and securitization facilities with borrowing capacity totaling $3.7 billion of which $1.0 billion was committed. Our $3.7 billion of capacity as of March 31, 2025 was comprised of $3.4 billion with maturities staggered throughout 2025 and a $300.0 million securitization facility that matures in September 2026. As of March 31, 2025, we had $2.5 billion of borrowings outstanding and $1.2 billion of additional availability under our facilities. Warehouse and other lines of credit are further discussed in Note 9- Warehouse and Other Lines of Credit of the Notes to Consolidated Financial Statements contained in Item 1.
When we draw on our warehouse and securitization facilities we must pledge eligible loan collateral. Our warehouse line providers require us to make a capital investment, or “haircut.” upon financing the loan, which is generally based on product types and the market value of the loans. The haircuts are normally recovered from sales proceeds. As of March 31, 2025, we had a total of $8.7 million in restricted cash posted as collateral with our warehouse and securitization facilities, of which $4.8 million was the minimum requirement.
Debt Obligations
MSR facilities and Term Notes provide financing for our servicing portfolio investments. As of March 31, 2025, MSR facilities secured by Fannie Mae and Freddie Mac MSRs had an outstanding balance of $569.6 million, secured by MSRs totaling $905.4 million. As of March 31, 2025, our Ginnie Mae MSR facility had an outstanding balance of $198.9 million in variable funding notes and $200.0 million in Term Notes, secured by Ginnie Mae MSRs totaling $627.5 million.
Securities financing facilities provide financing for the retained interest securities associated with our securitizations. As of March 31, 2025 there were outstanding securities financing facilities of $81.2 million, secured by trading securities with a fair value of $87.4 million.
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Servicing advance facilities provide financing for our servicing agreements. As servicer, we are required to fulfill contractual obligations such as principal and interest payments for certain investor as well as taxes, insurance, foreclosure costs, and other necessities to preserve the serviced assets. For GSE-backed mortgages, this obligation extends up to four months, and for other government agency-backed mortgages, it may extend even longer, especially for clients under forbearance plans. The size of servicing advance balances is influenced by delinquency rates and prepayment speeds. As of March 31, 2025 the outstanding balance on our servicing advance facilities was $57.1 million secured by servicing advance receivables totaling $79.7 million.
Other secured financings as of March 31, 2025 consisted of securitization debt of $95.0 million, net of $7.1 million in discount and $1.1 million in deferred financing costs and related to the securitization of a pool of residential mortgage loans held by a VIE. Consolidated VIEs are further discussed in Note 8 - Variable Interest Entities of the Notes to Consolidated Financial Statements contained in Item 1.
Unsecured debt obligations as of March 31, 2025 consisted of Senior Notes totaling $815.6 million net of $8.3 million of deferred financing costs and a discount of $35.9 million. Periodically, and in accordance with applicable laws, and regulations, we may take actions to reduce or repurchase our debt. These actions can include redemptions, tender offers, cash purchases, prepayments, refinancing, exchange offers, open market or privately-negotiated transactions. The decision on amount of debt to be reduced or repurchased depends on several factors, including market conditions, trading levels of our debt, our cash positions, compliance with debt covenants, and other relevant considerations. During the second quarter of 2024, we repurchased $478.0 million of 2025 Senior Notes in exchange for $340.6 million of 2027 Senior Notes and cash of $185.0 million resulting in a loss on extinguishment of debt of $5.7 million. Debt obligations are further discussed in Note 10- Debt Obligations of the Notes to Consolidated Financial Statements contained in Item 1.
Dividends and Distributions
As part of our balance sheet and capital management strategies, we suspended our regular quarterly dividend effective March 31, 2022 and for the foreseeable future.
Cash dividends are subject to the discretion of our board of directors and our compliance with applicable law, and depend on, among other things, our results of operations, financial condition, level of indebtedness, capital requirements, contractual restrictions, including the satisfaction of our obligations under the TRA, restrictions in our debt agreements, business prospects and other factors that our board of directors may deem relevant. Our ability to pay dividends depends on our receipt of cash dividends from our operating subsidiaries, which may further restrict our ability to pay dividends as a result of the laws of their jurisdiction of organization or agreements of our subsidiaries, including agreements governing our indebtedness. Future agreements may also limit our ability to pay dividends.
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Contractual Obligations and Commitments
Our estimated contractual obligations as of March 31, 2025 are as follows:
| Payments Due by Period | ||||||||||||||||||||||||||||||||
| (Dollars in thousands) | Total | Less than 1 Year | 1-3 years | 3-5 Years | More than 5 Years | |||||||||||||||||||||||||||
| Warehouse and other lines of credit | $ | 2,490,447 | $ | 2,190,447 | $ | 300,000 | $ | — | $ | — | ||||||||||||||||||||||
Debt obligations (1) | ||||||||||||||||||||||||||||||||
| Secured credit facilities | 912,020 | 354,823 | 557,197 | — | — | |||||||||||||||||||||||||||
| Term Notes | 200,000 | 200,000 | — | — | — | |||||||||||||||||||||||||||
| Senior Notes | 859,816 | 19,795 | 304,738 | 535,283 | — | |||||||||||||||||||||||||||
Other secured financings(2) | 103,207 | — | — | — | 103,207 | |||||||||||||||||||||||||||
Operating lease obligations (3) | 38,855 | 14,842 | 21,778 | 2,235 | — | |||||||||||||||||||||||||||
| Naming and promotional rights agreements | 44,403 | 15,903 | 12,000 | 12,000 | 4,500 | |||||||||||||||||||||||||||
| Total contractual obligations | $ | 4,648,748 | $ | 2,795,810 | $ | 1,195,713 | $ | 549,518 | $ | 107,707 | ||||||||||||||||||||||
(1) Amounts exclude deferred financing costs.
(2) The stated final maturity date is April 25, 2054. The Company, as the issuer, has the option to redeem the notes on or subsequent to the optional redemption date of April 25, 2026, but it is not required.
(3) Represents lease obligations for office space under non-cancelable operating lease agreements.
In addition to the above contractual obligations, we also have interest rate lock commitments and forward sale contracts. Commitments to originate loans do not necessarily reflect future cash requirements as some commitments are expected to expire without being drawn upon and, therefore, those commitments have been excluded from the table above. Refer to Note 6 - Derivative Financial Instruments and Hedging Activities and Note 15 - Commitments & Contingencies of the Notes to Consolidated Financial Statements contained in Item 1 for further discussion on derivatives and other contractual commitments. At this time, we currently believe that our cash on hand, as well as the sources of liquidity described above, will be sufficient to fund our contractual obligations.
Off-Balance Sheet Arrangements
As of March 31, 2025, we were party to mortgage loan participation purchase and sale agreements, pursuant to which we have access to uncommitted facilities that provide liquidity for recently sold MBS up to the MBS settlement date. These facilities, which we refer to as gestation facilities, are a component of our financing strategy and are off-balance sheet arrangements provided by certain warehouse lenders.
Critical Accounting Policies and Estimates
We prepare our consolidated financial statements in accordance with GAAP, which requires us to make judgments, estimates and assumptions that affect: (i) the reported amounts of our assets and liabilities; (ii) the disclosure of our contingent assets and liabilities at the end of each reporting period; and (iii) the reported amounts of revenues and expenses during each reporting period. We continually evaluate these judgments, estimates and assumptions based on our own historical experience, knowledge and assessment of current business and other conditions and our expectations regarding the future based on available information which together form our basis for making judgments about matters that are not readily apparent from other sources. Since the use of estimates is an integral component of the financial reporting process, our actual results could differ from those estimates. Some of our accounting policies require a higher degree of judgment than others in their application. Our accounting policies are described in Note 1 to the consolidated financial statements included in the Company's 2024 Form 10-K. At December 31, 2024, the most critical of these significant accounting policies were policies related to the fair value of loans held for sale, servicing rights, and derivative financial instruments. As of the date of this report, there have been no significant changes to the Company's critical accounting policies or estimates.
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When reading our consolidated financial statements, you should consider our selection of critical accounting policies, the judgment and other uncertainties affecting the application of such policies and the sensitivity of reported results to changes in conditions and assumptions.
Reconciliation of Non-GAAP Measures
To provide investors with information in addition to our results as determined by GAAP, we disclose certain non-GAAP measures to assist investors in evaluating our financial results. We believe these non-GAAP measures provide useful information to investors regarding our results of operations because each measure assists both investors and management in analyzing and benchmarking the performance and value of our business. They facilitate company-to-company operating performance comparisons by backing out potential differences caused by variations in hedging strategies, changes in valuations, capital structures (affecting interest expense on non-funding debt), taxation, the age and book depreciation of facilities (affecting relative depreciation expense), and other cost or benefit items which may vary for different companies for reasons unrelated to operating performance. These non-GAAP measures include our Adjusted Total Revenue, Adjusted Net Income (Loss), Adjusted Diluted Weighted Average Shares Outstanding, and Adjusted EBITDA (LBITDA). We exclude from these non-GAAP financial measures the change in fair value of MSRs, gains (losses) from the sale of MSRs, and related hedging gains and losses that represent realized and unrealized adjustments resulting from changes in valuation, mostly due to changes in market interest rates, and are not indicative of the Company’s operating performance or results of operation. Beginning in the second quarter of 2024, we began to include the gains (losses) from the sale of MSRs in valuation changes in servicing rights, net of hedging gains and losses to appropriately capture all valuation changes in MSRs up to and including the sales date. Prior periods have been revised to conform with this new presentation. We have excluded expenses directly related to the Cybersecurity Incident, net of insurance recoveries during fiscal 2024, such as costs to investigate and remediate the Cybersecurity Incident, the costs of customer notifications and identity protection, and professional fees, including legal expenses, litigation settlement costs, and commission guarantees. We also exclude stock-based compensation expense, which is a non-cash expense, gains or losses on extinguishment of debt and disposal of fixed assets, non-cash goodwill impairment, and other impairment charges to intangible assets and operating lease right-of-use assets, as well as certain costs associated with our restructuring efforts, as management does not consider these costs to be indicative of our performance or results of operations. Adjusted EBITDA (LBITDA) includes interest expense on funding facilities, which are recorded as a component of “net interest income (expense),” as these expenses are a direct operating expense driven by loan origination volume. By contrast, interest expense on our non-funding debt is a function of our capital structure and is therefore excluded from Adjusted EBITDA (LBITDA). Adjustments for income taxes are made to reflect historical results of operations on the basis that it was taxed as a corporation under the Internal Revenue Code, and therefore subject to U.S. federal, state and local income taxes. Adjustments to Diluted Weighted Average Shares Outstanding assumes the pro forma conversion of weighted average Class C common stock to Class A common stock. These non-GAAP measures have limitations as analytical tools, and should not be considered in isolation or as a substitute for revenue, net income, or any other operating performance measure calculated in accordance with GAAP, and may not be comparable to a similarly titled measure reported by other companies. Some of these limitations are:
•They do not reflect every cash expenditure, future requirements for capital expenditures or contractual commitments;
•Adjusted EBITDA (LBITDA) does not reflect the significant interest expense or the cash requirements necessary to service interest or principal payment on our debt;
•Although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced or require improvements in the future, and Adjusted Total Revenue, Adjusted Net Income (Loss), and Adjusted EBITDA (LBITDA) do not reflect any cash requirement for such replacements or improvements; and
•They are not adjusted for all non-cash income or expense items that are reflected in our statements of cash flows.
Because of these limitations, Adjusted Total Revenue, Adjusted Net Income (Loss), Adjusted Diluted Weighted Average Shares Outstanding, and Adjusted EBITDA (LBITDA) are not intended as alternatives to total revenue, net income (loss), net income (loss) attributable to the Company, or Diluted Earnings (Loss) Per Share or as an indicator of our operating performance and should not be considered as measures of discretionary cash available to us to invest in the growth of our business or as measures of cash that will be available to us to meet our obligations. We compensate for these limitations by using Adjusted Total Revenue, Adjusted Net Income (Loss), Adjusted Diluted Weighted Average Shares Outstanding, and Adjusted EBITDA (LBITDA) along with other comparative tools, together with U.S. GAAP measurements, to assist in the evaluation of operating performance. See below for a reconciliation of these non-GAAP measures to their most comparable U.S. GAAP measures.
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Reconciliation of Total Revenue to Adjusted Total Revenue (Dollars in thousands) (Unaudited): | Three Months Ended | |||||||||||||||||||||||||
| March 31, 2025 | March 31, 2024 | |||||||||||||||||||||||||
| Total net revenue | $ | 273,620 | $ | 222,785 | ||||||||||||||||||||||
Valuation changes in servicing rights, net of hedging gains and losses(1) | 4,823 | 8,031 | ||||||||||||||||||||||||
| Adjusted total revenue | $ | 278,443 | $ | 230,816 | ||||||||||||||||||||||
(1)Represents the change in the fair value of servicing rights due to changes in valuation inputs or assumptions, net of gains or losses from derivatives hedging servicing rights. Beginning in the second quarter of 2024, we began to include the gains (losses) from the sale of MSRs in valuation changes in servicing rights, net of hedging gains and losses to appropriately capture all valuation changes in MSRs up to and including the sales date. Prior periods have been revised to conform with this new presentation. Refer to Note 5 - Servicing Rights, at Fair Value.
Reconciliation of Net Loss to Adjusted Net Loss (Dollars in thousands) (Unaudited): | Three Months Ended | |||||||||||||||||||||||||
| March 31, 2025 | March 31, 2024 | |||||||||||||||||||||||||
Net loss attributable to loanDepot, Inc. | $ | (21,896) | $ | (34,255) | ||||||||||||||||||||||
Net loss from the pro forma conversion of Class C common stock to Class A common stock(1) | (18,800) | (37,250) | ||||||||||||||||||||||||
Net loss | (40,696) | (71,505) | ||||||||||||||||||||||||
Adjustments to the benefit for income taxes(2) | 4,901 | 9,774 | ||||||||||||||||||||||||
Tax-effected net loss | (35,795) | (61,731) | ||||||||||||||||||||||||
Valuation changes in servicing rights, net of hedging gains and losses(3) | 4,823 | 8,031 | ||||||||||||||||||||||||
| Stock-based compensation expense | 5,716 | 4,855 | ||||||||||||||||||||||||
Restructuring charges(4) | 2,121 | 3,961 | ||||||||||||||||||||||||
Cybersecurity incident(5) | 788 | 14,698 | ||||||||||||||||||||||||
Loss (gain) on disposal of fixed assets | 17 | (29) | ||||||||||||||||||||||||
Other impairment (recovery)(6) | 5 | (1) | ||||||||||||||||||||||||
Tax effect of adjustments(7) | (3,010) | (7,928) | ||||||||||||||||||||||||
Adjusted net loss | $ | (25,335) | $ | (38,144) | ||||||||||||||||||||||
(1)Reflects net loss to Class A common stock and Class D common stock from the pro forma exchange of Class C common stock.
(2)loanDepot, Inc. is subject to federal, state and local income taxes. Adjustments to the benefit for income taxes reflect the income tax rates below, and the pro forma assumption that loanDepot, Inc. owns 100% of LD Holdings.
| Three Months Ended | ||||||||||||||||||||||||||
| March 31, 2025 | March 31, 2024 | |||||||||||||||||||||||||
| Statutory U.S. federal income tax rate | 21.00 | % | 21.00 | % | ||||||||||||||||||||||
| State and local income taxes (net of federal benefit) | 5.07 | 5.24 | ||||||||||||||||||||||||
| Effective income tax rate | 26.07 | % | 26.24 | % | ||||||||||||||||||||||
(3)Represents the change in the fair value of servicing rights due to changes in valuation inputs or assumptions, net of gains or losses from derivatives hedging servicing rights, and gains (losses) from the sale of MSRs. Beginning in the second quarter of 2024, we began to include the gains (losses) from the sale of MSRs in valuation changes in servicing rights, net of hedging gains and losses to
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appropriately capture all valuation changes in MSRs up to and including the sales date. Prior periods have been revised to conform with this new presentation. Refer to Note 5 - Servicing Rights, at Fair Value.
(4)Reflects employee severance expense and professional services associated with restructuring efforts.
(5)Represents expenses directly related to the Cybersecurity Incident, net of insurance recoveries during fiscal 2024, including costs to investigate and remediate the Cybersecurity Incident, the costs of customer notifications and identity protection, professional fees including legal expenses, litigation settlement costs, and commission guarantees.
(6)Represents lease impairment on corporate and retail locations.
(7)Amounts represent the income tax effect using the aforementioned effective income tax rates, excluding certain discrete tax items.
Reconciliation of Diluted Weighted Average Shares Outstanding to Adjusted Diluted Weighted Average Shares Outstanding (Dollars in thousands except per share) (Unaudited) | Three Months Ended | |||||||||||||||||||||||||
| March 31, 2025 | March 31, 2024 | |||||||||||||||||||||||||
| Share Data: | ||||||||||||||||||||||||||
| Diluted weighted average shares of Class A and Class D common stock outstanding | 200,792,570 | 324,679,090 | ||||||||||||||||||||||||
Assumed pro forma conversion of weighted average Class C common stock to Class A common stock(1) | 127,290,603 | — | ||||||||||||||||||||||||
| Adjusted diluted weighted average shares outstanding | 328,083,173 | 324,679,090 | ||||||||||||||||||||||||
(1)Reflects the assumed pro forma exchange and conversion of Class C common stock.
Reconciliation of Net Loss to Adjusted EBITDA (Dollars in thousands) (Unaudited): | Three Months Ended | |||||||||||||||||||||||||
| March 31, 2025 | March 31, 2024 | |||||||||||||||||||||||||
Net loss | $ | (40,696) | $ | (71,505) | ||||||||||||||||||||||
Interest expense — non-funding debt(1) | 43,265 | 46,547 | ||||||||||||||||||||||||
Income tax benefit | (5,407) | (13,660) | ||||||||||||||||||||||||
| Depreciation and amortization | 7,666 | 9,443 | ||||||||||||||||||||||||
Valuation changes in servicing rights, net of hedging gains and losses(2) | 4,823 | 8,031 | ||||||||||||||||||||||||
| Stock-based compensation expense | 5,716 | 4,855 | ||||||||||||||||||||||||
Restructuring charges(3) | 2,121 | 3,961 | ||||||||||||||||||||||||
Cybersecurity incident(4) | 788 | 14,698 | ||||||||||||||||||||||||
Loss (gain) on disposal of fixed assets | 17 | (29) | ||||||||||||||||||||||||
Other impairment (recovery)(5) | 5 | (1) | ||||||||||||||||||||||||
Adjusted EBITDA | $ | 18,298 | $ | 2,340 | ||||||||||||||||||||||
(1)Represents other interest expense, which includes gain or loss on extinguishment of debt and amortization of debt issuance costs and debt discount, in the Company’s consolidated statements of operations.
(2)Represents the change in the fair value of servicing rights due to changes in valuation inputs or assumptions, net of gains or losses from derivatives hedging servicing rights, and gains (losses) from the sale of MSRs. Beginning in the second quarter of 2024, we began to include the gains (losses) from the sale of MSRs in valuation changes in servicing rights, net of hedging gains and losses to appropriately capture all valuation changes in MSRs up to and including the sales date. Prior periods have been revised to conform with this new presentation. Refer to Note 5 - Servicing Rights, at Fair Value.
(3)Reflects employee severance expense and professional services associated with restructuring efforts.
(4)Represents expenses directly related to the Cybersecurity Incident, net of insurance recoveries during fiscal 2024, including costs to investigate and remediate the Cybersecurity Incident, the costs of customer notifications and identity protection, professional fees including legal expenses, litigation settlement costs, and commission guarantees.
(5)Represents lease impairment on corporate and retail locations.
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Item 3. Quantitative and Qualitative Disclosures About Market Risk
In the normal course of business, we are exposed to various risks which can affect our business, results and operations. The primary market risks to which we are exposed include interest rate risk, credit risk, prepayment risk and inflation risk.
We manage our interest rate risk and the price risk associated with changes in interest rates pursuant to the terms of an Interest Rate Risk Management Policy which (i) quantifies our interest rate risk exposure, (ii) lists the derivatives eligible for use as Hedging Instruments and (iii) establishes risk and liquidity tolerances.
Interest Rate Risk
Our principal market exposure is to interest rate risk as our business is subject to variability in results of operations due to fluctuations in interest rates. We anticipate that interest rates will remain our primary benchmark for market risk for the foreseeable future. Changes in interest rates affect our assets and liabilities measured at fair value, including LHFS, IRLCs, servicing rights and Hedging Instruments. In a declining interest rate environment, we expect higher loan origination volumes, higher loan margins, increases in the value of our LHFS and IRLCs, and decreases in the value of our Hedging Instruments and servicing rights. In a rising interest rate environment, we expect lower loan origination volumes, lower loan margins, decreases in the value of our LHFS and IRLCs, and increases in the value of our Hedging Instruments and servicing rights. The interaction between the results of operations of our various activities is a core component of our overall interest rate risk strategy.
IRLCs represent an agreement to extend credit to a potential customer, whereby the interest rate on the loan is set prior to funding. Both IRLCs and LHFS, are subject to changes in interest rates from the date of the commitment through the sale of the loan into the secondary market. Accordingly, we are exposed to interest rate risk and related price risk during the period from the date of the lock commitment through (i) the lock commitment cancellation or expiration date, or (ii) the date of sale into the secondary mortgage market. The average term for outstanding interest rate lock commitments at March 31, 2025 was 34 days; and our average holding period of the loan from funding to sale was 35 days for the three months ended March 31, 2025.
We manage the interest rate risk associated with our outstanding IRLCs, LHFS and servicing rights by entering into Hedging Instruments. Management expects these Hedging Instruments will experience changes in fair value opposite to those of the IRLCs, LHFS, and servicing rights thereby reducing earnings volatility. We take into account various factors and strategies in determining the portion of IRLCs, LHFS, and servicing rights to economically hedge. Our expectation of how many of our IRLCs will ultimately close is a key factor in determining the notional amount of Hedging Instruments used in hedging the position.
Credit Risk
We are subject to credit risk in connection with our originating, financing, selling, and servicing residential mortgage loans. Credit risk refers to the ability of each individual borrower underlying our loans, mortgage servicing rights, and trading securities, to make required interest and principal payments on the scheduled due dates. If delinquencies increase, the value of our loans, mortgage servicing rights, and trading securities may decrease and the amount of servicer advances we are required to make related to our mortgage servicing rights will increase. We believe credit risk is mitigated through stringent underwriting guidelines in our loan origination process and is primarily determined by the borrowers’ credit profiles and loan characteristics. Credit risk is influenced by general economic factors including interest rates, housing prices, and unemployment rates which could impact the borrowers’ ability to make payments on their loans.
While our contracts vary, we provide representations and warranties to purchasers and insurers of the mortgage loans sold that typically are in place for the life of the loan. In the event of a breach of these representations and warranties, we may be required to repurchase a mortgage loan or indemnify the purchaser, and any subsequent loss on the mortgage loan may be borne by us. The representations and warranties require adherence to applicable origination and underwriting guidelines (including those of Fannie Mae, Freddie Mac, and Ginnie Mae), including but not limited to the validity of the lien securing the loan, property eligibility, borrower credit, income and asset requirements, and compliance with applicable federal, state and local law.
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We record a provision for losses relating to such representations and warranties as part of our loan sale transactions. The level of the liability for losses from representations and warranties is difficult to estimate and requires considerable management judgment. The level of loan repurchase losses is dependent on economic factors, trends in property values, investor repurchase demand strategies, and other external conditions, including interest rates, that may change over the lives of the underlying loans. We evaluate the adequacy of our liability for losses from representations and warranties based on our loss experience and our assessment of incurred losses relating to loans that we have previously sold and which remain outstanding at the balance sheet date. As our portfolio of loans sold subject to representations and warranties grows and as economic fundamentals change, such adjustments can be material. However, we believe that our current estimates adequately approximate the losses incurred on our sold loans subject to such representations and warranties.
Additionally, we are exposed to credit risk associated with our borrowers, counterparties, and other significant vendors. Our ability to operate profitably is dependent on both our access to capital to finance our assets and our ability to profitably originate, sell, and service loans. Our ability to hold loans pending sale and/or securitization depends, in part, on the availability to us of adequate financing lines of credit at suitable interest rates and favorable advance rates. In general, we manage such risk by selecting only counterparties that we believe to be financially strong, dispersing the risk among multiple counterparties, placing contractual limits on the amount of unsecured credit extended to any single counterparty and entering into netting agreements with the counterparties, as appropriate. During the three months ended March 31, 2025 and 2024, we incurred no losses due to nonperformance by any of our counterparties.
Prepayment Risk
Prepayment risk is affected by interest rates (and their inherent risk) and borrowers’ actions relative to their underlying loans. To the extent that the actual prepayment speed on the loans underlying our servicing rights differs from what we projected when we initially recognized them and when we measured fair value as of the end of each reporting period, the carrying value of our investment in servicing rights will be affected. In general, an increase in prepayment expectations will decrease our estimates of the fair value of the servicing right, thereby reducing expected servicing income. We monitor the servicing portfolio to identify potential refinancings and the impact that would have on associated servicing rights.
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Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our CEO and CFO, has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as of the end of the period covered by this Form 10-Q. Based on such evaluation, our CEO and CFO have concluded that as of March 31, 2025, our disclosure controls and procedures are designed at a reasonable assurance level and are effective to provide reasonable assurance that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the rules and forms of the SEC, and that such information is accumulated and communicated to our management, including our CEO and CFO, as appropriate, to allow timely decisions regarding required disclosure.
Changes in Internal Control over Financial Reporting
There were no changes in our internal control over financial reporting identified in management’s evaluation pursuant to Rules 13a-15(d) or 15d-15(d) of the Exchange Act during the period covered by this Form 10-Q that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Limitations on Effectiveness of Controls and Procedures
In designing and evaluating the disclosure controls and procedures and internal control over financial reporting, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply judgment in evaluating the benefits of possible controls and procedures relative to their costs.
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PART II. OTHER INFORMATION
Item 1. Legal Proceedings
From time to time, we and certain of our subsidiaries are involved in various legal and regulatory matters that arise in connection with the conduct of our business. For a further discussion of our material legal proceedings, see Note 15 - Commitments and Contingencies of the Notes to Consolidated Financial Statements included in “Item 1 Financial Statements.”
Item 1A. Risk Factors
There have been no material changes in the risk factors discussed under Part I. "Item 1A. Risk Factors" of our 2024 Form 10-K filed with the SEC on March 13, 2025.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Shares of the Company's Class B common stock or Class C common stock may each be converted, together with a corresponding Holdco Unit, as applicable, at any time and from time to time at the option of the holder of such share of Class B common stock or Class C common stock, as applicable, for one fully paid and non-assessable share of Class A common stock. Each share of the Company’s Class D common stock may be converted into one fully paid and non-assessable share of Class A common stock at any time at the option of the holder of such share of Class D common stock. There is no cash or other consideration paid by the holder converting such shares and, accordingly, there is no cash or other consideration received by the Company. The shares of Class A common stock issued by the Company in such conversions are exempt from registration pursuant to Section 3(a)(9) of the Securities Act.
On January 1, 2025, we issued to stockholders 4,142,763 shares of Class A common stock upon the conversion of the same number of shares of our Class C common stock and corresponding Holdco Units held by such stockholders.
On February 3, 2025, we issued to stockholders 53,860 shares of Class A common stock upon the conversion of the same number of shares of our Class C common stock and corresponding Holdco Units held by such stockholders.
On March 3, 2025, we issued to stockholders 1,053,861 shares of Class A common stock upon the conversion of the same number of shares of our Class C common stock and corresponding Holdco Units held by such stockholders.
Item 3. Defaults Upon Senior Securities
Not applicable.
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information
During the quarter ended March 31, 2025, no director or officer (as defined in Rule 16a-1(f) under the Exchange Act) of the Company adopted terminated
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Item 6. Exhibits
The following documents are filed as a part of this report:
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| 101.INS | Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. | ||||
| 101.SCH | Inline XBRL Taxonomy Extension Schema Document. | ||||
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document. | ||||
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document. | ||||
| 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase Document. | ||||
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document. | ||||
| 104.0 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). | ||||
* Filed herewith
** Furnished herewith
# Certain portions of this exhibit have been redacted pursuant to Item 601(b)(10) of Regulation S-K.
+ Management contract or compensatory plan or arrangement.
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| LOANDEPOT, INC. | ||||||||
Dated: May 8, 2025 | By: | /s/ Frank Martell | ||||||
| Name: | Frank Martell | |||||||
| Title: | President and Chief Executive Officer | |||||||
Dated: May 8, 2025 | By: | /s/ David Hayes | ||||||
| Name: | David Hayes | |||||||
| Title: | Chief Financial Officer | |||||||
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EXHIBIT 31.1
CERTIFICATION BY CHIEF EXECUTIVE OFFICER PURSUANT TO RULE 13a-14(a) AND 15d-14(a) UNDER THE EXCHANGE ACT
I, Frank Martell, certify that:
1.I have reviewed this Quarterly Report on Form 10-Q of loanDepot, Inc.;
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a.designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b.designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c.evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d.disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
a.all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b.any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
/s/ Frank Martell
Frank Martell
Chief Executive Officer, President and Director
Date: May 8, 2025
EXHIBIT 31.2
CERTIFICATION BY CHIEF FINANCIAL OFFICER PURSUANT TO RULE 13a-14(a) AND 15d-14(a) UNDER THE EXCHANGE ACT
I, David Hayes, certify that:
1.I have reviewed this Quarterly Report on Form 10-Q of loanDepot, Inc.;
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a.designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b.designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c.evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d.disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
a.all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b.any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
/s/ David Hayes
David Hayes
Chief Financial Officer
Date: May 8, 2025
Exhibit 32.1
Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350 as Adopted
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, I, Frank Martell, Chief Executive Officer of loanDepot, Inc. (the “Company”), hereby certify, that, to my knowledge:
1.the Quarterly Report on Form 10-Q for the period ended March 31, 2025 (the “Report”) of the Company fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m(a) or 78o(d)); and
2.the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
Date: May 8, 2025
| /s/ Frank Martell | ||||||||
| Frank Martell | ||||||||
| Chief Executive Officer | ||||||||
| (Principal Executive Officer) | ||||||||
Exhibit 32.2
Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350 as Adopted
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, I, David Hayes, Chief Financial Officer of loanDepot, Inc. (the “Company”), hereby certify, that, to my knowledge:
1.the Quarterly Report on Form 10-Q for the period ended March 31, 2025 (the “Report”) of the Company fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m(a) or 78o(d)); and
2.the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
Date: May 8, 2025
| /s/ David Hayes | ||||||||
| David Hayes | ||||||||
| Chief Financial Officer | ||||||||
| (Principal Financial Officer) | ||||||||