LoanDepot : Quarterly Report for Quarter Ending June 30, 2026 (Form 10-Q)

About this update from Loandepot, Inc.

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 or outcomes 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 2025 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, home equity lines of credit, or closed-end seconds. Our mortgage loan refinancing volumes (and to a lesser degree, our purchase volumes), balance sheet, 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. This 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. During the first half of 2026, mortgage rates remained elevated and, according to FHLMC Primary Mortgage Market Survey, reached a one-year high of 6.66% at the end of July 2026, partly due to geopolitical tensions stemming from the conflict in Iran and higher energy prices driving inflation concerns. The rate environment continued to negatively affect housing affordability and loan qualification of homebuyers, contributed to the "lock-in" effect of borrowers that secured lower long- term interest rates during 2020 and 2021 giving rise to a lack of supply of homes available for sale, and decreased demand for refinancing, taken together resulting in lower demand for mortgage loans. In April 2026 we announced our partnership with Figure Technology Solutions ("Figure") as part of our strategy to meaningfully accelerate our digital transformation and as a component of our planned return to a market leading position. As part of the partnership, we integrated Figure's proprietary credit and loan underwriting engine into our own proprietary mello® technology platform and point of sale system, enabling us to seamlessly offer a variety of innovative express path home loan products to our customers. Our 5x5 HomeLoan powered by Figure, which delivers approval in as little as five minutes and funding in as few as five days, brings real value to those seeking smart, seamless, and convenient solutions to their financing needs. Integrating this platform across our channels, helped to lower our cost of production, improve the customer experience, close more loans more quickly and contributed to a 26% increase in total unit volume compared to the second quarter of 2025. 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. Three Months Ended June 30, Six Months Ended June 30, (Dollars in thousands) 2026 2025 2026 2025 IRLCs $ 8,994,216 $ 8,560,699 $ 20,439,710 $ 16,198,686 IRLCs (units) 31,630 31,724 70,075 60,508 Pull-through weighted lock volume $ 6,632,371 $ 6,348,060 $ 14,906,562 $ 11,766,745 Pull-through weighted gain on sale margin 3.45 % 3.30 % 3.04 % 3.42 % Loan originations by purpose: Purchase $ 4,560,891 $ 4,263,771 $ 7,720,142 $ 7,327,685 Refinance 3,432,821 2,470,758 7,932,189 4,580,772 Total loan originations $ 7,993,712 $ 6,734,529 $ 15,652,331 $ 11,908,457 Loan originations (units) 30,702 24,307 55,251 44,243 Gain on sale margin 2.86 % 3.11 % 2.90 % 3.38 % Licensed loan officers 1,821 1,546 1,821 1,546 Headcount 4,626 4,509 4,626 4,509 Loans sold: Servicing retained $ 6,713,623 $ 4,296,646 $ 12,462,639 $ 7,750,356 Servicing released 2,001,477 2,645,958 3,926,115 4,359,921 Total loans sold (1) $ 8,715,100 $ 6,942,604 $ 16,388,754 $ 12,110,277 Loans sold (units) 31,840 25,156 56,939 45,060 Servicing metrics Total servicing portfolio (unpaid principal balance) $ 123,387,503 $ 117,539,884 $ 123,387,503 $ 117,539,884 Total servicing portfolio (units) 465,089 432,764 465,089 432,764 60+ days delinquent ($) (2) $ 2,142,638 $ 1,641,165 $ 2,142,638 $ 1,641,165 60+ days delinquent (%) 1.74 % 1.40 % 1.74 % 1.40 % Servicing rights at fair value, net (3) $ 1,751,543 $ 1,616,854 $ 1,751,543 $ 1,616,854 Weighted average servicing fee (4) 0.30 % 0.30 % 0.30 % 0.30 % Multiple (4) (5) 5.1 4.9 5.1 4.9 (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 Non-Agency products. (5) Amounts represent the fair value of servicing rights, net, divided by the weighted average annualized servicing fee. Results of Operations Three Months Ended June 30, 2026 Compared to Three Months Ended June 30, 2025 The following table sets forth our consolidated financial statement data for the three months ended June 30, 2026 compared to the three months ended June 30, 2025 . Three Months Ended June 30, Change $ Change % (Dollars in thousands) 2026 2025 (Unaudited) REVENUES: Net interest income $ 2,259 $ 1,649 $ 610 37.0 % Gain on origination and sale of loans, net 176,740 174,810 1,930 1.1 Origination income, net 52,224 34,931 17,293 49.5 Servicing fee income 111,964 108,209 3,755 3.5 Change in fair value of servicing rights, net (19,558) (52,376) 32,818 62.7 Other income 13,692 15,314 (1,622) (10.6) Total net revenues 337,321 282,537 54,784 19.4 EXPENSES: Personnel expense 180,729 154,116 26,613 17.3 Marketing and advertising expense 26,694 37,878 (11,184) (29.5) Direct origination expense 27,840 20,456 7,384 36.1 General and administrative expense 47,528 39,727 7,801 19.6 Occupancy expense 4,595 4,133 462 11.2 Depreciation and amortization 5,869 6,379 (510) (8.0) Servicing expense 8,820 8,184 636 7.8 Other interest expense 41,863 43,998 (2,135) (4.9) Total expenses 343,938 314,871 29,067 9.2 Loss before income taxes (6,617) (32,334) 25,717 79.5 Income tax expense (benefit) 5 (7,061) 7,066 100.1 Net loss (6,622) (25,273) 18,651 73.8 Net loss attributable to noncontrolling interests (2,089) (11,885) 9,796 82.4 Net loss attributable to loanDepot, Inc. $ (4,533) $ (13,388) $ 8,855 66.1 % The decrease in net loss of $18.7 million was primarily due to a $54.8 million increase in total net revenues, partially offset by a $29.1 million increase in total expenses. The increase in total revenues was primarily due to a decrease in loss from change in fair value of servicing rights, net, an increase in origination income, net, and an increase in servicing fee income. The increase in total expenses was primarily due an increase in personnel expense driven by an increase in headcount and an increase in commission expense in line with the increase in funded volume. Revenues Net Interest Income. Net interest income includes interest income earned on LHFS offset by interest expense incurred on amounts borrowed under warehouse lines for loan financing as well as warehouse line commitment fees. These commitment fees are amortized on a straight-line basis over the duration of the warehouse line agreement. The increase in net interest income reflects increased HELOC volumes at higher yields and a reduction in warehouse cost of funds driving improved net interest margins. 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 June 30, Change $ Change % (Dollars in thousands) 2026 2025 (Discount) premium from loan sales $ (27,437) $ 9,991 $ (37,428) (374.6) % Fair value of servicing rights additions 98,335 66,940 31,395 46.9 Fair value gains on IRLC and LHFS 23,539 3,484 20,055 575.6 Fair value losses from Hedging Instruments (4,229) (1,093) (3,136) (286.9) Discount points, rebates and lender paid costs 90,251 99,118 (8,867) (8.9) Provision loan loss obligation for loans sold (3,719) (3,630) (89) (2.5) Total gain on origination and sale of loans, net $ 176,740 $ 174,810 $ 1,930 1.1 % The $1.9 million or 1.1% increase in gain on origination and sale of loans, net was primarily driven by a 4.5% increase in pull-through weighted interest rate lock volumes and an increase in pull-through weighted gain on sale margin of 15 basis points. 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 $17.3 million or 49.5% increase in origination income, net, was the result of HELOC volumes increasing 237% from the launch of our 5x5 HomeLoan product during the three months ended June 30, 2026. 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 increase of $3.8 million or 3.5% reflects an increase in servicing fee collections due to a 4.3% increase in our servicing portfolio. 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 $32.8 million or 62.7% reflects a $39.1 million increase in fair value, net of hedge related to improved market pricing from higher mortgage interest rates, decreased investor yield requirements and strong investor demand for lower coupon servicing, offset by a $6.7 million increase in fallout. Expenses Personnel Expense. Personnel expense includes salaries, commissions, incentive compensation, benefits, and other employee costs. The increase of $26.6 million or 17.3% is primarily due to a $12.8 million volume-related increase in commissions, a $7.8 million increase in salaries and benefits due to an increase in headcount and a $7.5 million increase in stock-based compensation related to forfeitures in the prior year. As of June 30, 2026, we had 4,626 employees compared to 4,509 employees as of June 30, 2025. Marketing and Advertising Expense. The decrease of $11.2 million or 29.5% primarily reflects a $5.9 million decrease in lead generation, a $4.1 million decrease related to brand marketing expense and a $1.7 million decrease in direct mail spend. 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 $7.4 million or 36.1% increase in direct origination expense was the result of an increase in loan origination cost related to the volume of our 5x5 HomeLoan product. General and Administrative Expense . General and administrative expense includes professional fees, data processing expense, communications expense, and other operating expenses. The $7.8 million or 19.6% increase in general and administrative expense included a $4.4 million increase in legal expense due to an insurance recovery in the second quarter of the prior year, a $2.2 million increase in office and equipment expenses primarily related to software subscriptions, a $1.6 million loss on disposal of fixed assets, and a $1.3 million increase related to other general expenses, offset by a $2.5 million decrease in consulting services. Other Interest Expense. The $2.1 million or 4.9% decrease in other interest expense was the result of the $1.2 million gain on debt extinguishment related to the repurchase of senior notes and a $1.0 million decrease in MSR interest expense. Six Months Ended June 30, 2026 Compared to Six Months Ended June 30, 2025 The following table sets forth our consolidated financial statement data for the six months ended June 30, 2026 compared to the six months ended June 30, 2025 . Six Months Ended June 30, Change $ Change % (Dollars in thousands) 2026 2025 (Unaudited) REVENUES: Net interest income $ 4,963 $ 4,958 $ 5 0.1 % Gain on origination and sale of loans, net 368,746 341,186 27,560 8.1 Origination income, net 84,846 60,789 24,057 39.6 Servicing fee income 220,713 212,487 8,226 3.9 Change in fair value of servicing rights, net (83,917) (93,479) 9,562 10.2 Other income 28,357 30,217 (1,860) (6.2) Total net revenues 623,708 556,158 67,550 12.1 EXPENSES: Personnel expense 356,096 304,277 51,819 17.0 Marketing and advertising expense 55,700 76,128 (20,428) (26.8) Direct origination expense 52,928 42,411 10,517 24.8 General and administrative expense 94,409 83,860 10,549 12.6 Occupancy expense 8,870 8,429 441 5.2 Depreciation and amortization 12,204 14,045 (1,841) (13.1) Servicing expense 20,298 18,183 2,115 11.6 Other interest expense 84,933 87,263 (2,330) (2.7) Total expenses 685,438 634,596 50,842 8.0 Loss before income taxes (61,730) (78,438) 16,708 21.3 Income tax benefit (166) (12,469) 12,303 98.7 Net loss (61,564) (65,969) 4,405 6.7 Net loss attributable to noncontrolling interests (19,544) (30,686) 11,142 36.3 Net loss attributable to loanDepot, Inc. $ (42,020) $ (35,283) $ (6,737) (19.1) % The decrease in net loss of $4.4 million was due to a $67.6 million increase in total net revenues, partially offset by a $50.8 million increase in total expenses and a $12.3 million decrease in income tax benefit primarily attributable to changes in the valuation allowance related to losses generating net operating loss carryforwards. The increase in total revenues was primarily due to an increase in gain on origination and sale of loans, net and origination fee income from higher loan origination volume, an increase in servicing fee income due to an increase in average servicing portfolio balance and a decrease in loss from the change in fair value of servicing rights, net, offset by lower gain on sale margins. The increase in total expenses was driven by an increase in personnel expense driven by an increase in headcount and an increase in commission expense in line with the increase in funded volume, direct origination expense, and general and administrative expense, partially offset by a decrease in marketing and advertising and other interest expense. Revenues Gain on Origination and Sale of Loans, Net . Gain on origination and sale of loans, net was comprised of the following components: Six Months Ended June 30, Change $ Change % (Dollars in thousands) 2026 2025 Premium from loan sales $ 12,291 $ 18,198 $ (5,907) (32.5) % Fair value of servicing rights additions 185,485 119,626 65,859 55.1 Fair value (losses) gains on IRLC and LHFS (8,496) 58,250 (66,746) (114.6) Fair value gains (losses) from Hedging Instruments 27,317 (30,812) 58,129 188.7 Discount points, rebates and lender paid costs 159,533 179,799 (20,266) (11.3) Provision loan loss obligation for loans sold (7,384) (3,875) (3,509) (90.6) Total gain on origination and sale of loans, net $ 368,746 $ 341,186 $ 27,560 8.1 % The $27.6 million or 8.1% increase in gain on origination and sale of loans, net was primarily driven by a 26.7% increase in pull-through weighted interest rate lock volumes, partially offset by a decrease in pull-through weighted gain on sale margin of 38 basis points. Origination Income, Net . The $24.1 million or 39.6% increase in origination income, net, was the result of origination fees from a 31.4% increase in loan originations and contributions from increased HELOC volumes associated with the launch of our 5x5 HomeLoan product during the three months ended June 30, 2026. Servicing Fee Income . The increase of $8.2 million or 3.9% reflects an increase in servicing fee collections due to a 3.7% increase in our servicing portfolio. Change in Fair Value of Servicing Rights, Net . The increase of $9.6 million or 10.2% reflects an increased gain of $31.1 million in fair value, net of hedge related to improved market pricing from higher mortgage interest rates, decreased investor yield requirements and strong investor demand for lower coupon servicing, partially offset by a $22.0 million increase in fallout. Expenses Personnel Expense. The increase of $51.8 million or 17.0% is primarily due to a $31.5 million volume-related increase in commissions, a $14.2 million increase in salaries and benefits due to an increase in headcount, and an $8.2 million increase in stock-based compensation related to forfeitures in the prior year. As of June 30, 2026, we had 4,626 employees compared to 4,509 employees as of June 30, 2025. Marketing and Advertising Expense. The decrease of $20.4 million or 26.8% primarily reflects a $9.3 million decrease in lead generation, an $8.4 million decrease related to brand marketing expense and a $2.8 million decrease in direct mail spend. Direct Origination Expense. The $10.5 million or 24.8% increase in direct origination expense was the result of an increase in loan originations including costs associated with the volume of our 5x5 HomeLoan product. General and Administrative Expense . The $10.5 million or 12.6% increase in general and administrative expense included a $3.6 million increase in office and equipment expenses primarily related to software subscriptions, a $1.5 million loss on disposal of fixed assets, a $1.2 million increase in legal expense due to an insurance recovery in the prior year, a $1.2 million increase in loss contingency, and a $1.0 million increase in compliance fees. Other Interest Expense. The $2.3 million or 2.7% decrease in other interest expense was primarily the result of a $1.2 million gain on debt extinguishment related to the repurchase of senior notes and a $1.2 million decrease in MSR and securities financing interest expense. Balance Sheet Highlights June 30, 2026 Compared to December 31, 2025 The following table sets forth our consolidated balance sheets as of the dates indicated: (Dollars in thousands) June 30, 2026 December 31, 2025 Change $ Change % (Unaudited) ASSETS Cash and cash equivalents $ 229,128 $ 337,232 $ (108,104) (32.1) % Restricted cash 70,717 63,790 6,927 10.9 Loans held for sale, at fair value 2,643,032 3,165,542 (522,510) (16.5) Loans held for investment, at fair value 106,268 109,821 (3,553) (3.2) Derivative assets, at fair value 59,225 42,365 16,860 39.8 Servicing rights, at fair value 1,779,817 1,658,223 121,594 7.3 Trading securities, at fair value 82,008 85,640 (3,632) (4.2) Property and equipment, net 65,485 61,929 3,556 5.7 Operating lease right-of-use assets 25,951 23,877 2,074 8.7 Loans eligible for repurchase 1,401,739 1,074,386 327,353 30.5 Investments in joint ventures 18,177 18,251 (74) (0.4) Other assets 215,013 216,880 (1,867) (0.9) Total assets $ 6,696,560 $ 6,857,936 $ (161,376) (2.4) % LIABILITIES & EQUITY Warehouse and other lines of credit $ 2,443,802 $ 2,902,539 $ (458,737) (15.8) % Accounts payable, accrued expenses and other liabilities 346,638 349,350 (2,712) (0.8) Derivative liabilities, at fair value 6,341 10,718 (4,377) (40.8) Liability for loans eligible for repurchase 1,401,739 1,074,386 327,353 30.5 Operating lease liability 34,790 34,630 160 0.5 Debt obligations, net 2,130,204 2,100,303 29,901 1.4 Total liabilities 6,363,514 6,471,926 (108,412) (1.7) Total equity 333,046 386,010 (52,964) (13.7) Total liabilities and equity $ 6,696,560 $ 6,857,936 $ (161,376) (2.4) % Cash and Cash Equivalents. The $108.1 million or 32.1% decrease in cash and cash equivalents relates to repurchases of Senior Notes, increases in cash collateral requirements associated with the Company's warehouse lending facilities which resulted in a corresponding increase in restricted cash, increases in retained servicing rights, and additional net losses, partially offset by an increase in debt obligations. Restricted Cash. Restricted cash was $70.7 million as of June 30, 2026 compared to $63.8 million as of December 31, 2025 representing an increase of $6.9 million or 10.9%. The increase was primarily the result of increases in prepaid lending commitments and increases in cash collateral associated with warehouse lines and debt obligations, offset by decreases in cash collateral for hedge positions. Loans Held for Sale, at Fair Value. The $522.5 million or 16.5% decrease reflects $16.4 billion in loan sales, $42.4 million in principal payments, and $13.4 million in fair value, partially offset by $15.4 billion in loan originations and $458.8 million in repurchases. Derivative Assets, at Fair Value. The $16.9 million or 39.8% increase reflects a $12.7 million increase in Hedging Instruments and a $4.2 million increase in IRLCs from higher notional balances. Loans Eligible for Repurchase. Loans eligible for repurchase were $1.4 billion as of June 30, 2026, as compared to $1.1 billion as of December 31, 2025, representing an increase of $327.4 million or 30.5%. The increase between periods was driven by an increase in loans that were 90 days or more delinquent at June 30, 2026. Servicing Rights, at Fair Value. The $121.6 million or 7.3% increase was comprised of $185.5 million of capitalized servicing rights from servicing-retained loan sales and a $44.9 million increase in fair value related to improved market pricing from higher mortgage interest rates, decreased investor yield requirements and strong investor demand for lower coupon servicing, partially offset by $101.0 million from principal amortization and prepayments, and a $6.3 million reduction from sales of servicing rights associated with $202.1 million in UPB. Warehouse and Other Lines of Credit. The decrease of $458.7 million or 15.8% is consistent with the decrease in loans held for sale during the six months ended June 30, 2026. Derivative Liabilities, at Fair Value. The decrease of $4.4 million or 40.8% reflects a $3.6 million decrease in Hedging Instrument liabilities from higher interest rates and a $0.8 million decrease in IRLCs. Debt Obligations, net. The increase of $29.9 million or 1.4% primarily relates to a $40.8 million increase in secured credit facilities, offset by a $16.0 million repurchase of senior notes. Equity . Total equity was $333.0 million and $386.0 million as of June 30, 2026 and December 31, 2025, respectively. The decrease was primarily attributed to a net loss of $61.6 million, $2.4 million in repurchases of treasury shares, and a $2.0 million decrease due to conversion-related adjustments to the TRA liability, partially offset by stock-based compensation of $11.7 million and an increase of $1.0 million related to the issuance of common stock through the exercise of stock options. Liquidity and Capital Resources Liquidity Our liquidity reflects our ability to meet current and potential cash requirements. We forecast the need to have adequate liquid funds available to operate and grow our business. As of June 30, 2026, unrestricted cash and cash equivalents were $229.1 million and committed and uncommitted available capacity under our warehouse and other lines of credit was $1.9 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. In July 2026, we took advantage of market conditions and entered into an agreement to sell $9.7 billion of our servicing portfolio, which is expected to settle in the third quarter 2026. 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 June 30, 2026, 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 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. 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 June 30, 2026, 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 June 30, 2026, our loans remained on warehouse lines for an average of 15 days. Our warehouse facilities are generally short-term borrowings with maturities of one year and our securitization facilities have three year terms. 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 69% of the mortgage loans that we originated during the six months ended June 30, 2026 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 other non-Agency investors. As of June 30, 2026, we maintained revolving lines of credit with eleven counterparties, including two loan funding facilities with GSEs, providing warehouse and securitization facilities with borrowing capacity totaling $4.4 billion of which $1.5 billion was committed. Our $4.4 billion of capacity as of June 30, 2026 was comprised of $3.6 billion with staggered maturities within one year, a $300.0 million securitization facility that matures in April 2028, and a $500.0 million securitization facility that matures in April 2029. As of June 30, 2026, we had $2.4 billion of borrowings outstanding and $1.9 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 June 30, 2026, we had a total of $16.2 million in restricted cash posted as collateral with our warehouse and securitization facilities, of which $3.5 million was the minimum requirement. Debt Obligations MSR facilities and Term Notes provide financing for our servicing portfolio investments. As of June 30, 2026, our MSR facility secured by Fannie Mae had an outstanding balance of $117.6 million in MSR facilities and $198.2 million in Term Notes, secured by Fannie Mae MSRs totaling $396.9 million. As of June 30, 2026, our MSR facility secured by Freddie Mac had an outstanding balance of $321.8 million, secured by Freddie Mac MSRs totaling $396.7 million. As of June 30, 2026, our MSR facility secured by Ginnie Mae had an outstanding balance of $114.6 million in variable funding notes and $347.2 million in Term Notes, secured by Ginnie Mae MSRs totaling $696.4 million. Securities financing facilities provide financing for the retained interest securities associated with our securitizations. As of June 30, 2026 there were outstanding securities financing facilities of $76.1 million, secured by trading securities with a fair value of $82.0 million. 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 June 30, 2026 the outstanding balance on our servicing advance facilities was $71.1 million secured by servicing advance receivables totaling $93.3 million. Other secured financings as of June 30, 2026 consisted of securitization debt of $83.9 million, net of $3.9 million in discount and $0.6 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. Senior Notes as of June 30, 2026 consisted of secured Senior Notes totaling $311.9 million, net of $2.8 million of deferred financing costs and a discount of $19.8 million, and unsecured Senior Notes totaling $487.7 million, net of $1.8 million of deferred financing costs. 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 year ended December 31, 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. In November 2025, the remaining principal balance of $19.8 million on the 2025 Senior Notes was redeemed. In June 2026, the Company repurchased $6.2 million of 2027 Senior Notes and $9.9 million of 2028 Senior Notes that resulted in a $1.2 million gain on extinguishment of debt, net of discount and deferred financing fees. In July 2026, the Company repurchased $5.2 million of 2027 Senior Notes at an average purchase price of 93.1% of par and $21.4 million of 2028 Senior Notes at an average purchase price of 84.1% of par. Debt obligations are further discussed in Note 10- Debt Obligations of the Notes to Consolidated Financial Statements contained in Item 1. We continue to evaluate opportunities to optimize our capital structure. As of July 30, 2026, $329.3 million of the 2027 Senior Notes, which mature in November 2027, and $468.1 million of the 2028 Senior Notes, which mature in April 2028, were outstanding. Addressing our Senior Notes maturities remains a high priority for management, and we are evaluating a range of options with the help of retained advisors. Any refinancing, even if available on then-prevailing market terms, may require higher interest rates, more restrictive covenants, additional collateral, reduced principal amounts, debt repurchases, asset sales, equity issuances or other transactions or terms that could increase our debt service obligations, reduce our liquidity, dilute existing stockholders or further restrict our operational and financial flexibility. If we are unable to refinance the Senior Notes on commercially reasonable terms or at all, we may be required to use available cash, including cash needed for operations and other obligations, to repay the Senior Notes at maturity, which would reduce our liquidity and could require us to sell assets, including mortgage servicing rights, possibly at valuations or on terms that are less favorable than we could obtain under more favorable conditions. 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. Contractual Obligations and Commitments Our estimated contractual obligations as of June 30, 2026 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 $ 2,443,802 $ 1,643,802 $ 800,000 $ - $ - Debt obligations (1) Secured credit facilities 704,907 704,907 - - - Term Notes 550,000 - - 550,000 - Senior Notes 824,005 - 824,005 - - Other secured financings (2) 88,409 - - - 88,409 Long-term software license commitments 135,469 28,966 43,264 32,292 30,947 Operating lease obligations (3) 50,341 15,826 19,725 11,336 3,454 Naming and promotional rights agreements 27,000 6,000 12,000 9,000 - Total contractual obligations $ 4,823,933 $ 2,399,501 $ 1,698,994 $ 602,628 $ 122,810 (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 June 30, 2026, 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 2025 Form 10-K. At December 31, 2025, 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. 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 Loss, Adjusted Diluted Weighted Average Shares Outstanding, and Adjusted EBITDA. 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. 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, 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, and impairment charges to 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 includes interest expense on funding facilities, which are recorded as a component of "net interest income," 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. 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 B and 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 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 Loss, and Adjusted EBITDA 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 Loss, Adjusted Diluted Weighted Average Shares Outstanding, and Adjusted EBITDA are not intended as alternatives to total revenue, net loss, net loss attributable to the Company, 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 Loss, Adjusted Diluted Weighted Average Shares Outstanding, and Adjusted EBITDA 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. Reconciliation of Total Revenue to Adjusted Total Revenue (Dollars in thousands) (Unaudited): Three Months Ended Six Months Ended June 30, 2026 June 30, 2025 June 30, 2026 June 30, 2025 Total net revenue $ 337,321 $ 282,537 $ 623,708 $ 556,158 Valuation changes in servicing rights, net of hedging gains and losses (1) (29,770) 9,375 (16,907) 14,198 Adjusted total revenue $ 307,551 $ 291,912 $ 606,801 $ 570,356 (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, and gains (losses) from the sale of MSRs. Refer to Note 5 - Servicing Rights, at Fair Value. Reconciliation of Net Loss to Adjusted Net Loss (Dollars in thousands) (Unaudited): Three Months Ended Six Months Ended June 30, 2026 June 30, 2025 June 30, 2026 June 30, 2025 Net loss attributable to loanDepot, Inc. $ (4,533) $ (13,388) $ (42,020) $ (35,283) Net loss from the pro forma conversion of Class B or Class C common stock to Class A common stock (1) (2,089) (11,885) (19,544) (30,686) Net loss (6,622) (25,273) (61,564) (65,969) Adjustments to the benefit for income taxes (2) 5 2,937 53 7,791 Tax-effected net loss (6,617) (22,336) (61,511) (58,178) Valuation changes in servicing rights, net of hedging gains and losses (3) (29,770) 9,375 (16,907) 14,198 Stock-based compensation expense 5,281 (2,256) 11,674 3,460 Restructuring charges (4) 1,198 157 1,906 2,278 Cybersecurity incident (5) 1,058 301 1,179 1,089 Gain on extinguishment of debt (1,170) - (1,170) - Loss on disposal of fixed assets 1,596 11 1,524 28 Other impairment (recovery) (6) - - - 5 Tax effect of adjustments (7) (802) (1,265) 466 (4,248) Adjusted net loss $ (29,226) $ (16,013) $ (62,839) $ (41,368) (1) Reflects net loss to Class A common stock and Class D common stock from the pro forma exchange of Class B common stock and 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 Six Months Ended June 30, 2026 June 30, 2025 June 30, 2026 June 30, 2025 Statutory U.S. federal income tax rate 21.00 % 21.00 % 21.00 % 21.00 % State and local income taxes (net of federal benefit) 4.52 3.71 4.67 4.39 Effect of valuation allowance and other tax adjustments (25.29) - (25.40) - Effective income tax rate 0.23 % 24.71 % 0.27 % 25.39 % (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. 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, 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 Six Months Ended June 30, 2026 June 30, 2025 June 30, 2026 June 30, 2025 Share Data: Diluted weighted average shares of Class A and Class D common stock outstanding 231,643,671 207,948,195 230,290,154 204,370,382 Assumed pro forma conversion of weighted average Class B and Class C common stock to Class A common stock (1) 106,139,515 121,881,530 106,173,474 124,561,094 Adjusted diluted weighted average shares outstanding 337,783,186 329,829,725 336,463,628 328,931,476 (1) Reflects the assumed pro forma exchange and conversion of Class B and Class C common stock. Reconciliation of Net Loss to Adjusted EBITDA (Dollars in thousands) (Unaudited): Three Months Ended Six Months Ended June 30, 2026 June 30, 2025 June 30, 2026 June 30, 2025 Net loss $ (6,622) $ (25,273) $ (61,564) $ (65,969) Interest expense - non-funding debt (1) 41,863 43,998 84,933 87,263 Income tax expense (benefit) 5 (7,061) (166) (12,469) Depreciation and amortization 5,869 6,379 12,204 14,045 Valuation changes in servicing rights, net of hedging gains and losses (2) (29,770) 9,375 (16,907) 14,198 Stock-based compensation expense 5,281 (2,256) 11,674 3,460 Restructuring charges (3) 1,198 157 1,906 2,278 Cybersecurity incident (4) 1,058 301 1,179 1,089 Loss on disposal of fixed assets 1,596 11 1,524 28 Other impairment (5) - - - 5 Adjusted EBITDA $ 20,478 $ 25,631 $ 34,783 $ 43,928 (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. 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, settlement costs, and commission guarantees. (5) Represents lease impairment on corporate and retail locations.

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