loanDepot Is Reporting A 6th Consecutive Quarterly Loss. Company Had A $26 Million Loss In Q3. Will loanDepot Survive 2024?
SEC filings show loanDepot is reporting its sixth consecutive quarterly loss in the third quarter of 2023.
The company said total revenue declined as a result of lower origination volume. However, they have made inroads with their aggressive cost-cutting strategies. The company also stated that more cost reductions are coming in the coming quarters.
The lender recorded a loss of $26.8 million in non-GAAP adjusted net income from July to September. This is compared to a $34.3 million loss in the previous quarter.
The company’s total revenues decreased to $265.7 million in the third quarter. This is down from $271.8 million in the previous quarter.
CFO David Hayes said the company sold excess agency mortgage servicing rights related to unpaid principal balances totaling $12 billion. This resulted in a gain of $4 million.
Meanwhile, total expenses decreased faster than revenues to $305.1 million in Q3. This is down from $330.1 million in Q2. Quarterly non-volume expenses decreased $18.7 million since the second quarter. The company says this is due to lower salaries and benefits resulting from reduced headcount and legal expenses. The company’s headcount declined to 4,532 in Q3 from 4,683 in Q2.
The company also accrued $2 million of legal expenses related to the expected settlement of outstanding litigation. In August, the company agreed to settle a securities class action lawsuit for $3.2 million.
loanDepot’s loan origination volume came in at $6.1 billion in the third quarter, down from $6.2 billion in the second quarter of 2023. The pull-through gain-on-sale margin was 2.93% in the third quarter, better than the 2.85% registered in the previous quarter.
Company executives project the fourth quarter volume between $4 billion and $6 billion. The pull-through gain-on-sale margin is expected to be between 2.40% and 2.80%.
Read More About loanDepot And The Imploding Lending Industry On LenderMeltdown.com