QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |||||||||||||
(Address of principal executive offices) | (Zip Code) |
Title of each class | Trading Symbol | Name of each exchange on which registered | ||||||||||||
Large accelerated filer | ☐ | Accelerated filer | ☐ | |||||||||||||||||
☒ | Smaller reporting company | |||||||||||||||||||
Emerging growth company |
PART 1. FINANCIAL INFORMATION | |||||
Item 1. Financial Statements | |||||
Consolidated Balance Sheets as of March 31, 2023 and December 31, 2022 | |||||
Consolidated Statements of Operations for the three months ended March 31, 2023 and 2022 | |||||
Consolidated Statements of Equity for the three months ended March 31, 2023 and 2022 | |||||
Consolidated Statements of Cash Flows for the three months ended March 31, 2023 and 2022 | |||||
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 | |||||
March 31, 2023 | December 31, 2022 | ||||||||||
ASSETS | (Unaudited) | ||||||||||
Cash and cash equivalents | $ | $ | |||||||||
Restricted cash | |||||||||||
Accounts receivable, net | |||||||||||
Loans held for sale, at fair value (includes $ | |||||||||||
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 | |||||||||||
Prepaid expenses and other assets | |||||||||||
Loans eligible for repurchase | |||||||||||
Investments in joint ventures | |||||||||||
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 14) | |||||||||||
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 | $ | $ |
Three Months Ended March 31, | ||||||||||||||
2023 | 2022 | |||||||||||||
REVENUES: | ||||||||||||||
Interest income | $ | $ | ||||||||||||
Interest expense | ( | ( | ||||||||||||
Net interest income | ||||||||||||||
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. | $ | ( | $ | ( | ||||||||||
Loss per share: | ||||||||||||||
Basic | $ | ( | $ | ( | ||||||||||
Diluted | $ | ( | $ | ( | ||||||||||
Weighted average shares outstanding: | ||||||||||||||
Basic | ||||||||||||||
Diluted |
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, 2021 | $ | $ | $ | $ | ( | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Deferred taxes and other tax adjustments associated with the Reorganization and IPO | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net issuance of common shares under stock based compensation plans | ( | ( | ( | ( | ( | — | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Dividends to Class A and Class D shareholders ($ | — | — | — | — | — | — | — | — | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Distributions to Class C shareholders | — | — | — | — | — | — | — | — | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Distributions for taxes on behalf of shareholders, net | — | — | — | — | — | — | — | — | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | — | — | — | — | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance at March 31, 2022 | $ | $ | $ | $ | ( | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance at December 31, 2022 | $ | $ | $ | $ | ( | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Deferred taxes and other tax adjustments related to conversions and exchanges | — | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net issuance of common stock under stock-based compensation plans | ( | ( | ( | — | ( | ( | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Forfeiture of accrued dividend equivalents on unvested Class A RSUs | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-based compensation | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Refund of tax distributions, net | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Net loss | — | — | — | — | — | — | — | — | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance at March 31, 2023 | $ | $ | $ | $ | ( | $ | $ | ( | $ | $ |
Three Months Ended March 31, | |||||||||||
2023 | 2022 | ||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES | |||||||||||
Net loss | $ | ( | $ | ( | |||||||
Adjustments to reconcile net loss to net | |||||||||||
cash provided by operating activities: | |||||||||||
Depreciation and amortization expense | |||||||||||
Amortization of operating lease right-of-use asset | |||||||||||
Amortization of debt issuance costs | |||||||||||
Gain on origination and sale of loans | ( | ( | |||||||||
Gain on sale of servicing rights | ( | ( | |||||||||
Fair value change in trading securities | ( | ||||||||||
Provision for loss obligation on sold loans and servicing rights | |||||||||||
Decrease in provision for deferred income taxes | ( | ( | |||||||||
Fair value change in derivative assets | ( | ( | |||||||||
Fair value change in derivative liabilities | ( | ||||||||||
Premium paid on derivatives | ( | ( | |||||||||
Fair value change in loans held for sale | ( | ||||||||||
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 | ( | ( | |||||||||
Gain on extinguishment of debt | ( | ||||||||||
Disbursements from joint ventures | |||||||||||
Changes in operating assets and liabilities: | |||||||||||
Other changes in operating assets and liabilities | |||||||||||
Net cash provided by 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 | ( | ||||||||||
Net cash flows provided by investing activities |
Three Months Ended March 31, | |||||||||||
2023 | 2022 | ||||||||||
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 used in 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 | $ | $ | |||||||||
Trading securities retained in securitizations | |||||||||||
March 31, 2023 | ||||||||||||||||||||||||||
Carrying Amount | Estimated Fair Value | |||||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | ||||||||||||||||||||||||
Assets | ||||||||||||||||||||||||||
Cash and cash equivalents | $ | $ | $ | $ | ||||||||||||||||||||||
Restricted cash | ||||||||||||||||||||||||||
Loans held for sale, at fair value | ||||||||||||||||||||||||||
Derivative assets, at fair value | ||||||||||||||||||||||||||
Servicing rights, at fair value | ||||||||||||||||||||||||||
Trading securities, at fair value | ||||||||||||||||||||||||||
Loans eligible for repurchase | ||||||||||||||||||||||||||
Liabilities | ||||||||||||||||||||||||||
Warehouse and other lines of credit | $ | $ | $ | $ | ||||||||||||||||||||||
Derivative liabilities, at fair value | ||||||||||||||||||||||||||
Servicing rights, at fair value | ||||||||||||||||||||||||||
Debt obligations: | ||||||||||||||||||||||||||
Secured credit facilities | ||||||||||||||||||||||||||
Term Notes | ||||||||||||||||||||||||||
Senior Notes | ||||||||||||||||||||||||||
Liability for loans eligible for repurchase |
December 31, 2022 | ||||||||||||||||||||||||||
Carrying Amount | Estimated Fair Value | |||||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | ||||||||||||||||||||||||
Assets | ||||||||||||||||||||||||||
Cash and cash equivalents | $ | $ | $ | $ | ||||||||||||||||||||||
Restricted cash | ||||||||||||||||||||||||||
Loans held for sale, at fair value | ||||||||||||||||||||||||||
Derivative assets, at fair value | ||||||||||||||||||||||||||
Servicing rights, at fair value | ||||||||||||||||||||||||||
Trading securities, at fair value | ||||||||||||||||||||||||||
Loans eligible for repurchase | ||||||||||||||||||||||||||
Liabilities | ||||||||||||||||||||||||||
Warehouse and other lines of credit | $ | $ | $ | $ | ||||||||||||||||||||||
Derivative liabilities, at fair value | ||||||||||||||||||||||||||
Servicing rights, at fair value | ||||||||||||||||||||||||||
Debt obligations: | ||||||||||||||||||||||||||
Secured credit facilities | ||||||||||||||||||||||||||
Term Notes | ||||||||||||||||||||||||||
Senior Notes | ||||||||||||||||||||||||||
Liability for loans eligible for repurchase |
March 31, 2023 | ||||||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||||||
Fair value through net income: | ||||||||||||||||||||||||||
Assets: | ||||||||||||||||||||||||||
Loans held for sale | $ | $ | $ | $ | ||||||||||||||||||||||
Trading securities | ||||||||||||||||||||||||||
Derivative assets: | ||||||||||||||||||||||||||
Interest rate lock commitments | ||||||||||||||||||||||||||
Forward sale contracts | ||||||||||||||||||||||||||
Interest rate swap futures | ||||||||||||||||||||||||||
MBS put options | ||||||||||||||||||||||||||
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 | $ | $ | $ | $ |
December 31, 2022 | ||||||||||||||||||||||||||
Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||||||
Fair value through net income: | ||||||||||||||||||||||||||
Assets: | ||||||||||||||||||||||||||
Loans held for sale | $ | $ | $ | $ | ||||||||||||||||||||||
Trading securities | ||||||||||||||||||||||||||
Derivative assets: | ||||||||||||||||||||||||||
Interest rate lock commitments | ||||||||||||||||||||||||||
Forward sale contracts | ||||||||||||||||||||||||||
MBS put options | ||||||||||||||||||||||||||
Servicing rights | ||||||||||||||||||||||||||
Total assets at fair value | $ | $ | $ | $ | ||||||||||||||||||||||
Liabilities: | ||||||||||||||||||||||||||
Derivative liabilities: | ||||||||||||||||||||||||||
Interest rate lock commitments | $ | $ | $ | $ | ||||||||||||||||||||||
Forward sale contracts | ||||||||||||||||||||||||||
Put options on treasuries | ||||||||||||||||||||||||||
Interest rate swap futures | ||||||||||||||||||||||||||
Servicing rights | ||||||||||||||||||||||||||
Total liabilities at fair value | $ | $ | $ | $ |
Three Months Ended March 31, 2023 | ||||||||||||||
IRLCs, net | Servicing Rights, net | |||||||||||||
Balance at beginning of period | $ | $ | ||||||||||||
Total net gains or losses included in earnings (realized and unrealized) | ||||||||||||||
Sales and settlements | ||||||||||||||
Sales | ( | |||||||||||||
Settlements (1) | ( | |||||||||||||
Transfers of IRLCs to closed loans | ( | |||||||||||||
Balance at end of period | $ | $ |
Three Months Ended March 31, 2022 | ||||||||||||||
IRLCs, net | Servicing Rights, net | |||||||||||||
Balance at beginning of period | $ | $ | ||||||||||||
Total net gains or losses included in earnings (realized and unrealized) | ||||||||||||||
Sales and settlements | ||||||||||||||
Sales | ( | |||||||||||||
Settlements (1) | ( | |||||||||||||
Transfers of IRLCs to closed loans | ( | |||||||||||||
Balance at end of period | $ | $ |
Three Months Ended March 31, 2023 | ||||||||||||||
IRLCs, net | Servicing Rights, net | |||||||||||||
Total net gains (losses) included in: | ||||||||||||||
Gain on origination and sale of loans, net | $ | $ | ||||||||||||
Change in fair value of servicing rights, net | — | ( | ||||||||||||
Total | ||||||||||||||
Change in unrealized gains (losses) relating to assets and liabilities still held at period end | $ | $ | ( |
Three Months Ended March 31, 2022 | |||||||||||||||||
IRLCs, net | Servicing Rights, net | ||||||||||||||||
Total net gains (losses) included in: | |||||||||||||||||
Gain on origination and sale of loans, net | $ | ( | $ | ||||||||||||||
Change in fair value of servicing rights, net | — | ||||||||||||||||
Total | ( | ||||||||||||||||
Change in unrealized gains relating to assets and liabilities still held at period end | $ | $ | |||||||||||||||
March 31, 2023 | December 31, 2022 | |||||||||||||||||||||||||||||||||||||
Unobservable Input | Range of inputs | Weighted Average (2) | Range of inputs | Weighted Average (2) | ||||||||||||||||||||||||||||||||||
IRLCs: | ||||||||||||||||||||||||||||||||||||||
Pull-through rate | - | - | ||||||||||||||||||||||||||||||||||||
Servicing rights | ||||||||||||||||||||||||||||||||||||||
Discount rate(1) | - | - | ||||||||||||||||||||||||||||||||||||
Prepayment rate(1) | - | - | ||||||||||||||||||||||||||||||||||||
Cost to service (per loan) | $ | - | $ | $ | $ | - | $ | $ | ||||||||||||||||||||||||||||||
March 31, 2023 | December 31, 2022 | |||||||||||||||||||||||||
Amount | % | Amount | % | |||||||||||||||||||||||
Conforming - fixed | $ | % | $ | % | ||||||||||||||||||||||
Conforming - ARM | ||||||||||||||||||||||||||
Government - fixed | ||||||||||||||||||||||||||
Government - ARM | ||||||||||||||||||||||||||
Other - residential mortgage loans | ||||||||||||||||||||||||||
Consumer loans | ||||||||||||||||||||||||||
Total | % | % | ||||||||||||||||||||||||
Fair value adjustment | ( | ( | ||||||||||||||||||||||||
Loans held for sale, at fair value | $ | $ |
Three Months Ended March 31, | ||||||||||||||
2023 | 2022 | |||||||||||||
Balance at beginning of period | $ | $ | ||||||||||||
Origination and purchase of loans | ||||||||||||||
Sales | ( | ( | ||||||||||||
Repurchases | ||||||||||||||
Principal payments | ( | ( | ||||||||||||
Fair value gain (loss) | ( | |||||||||||||
Balance at end of period | $ | $ |
Three Months Ended March 31, | ||||||||||||||
2023 | 2022 | |||||||||||||
Discount on loan sales | $ | ( | $ | ( | ||||||||||
Servicing rights additions | ||||||||||||||
Unrealized gains from derivative assets and liabilities | ||||||||||||||
Realized (losses) gains 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 | $ | $ |
March 31, 2023 | December 31, 2022 | |||||||||||||
Conventional | $ | $ | ||||||||||||
Government | ||||||||||||||
Total servicing portfolio | $ | $ |
Three Months Ended March 31, | ||||||||||||||
2023 | 2022 | |||||||||||||
Balance at beginning of period | $ | $ | ||||||||||||
Additions | ||||||||||||||
Sales proceeds, net | ( | ( | ||||||||||||
Changes in fair value: | ||||||||||||||
Due to changes in valuation inputs or assumptions | ( | |||||||||||||
Due to collection/realization of cash flows | ( | ( | ||||||||||||
Balance at end of period | $ | $ |
Three Months Ended March 31, | ||||||||||||||
2023 | 2022 | |||||||||||||
Contractual servicing fees | $ | $ | ||||||||||||
Late, ancillary and other fees | ||||||||||||||
Servicing fee income | $ | $ |
Three Months Ended March 31, | ||||||||||||||
2023 | 2022 | |||||||||||||
Changes in fair value: | ||||||||||||||
Due to changes in valuation inputs or assumptions | $ | ( | $ | |||||||||||
Due to collection/realization of cash flows | ( | ( | ||||||||||||
Realized gains on sales of servicing rights, net of provision | ||||||||||||||
Net gain (loss) from derivatives hedging servicing rights | ( | |||||||||||||
Changes in fair value of servicing rights, net | $ | ( | $ | ( |
March 31, 2023 | December 31, 2022 | |||||||||||||
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% | ( | ( |
Fair Value | ||||||||||||||||||||||||||
Notional | Balance Sheet Location | Asset | Liability | |||||||||||||||||||||||
March 31, 2023: | ||||||||||||||||||||||||||
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 | — | ||||||||||||||||||||||||
MBS put options | Derivative asset, at fair value | — | ||||||||||||||||||||||||
MBS put options | 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 | $ | $ |
Fair Value | ||||||||||||||||||||||||||
Notional | Balance Sheet Location | Asset | Liability | |||||||||||||||||||||||
December 31, 2022: | ||||||||||||||||||||||||||
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 | — | ||||||||||||||||||||||||
MBS put options | Derivative asset, at fair value | — | ||||||||||||||||||||||||
MBS put options | 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 | $ | $ |
Three Months Ended March 31, | |||||||||||||||||||||||
Derivative instrument | Statements of Operations Location | 2023 | 2022 | ||||||||||||||||||||
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 (losses) gains on derivative financial instruments | $ | ( | $ |
March 31, 2023 | ||||||||||||||||||||||||||||||||||||||
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 | $ | $ | ( | $ | $ | $ | $ | |||||||||||||||||||||||||||||||
MBS put options | ||||||||||||||||||||||||||||||||||||||
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 | $ | $ | ( | $ | $ | ( | $ | ( | $ |
December 31, 2022 | ||||||||||||||||||||||||||||||||||||||
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 | $ | $ | ( | $ | $ | $ | $ | |||||||||||||||||||||||||||||||
MBS put options | ||||||||||||||||||||||||||||||||||||||
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 | $ | $ | ( | $ | $ | ( | $ | ( | $ |
March 31, 2023 | December 31, 2022 | |||||||||||||
Assets | ||||||||||||||
Loans held for sale, at fair value | $ | $ | ||||||||||||
Restricted cash | ||||||||||||||
Servicing rights, at fair value | ||||||||||||||
Prepaid expenses and other assets | ||||||||||||||
Total | $ | $ | ||||||||||||
Liabilities | ||||||||||||||
Warehouse and other lines of credit | $ | $ | ||||||||||||
Debt obligations, net: | ||||||||||||||
MSR Facilities | ||||||||||||||
Servicing advance facilities | ||||||||||||||
Term notes | ||||||||||||||
Total | $ | $ | ||||||||||||
March 31, 2023 | ||||||||||||||||||||||||||
Carrying value | Maximum exposure to loss | Total assets in VIEs | ||||||||||||||||||||||||
Assets | Liabilities | |||||||||||||||||||||||||
Retained interests | $ | $ | — | $ | $ | |||||||||||||||||||||
Investments in joint ventures | — | |||||||||||||||||||||||||
Total | $ | $ | — | $ | ||||||||||||||||||||||
December 31, 2022 | ||||||||||||||||||||||||||
Carrying value | Maximum exposure to loss | Total assets in VIEs | ||||||||||||||||||||||||
Assets | Liabilities | |||||||||||||||||||||||||
Retained interests | $ | $ | — | $ | $ | |||||||||||||||||||||
Investments in joint ventures | — | |||||||||||||||||||||||||
Total | $ | $ | — | $ | ||||||||||||||||||||||
Outstanding Balance | ||||||||||||||||||||||||||||||||
Committed Amount | Uncommitted Amount | Total Facility Amount | Expiration Date | March 31, 2023 | December 31, 2022 | |||||||||||||||||||||||||||
Facility 1(1) | $ | $ | $ | 10/26/2023 | $ | $ | ||||||||||||||||||||||||||
Facility 2(2) | 9/25/2023 | |||||||||||||||||||||||||||||||
Facility 3(3) | 4/18/2023 | |||||||||||||||||||||||||||||||
Facility 4 | 12/28/2023 | |||||||||||||||||||||||||||||||
Facility 5(2) | N/A | |||||||||||||||||||||||||||||||
Facility 6(2) | 9/29/2023 | |||||||||||||||||||||||||||||||
Facility 7(4) | 5/5/2023 | |||||||||||||||||||||||||||||||
Facility 8 | 9/21/2023 | |||||||||||||||||||||||||||||||
Facility 9(5) | 10/21/2024 | |||||||||||||||||||||||||||||||
Total | $ | $ | $ | $ | $ |
Three Months Ended March 31, | ||||||||||||||
2023 | 2022 | |||||||||||||
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 | % | % |
March 31, 2023 | December 31, 2022 | ||||||||||
Secured debt obligations, net: | |||||||||||
Secured credit facilities | |||||||||||
MSR facilities | $ | $ | |||||||||
Securities financing facilities | |||||||||||
Servicing advance facilities | |||||||||||
Total secured credit facilities | |||||||||||
Term Notes | |||||||||||
Total secured debt obligations, net | |||||||||||
Unsecured debt obligations, net: | |||||||||||
Senior Notes | |||||||||||
Total debt obligations, net | $ | $ |
March 31, 2023 | December 31, 2022 | ||||||||||||||||
Holding Member Interests: | Holdco Units | Ownership Percentage | Holdco Units | Ownership Percentage | |||||||||||||
loanDepot, Inc. | |||||||||||||||||
Continuing LLC Members | |||||||||||||||||
Total |
Three Months Ended | |||||||||||||||||
March 31, 2023 | |||||||||||||||||
Class A | Class D | Total | |||||||||||||||
Net loss attributable to loanDepot, Inc. | $ | ( | $ | ( | $ | ( | |||||||||||
Weighted average shares - basic | |||||||||||||||||
Loss per share - basic | $ | ( | $ | ( | $ | ( | |||||||||||
Diluted loss per share: | |||||||||||||||||
Net loss allocated to common stockholders - diluted | $ | ( | $ | ( | $ | ( | |||||||||||
Weighted average shares - diluted | |||||||||||||||||
Loss per share - diluted | $ | ( | $ | ( | $ | ( |
Three Months Ended | |||||||||||||||||
March 31, 2022 | |||||||||||||||||
Class A | Class D | Total | |||||||||||||||
Net loss attributable to loanDepot, Inc. | $ | ( | $ | ( | $ | ( | |||||||||||
Weighted average shares - basic | |||||||||||||||||
Loss per share - basic | $ | ( | $ | ( | $ | ( | |||||||||||
Diluted loss per share: | |||||||||||||||||
Net loss allocated to common stockholders - diluted | $ | ( | $ | ( | $ | ( | |||||||||||
Weighted average shares - diluted | |||||||||||||||||
Loss per share - diluted | $ | ( | $ | ( | $ | ( |
Three Months Ended March 31, | ||||||||||||||
2023 | 2022 | |||||||||||||
Loan processing and administrative services fee income | $ | $ | ||||||||||||
Loan origination broker fees expense |
March 31, 2023 | December 31, 2022 | |||||||||||||
Amounts payable to joint ventures | $ | ( | $ | ( |
Three Months Ended March 31, | ||||||||||||||
2023 | 2022 | |||||||||||||
Balance at beginning of period | $ | $ | ||||||||||||
Provision for loan loss obligations | ||||||||||||||
Charge-offs | ( | ( | ||||||||||||
Balance at end of period | $ | $ |
Three Months Ended March 31, | ||||||||||||||
(Dollars in thousands) | 2023 | 2022 | ||||||||||||
Loan originations by purpose: | ||||||||||||||
Purchase | $ | 3,512,771 | $ | 8,030,766 | ||||||||||
Refinance | 1,431,566 | 13,519,965 | ||||||||||||
Total loan originations | $ | 4,944,337 | $ | 21,550,731 | ||||||||||
Loan originations (units) | 16,338 | 64,951 | ||||||||||||
Licensed loan officers | 1,716 | 3,261 | ||||||||||||
Loans sold: | ||||||||||||||
Servicing retained | $ | 3,277,707 | $ | 17,122,716 | ||||||||||
Servicing released | 2,118,874 | 5,745,322 | ||||||||||||
Total loans sold | $ | 5,396,581 | $ | 22,868,038 | ||||||||||
Loans sold (units) | 17,218 | 68,149 | ||||||||||||
Gain on sale margin | 2.43 | % | 1.96 | % | ||||||||||
Pull through weighted gain on sale margin | 2.26 | 2.13 | ||||||||||||
IRLCs | $ | 8,468,435 | $ | 29,991,452 | ||||||||||
IRLCs (units) | 27,993 | 91,020 | ||||||||||||
Pull through weighted lock volume | $ | 5,325,488 | $ | 19,800,045 | ||||||||||
Servicing metrics | ||||||||||||||
Total servicing portfolio (unpaid principal balance) | $ | 141,673,464 | $ | 153,385,817 | ||||||||||
Total servicing portfolio (units) | 475,765 | 496,868 | ||||||||||||
60+ days delinquent ($) | $ | 1,282,432 | $ | 1,444,779 | ||||||||||
60+ days delinquent (%) | 0.91 | % | 0.94 | % | ||||||||||
Servicing rights at fair value, net(1) | $ | 2,016,568 | $ | 2,078,187 | ||||||||||
Weighted average servicing fee (2) | 0.30 | % | 0.29 | % | ||||||||||
Multiple(2) (3) | 5.1 | 4.9 |
Three Months Ended March 31, | Change $ | Change % | ||||||||||||||||||||||||
(Dollars in thousands) | 2023 | 2022 | ||||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||||
REVENUES: | ||||||||||||||||||||||||||
Net interest income | $ | 1,198 | $ | 13,076 | $ | (11,878) | (90.8) | % | ||||||||||||||||||
Gain on origination and sale of loans, net | 108,152 | 363,131 | (254,979) | (70.2) | ||||||||||||||||||||||
Origination income, net | 12,016 | 59,073 | (47,057) | (79.7) | ||||||||||||||||||||||
Servicing fee income | 118,961 | 111,059 | 7,902 | 7.1 | ||||||||||||||||||||||
Change in fair value of servicing rights, net | (52,806) | (68,383) | 15,577 | 22.8 | ||||||||||||||||||||||
Other income | 20,380 | 25,355 | (4,975) | (19.6) | ||||||||||||||||||||||
Total net revenues | 207,901 | 503,311 | (295,410) | (58.7) | ||||||||||||||||||||||
EXPENSES: | ||||||||||||||||||||||||||
Personnel expense | 141,027 | 345,993 | (204,966) | (59.2) | ||||||||||||||||||||||
Marketing and advertising expense | 35,914 | 101,513 | (65,599) | (64.6) | ||||||||||||||||||||||
Direct origination expense | 17,378 | 53,157 | (35,779) | (67.3) | ||||||||||||||||||||||
General and administrative expense | 56,134 | 49,748 | 6,386 | 12.8 | ||||||||||||||||||||||
Occupancy expense | 6,081 | 9,396 | (3,315) | (35.3) | ||||||||||||||||||||||
Depreciation and amortization | 10,026 | 10,545 | (519) | (4.9) | ||||||||||||||||||||||
Servicing expense | 4,834 | 21,511 | (16,677) | (77.5) | ||||||||||||||||||||||
Other interest expense | 43,090 | 14,393 | 28,697 | 199.4 | ||||||||||||||||||||||
Total expenses | 314,484 | 606,256 | (291,772) | (48.1) | ||||||||||||||||||||||
Loss before income taxes | (106,583) | (102,945) | (3,638) | (3.5) | ||||||||||||||||||||||
Income tax benefit | (14,862) | (11,627) | (3,235) | (27.8) | ||||||||||||||||||||||
Net loss | (91,721) | (91,318) | (403) | (0.4) | ||||||||||||||||||||||
Net loss attributable to noncontrolling interests | (48,814) | (56,577) | 7,763 | 13.7 | ||||||||||||||||||||||
Net loss attributable to loanDepot, Inc. | $ | (42,907) | $ | (34,741) | $ | (8,166) | 23.5 | |||||||||||||||||||
Three Months Ended March 31, | Change $ | Change % | ||||||||||||||||||||||||
(Dollars in thousands) | 2023 | 2022 | ||||||||||||||||||||||||
Discount from loan sales | $ | (26,669) | $ | (236,096) | $ | 209,427 | 88.7 | % | ||||||||||||||||||
Servicing rights additions | 59,295 | 269,760 | (210,465) | (78.0) | ||||||||||||||||||||||
Fair value gains (losses) on IRLC and LHFS | 73,884 | (393,759) | 467,643 | 118.8 | ||||||||||||||||||||||
Fair value (losses) gains from Hedging Instruments | (46,130) | 676,405 | (722,535) | (106.8) | ||||||||||||||||||||||
Discount points, rebates and lender paid costs | 57,446 | 60,067 | (2,621) | (4.4) | ||||||||||||||||||||||
Provision for loan loss obligation for loans sold | (9,674) | (13,246) | 3,572 | 27.0 | ||||||||||||||||||||||
Total gain on origination and sale of loans, net | $ | 108,152 | $ | 363,131 | $ | (254,979) | (70.2) |
(Dollars in thousands) | March 31, 2023 | December 31, 2022 | Change $ | Change % | ||||||||||||||||||||||
(Unaudited) | ||||||||||||||||||||||||||
ASSETS | ||||||||||||||||||||||||||
Cash and cash equivalents | $ | 798,119 | $ | 863,956 | (65,837) | (7.6) | % | |||||||||||||||||||
Restricted cash | 90,084 | 116,545 | (26,461) | (22.7) | ||||||||||||||||||||||
Accounts receivable, net | 99,381 | 145,279 | (45,898) | (31.6) | ||||||||||||||||||||||
Loans held for sale, at fair value | 2,039,367 | 2,373,427 | (334,060) | (14.1) | ||||||||||||||||||||||
Derivative assets, at fair value | 84,624 | 39,411 | 45,213 | 114.7 | ||||||||||||||||||||||
Servicing rights, at fair value | 2,028,788 | 2,037,447 | (8,659) | (0.4) | ||||||||||||||||||||||
Trading securities, at fair value | 95,561 | 94,243 | 1,318 | 1.4 | ||||||||||||||||||||||
Property and equipment, net | 88,877 | 92,889 | (4,012) | (4.3) | ||||||||||||||||||||||
Operating lease right-of-use assets | 35,362 | 35,668 | (306) | (0.9) | ||||||||||||||||||||||
Prepaid expenses and other assets | 139,904 | 155,982 | (16,078) | (10.3) | ||||||||||||||||||||||
Loans eligible for repurchase | 672,458 | 634,677 | 37,781 | 6.0 | ||||||||||||||||||||||
Investments in joint ventures | 18,266 | 20,410 | (2,144) | (10.5) | ||||||||||||||||||||||
Total assets | $ | 6,190,791 | $ | 6,609,934 | $ | (419,143) | (6.3) | |||||||||||||||||||
LIABILITIES & EQUITY | ||||||||||||||||||||||||||
Warehouse and other lines of credit | $ | 1,830,319 | $ | 2,146,602 | $ | (316,283) | (14.7) | |||||||||||||||||||
Accounts payable, accrued expenses and other liabilities | 449,641 | 488,696 | (39,055) | (8.0) | ||||||||||||||||||||||
Derivative liabilities, at fair value | 35,662 | 67,492 | (31,830) | (47.2) | ||||||||||||||||||||||
Liability for loans eligible for repurchase | 672,458 | 634,677 | 37,781 | 6.0 | ||||||||||||||||||||||
Operating lease liability | 57,837 | 61,675 | (3,838) | (6.2) | ||||||||||||||||||||||
Debt obligations, net | 2,303,712 | 2,289,319 | 14,393 | 0.6 | ||||||||||||||||||||||
Total liabilities | 5,349,629 | 5,688,461 | (338,832) | (6.0) | ||||||||||||||||||||||
Total equity | 841,162 | 921,473 | (80,311) | (8.7) | ||||||||||||||||||||||
Total liabilities and equity | $ | 6,190,791 | $ | 6,609,934 | $ | (419,143) | (6.3) |
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 | $ | 1,830,319 | $ | 1,330,319 | $ | 500,000 | $ | — | $ | — | ||||||||||||||||||||||
Debt obligations (1) | ||||||||||||||||||||||||||||||||
Secured credit facilities | 1,111,812 | 763,830 | 347,982 | — | — | |||||||||||||||||||||||||||
Term Notes | 200,000 | 200,000 | — | — | — | |||||||||||||||||||||||||||
Senior Notes | 1,002,475 | — | 500,000 | — | 502,475 | |||||||||||||||||||||||||||
Operating lease obligations (2) | 69,489 | 22,621 | 30,207 | 15,006 | 1,654 | |||||||||||||||||||||||||||
Naming and promotional rights agreements | 87,069 | 20,630 | 37,939 | 12,000 | 16,500 | |||||||||||||||||||||||||||
Total contractual obligations | $ | 4,301,164 | $ | 2,337,400 | $ | 1,416,128 | $ | 27,006 | $ | 520,629 |
Reconciliation of Total Revenue to Adjusted Total Revenue (Dollars in thousands) (Unaudited): | Three Months Ended | |||||||||||||
March 31, 2023 | March 31, 2022 | |||||||||||||
Total net revenue | $ | 207,901 | $ | 503,311 | ||||||||||
Change in fair value of servicing rights net, of hedging gains and losses(1) | 18,289 | 1,295 | ||||||||||||
Adjusted total revenue | $ | 226,190 | $ | 504,606 |
Reconciliation of Net Income (Loss) to Adjusted Net Income (Loss) (Dollars in thousands) (Unaudited): | Three Months Ended | |||||||||||||
March 31, 2023 | March 31, 2022 | |||||||||||||
Net loss attributable to loanDepot, Inc. | $ | (42,907) | $ | (34,741) | ||||||||||
Net loss from the pro forma conversion of Class C common shares to Class A common shares(1) | (48,814) | (56,577) | ||||||||||||
Net loss | (91,721) | (91,318) | ||||||||||||
Adjustments to the benefit for income taxes(2) | 13,316 | 14,710 | ||||||||||||
Tax-effected net loss | (78,405) | (76,608) | ||||||||||||
Change in fair value of servicing rights, net of hedging gains and losses(3) | 18,289 | 1,295 | ||||||||||||
Stock-based compensation expense | 5,926 | 2,309 | ||||||||||||
Gain on extinguishment of debt | — | (10,528) | ||||||||||||
Loss on disposal of fixed assets | 261 | — | ||||||||||||
Other (recovery) impairment | (345) | — | ||||||||||||
Tax effect of adjustments(4) | (5,973) | 2,140 | ||||||||||||
Adjusted net loss | $ | (60,247) | $ | (81,392) |
Three Months Ended | |||||||||||||||||
March 31, 2023 | March 31, 2022 | ||||||||||||||||
Statutory U.S. federal income tax rate | 21.00 | % | 21.00 | % | |||||||||||||
State and local income taxes (net of federal benefit) | 6.28 | 5.00 | |||||||||||||||
Effective income tax rate | 27.28 | % | 26.00 | % |
Reconciliation of Adjusted Diluted Weighted Average Shares Outstanding to Diluted Weighted Average Shares Outstanding (Dollars in thousands except per share) (Unaudited) | Three Months Ended | |||||||||||||
March 31, 2023 | March 31, 2022 | |||||||||||||
Net loss attributable to loanDepot, Inc. | $ | (42,907) | $ | (34,741) | ||||||||||
Adjusted net loss | (60,247) | (81,392) | ||||||||||||
Share Data: | ||||||||||||||
Diluted weighted average shares of Class A and Class D common stock outstanding | 170,809,818 | 139,007,890 | ||||||||||||
Assumed pro forma conversion of weighted average Class C shares to Class A common stock (1) | 149,210,417 | 181,035,804 | ||||||||||||
Adjusted diluted weighted average shares outstanding | 320,020,235 | 320,043,694 | ||||||||||||
Diluted loss per share | $ | (0.25) | $ | (0.25) | ||||||||||
Adjusted diluted loss per share (2) | N/A | (0.25) |
Reconciliation of Net Income (Loss) to Adjusted EBITDA (LBITDA) (Dollars in thousands) (Unaudited): | Three Months Ended | |||||||||||||
March 31, 2023 | March 31, 2022 | |||||||||||||
Net loss | $ | (91,721) | $ | (91,318) | ||||||||||
Interest expense — non-funding debt(1) | 43,090 | 14,393 | ||||||||||||
Income tax benefit | (14,862) | (11,627) | ||||||||||||
Depreciation and amortization | 10,026 | 10,545 | ||||||||||||
Change in fair value of servicing rights, net of hedging gains and losses(2) | 18,289 | 1,295 | ||||||||||||
Stock-based compensation expense | 5,926 | 2,309 | ||||||||||||
Loss on disposal of fixed assets | 261 | — | ||||||||||||
Other (recovery) impairment | (345) | — | ||||||||||||
Adjusted LBITDA | $ | (29,336) | $ | (74,403) |
Exhibit No. | Description | ||||
3.1 | |||||
3.2 | |||||
10.1*+ | |||||
10.2+ | |||||
10.3+ | |||||
10.4 | |||||
10.5 | |||||
10.6+ | |||||
10.7+ | |||||
31.1* | |||||
31.2* | |||||
32.1* | |||||
32.2* | |||||
101.0 | Inline XBRL Document | ||||
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. |
Exhibit No. | Description | ||||
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). |
LOANDEPOT, INC. | ||||||||
Dated: May 10, 2023 | By: | /s/ Frank Martell | ||||||
Name: | Frank Martell | |||||||
Title: | President and Chief Executive Officer | |||||||
Dated: May 10, 2023 | By: | /s/ Patrick Flanagan | ||||||
Name: | Patrick Flanagan | |||||||
Title: | Chief Financial Officer | |||||||
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Concentration Category | Concentration Limit (percentages based on Maximum Purchase Amount) | ||||
Wet Mortgage Loans | [***] | ||||
Jumbo Mortgage Loans | [***] | ||||
Jumbo Mortgage Loans (Specialty) | [***] | ||||
Delegated Jumbo Mortgage Loans | [***] | ||||
Low FICO Government Loans | [***] | ||||
203K Loan | [***] | ||||
State Agency Program Loans | [***] | ||||
Manufactured Housing Mortgage Loans | [***] | ||||
Second Lien Mortgage Loan | [***] | ||||
Aged Mortgage Loans | [***] |
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Type of Mortgage Loan | Percentage | ||||
Conforming Mortgage Loans and Eligible Government Mortgage Loans (excluding Low FICO Government Loans, and 203K Loans) | [***] | ||||
Jumbo Mortgage Loans | [***] | ||||
Jumbo Mortgage Loans (Specialty) | [***] | ||||
Delegated Jumbo Mortgage Loans | [***] | ||||
Low FICO Government Loans | [***] | ||||
203K Loans | [***] | ||||
State Agency Program Loans | [***] | ||||
Manufactured Housing Mortgage Loans | [***] | ||||
Second Lien Mortgage Loan | [***] | ||||
Aged Mortgage Loans | [***] | ||||
Mortgage Loans exceeding the applicable Transaction Term Limitation | [***] |
nonhesmow1868 |
Type of Mortgage Loan | Percentage | ||||
Conforming Mortgage Loans and Eligible Government Mortgage Loans (excluding Low FICO Government Loans and 203K Loans) | [***] | ||||
Jumbo Mortgage Loans | [***] | ||||
Jumbo Mortgage Loans (Specialty) | [***] | ||||
Delegated Jumbo Mortgage Loans | [***] | ||||
Low FICO Government Loans | [***] | ||||
203K Loans | [***] | ||||
State Agency Program Loans | [***] | ||||
Manufactured Housing Mortgage Loans | [***] | ||||
Second Lien Mortgage Loan | [***] | ||||
Aged Mortgage Loans | [***] | ||||
Aged Jumbo Mortgage Loans | [***] | ||||
Aged State Agency Program Loan | [***] |
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/s/ Frank Martell | ||||||||
Frank Martell | ||||||||
Chief Executive Officer | ||||||||
(Principal Executive Officer) |
/s/ Patrick Flanagan | ||||||||
Patrick Flanagan | ||||||||
Chief Financial Officer | ||||||||
(Principal Financial Officer) |
CONSOLIDATED STATEMENTS OF EQUITY (Parenthetical) |
3 Months Ended |
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Mar. 31, 2022
$ / shares
| |
Class A and D | |
Dividends declared (in usd per share) | $ 0.08 |
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
3 Months Ended |
---|---|
Mar. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 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, 2023 are not necessarily indicative of the results that may be expected for the year ending December 31, 2023. 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, 2022 (“2022 Form 10-K”). Nature of Operations loanDepot, Inc. 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. As of March 31, 2023 the consolidated subsidiaries of LD Holdings included loanDepot.com, LLC, (“LDLLC”), Artemis Management LLC (“ART”), LD Settlement Services, LLC (“LDSS”), mello Holdings, LLC (“Mello”), and mello Credit Strategies LLC (“MCS”). 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, income from loan servicing, and fees charged for settlement services related to the origination and sale of loans. 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 2022 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” or the “Codification”). In the opinion of management, the unaudited condensed consolidated financial statements 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 LDLLC (the majority asset of the group), and 100% equity ownership in ART, LDSS, Mello, and MCS. The financial results of LD Holdings and its subsidiaries are consolidated with loanDepot, Inc., and the consolidated net earnings or loss are allocated to noncontrolling interest to reflect the entitlement of certain members that still hold Class A holdings units (“Holdco Units”) and Class C common stock, (“Continuing LLC Members”) as of the periods presented. 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. 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 significant estimates in certain areas, including determining the fair value of loans held for sale, servicing rights, derivative assets and derivative liabilities, trading securities, awards granted under the incentive equity plan, determining the loan loss obligation on sold loans and MSRs. Actual results could differ from those estimates. Concentration of Risk The Company has concentrated its 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. 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, 2023. The Company sells mortgage loans to various third-party investors. Three investors accounted for 11%, 29%, and 33% of the Company’s loan sales for the three months ended March 31, 2023. No other investors accounted for more than 5% of the loan sales for the three months ended March 31, 2023. The Company funds loans through warehouse and other lines of credit. As of March 31, 2023, 17% and 12% of the Company's warehouse lines were payable to two separate lenders.
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FAIR VALUE |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
FAIR VALUE | 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 2022 Form 10-K 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. The following tables present the carrying amount and estimated fair value of financial instruments included in the consolidated financial statements.
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.
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):
(1)Funded amount for IRLCs.
(1)Funded amount for IRLCs. The following presents the gains and losses included in earnings relating to the Company’s assets and liabilities that are measured at fair value on a recurring basis using significant unobservable inputs (Level 3):
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:
(1)The Company estimates the fair value of MSRs using an option-adjusted spread (“OAS”) model, which projects MSR cash flows over multiple interest rate scenarios in conjunction with the Company’s prepayment model, and then discounts these cash flows at risk-adjusted rates. (2)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 non-recurring basis as of March 31, 2023 or December 31, 2022. Financial Statement Items Measured at Amortized Cost Warehouse and other lines of credit - The Company’s warehouse and other lines of credit bear interest at a rate that is periodically adjusted based on a market index. The carrying value of warehouse and other lines of credit approximates fair value. Debt obligations, net - Debt consists of secured credit facilities, Term Notes, and Senior Notes. The Company’s secured credit facilities and Term Notes accrue interest at a stated base rate, plus a margin, they are highly liquid and short-term in nature and as a result, their carrying value approximated fair value as of March 31, 2023 and December 31, 2022. Fair value of the Company’s Senior Notes issued in October 2020 and March 2021 were estimated using the quoted market prices at March 31, 2023. The debt obligations are classified as Level 2 in the fair value hierarchy.
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LOANS HELD FOR SALE, AT FAIR VALUE |
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LOANS HELD FOR SALE, AT FAIR VALUE | LOANS HELD FOR SALE, AT FAIR VALUE The following table represents the unpaid principal balance of LHFS by product type of loan as of March 31, 2023 and December 31, 2022:
A summary of the changes in the balance of loans held for sale is as follows:
Gain on origination and sale of loans, net is comprised of the following components:
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SERVICING RIGHTS, AT FAIR VALUE |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Transfers and Servicing [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
SERVICING RIGHTS, AT FAIR VALUE | SERVICING RIGHTS, AT FAIR VALUE The outstanding principal balance of the servicing portfolio was comprised of the following:
A summary of the changes in the balance of servicing rights, net of servicing rights liability is as follows:
The following is a summary of the components of loan servicing fee income as reported in the Company’s consolidated statements of operations:
The following is a summary of the components of change in fair value of servicing rights, net as reported in the Company’s consolidated statements of operations:
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.
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.
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DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES | DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIESDerivatives instruments utilized by the Company primarily include interest rate lock commitments, forward sale contracts, 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 2022 Form 10-K. The following summarizes the Company’s outstanding derivative 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:
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BALANCE SHEET NETTING |
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Offsetting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
BALANCE SHEET NETTING | 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 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, 2023 and December 31, 2022, respectively. Refer to Note 8 – Warehouse and Other Lines of Credit for further details on cash collateral requirements.
(1)Secured debt obligations as of March 31, 2023 included secured credit facilities and Term Notes.
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VARIABLE INTEREST ENTITIES |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
VARIABLE INTEREST ENTITIES | VARIABLE INTEREST ENTITIES The determination of whether the assets and liabilities of the VIEs are consolidated or not consolidated in the consolidated balance sheets depends on the terms of the related transaction and the Company’s continuing involvement, if any, with the VIE. The Company is deemed the primary beneficiary and therefore consolidates VIEs for which it has both (a) the power, through voting rights or similar rights, to direct the activities that most significantly impact the VIE's economic performance, and (b) benefits, as defined, from the VIE. The Company determines whether it holds a significant variable interest in a VIE based on a consideration of both qualitative and quantitative factors regarding the nature, size, and form of its involvement with the VIE. The Company assesses whether it is the primary beneficiary of a VIE on an ongoing basis. The Company did not provide any non-contractual financial support to VIEs for the three months ended March 31, 2023 and year ended December 31, 2022. Consolidated VIEs The Company is a holding company, its sole material asset is its equity interest in LD Holdings and 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. The Company is involved in several types of securitization and financing transactions that utilize special purpose entities (“SPEs”). The Company’s principal use of SPEs is to obtain liquidity by securitizing certain of its financial and non-financial assets. SPEs involved in the Company’s securitization and other financing transactions are often considered VIEs. The Company consolidates securitization facilities that finance mortgage loans held for sale, and SPEs established as trusts to finance mortgage servicing rights and servicing advance receivables. The Company sells assets to a securitization or trust, which issue beneficial interests that are collateralized by the transferred assets and entitle the investors to specified cash flows generated therefrom. The Company may retain beneficial interests in the assets sold. The Company also holds certain 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 time period has elapsed. 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. The Company may sell mortgage loans to investors through private label securitizations which are accounted for either as sales or secured borrowings. The Company may retain economic interests in the securitized and sold assets, which are generally retained in the form of senior or subordinated interests, residual interests, and/or servicing rights. The Company evaluates its interests in each private label securitization for classification as a VIE. The Company accounts for a securitization as a sale when it has relinquished control over the transferred financial assets and does not hold other interests in the VIE that individually, or in the aggregate, would absorb more than an insignificant amount of the VIE’s expected losses or receive more than an insignificant amount of the VIE’s expected residual returns. The Company has an option to exercise a cleanup call to purchase the remaining mortgage loans and any trust property when the remaining aggregate principal balance is less than 10% of the initial aggregate principal balance. The table below presents a summary of the carrying value and balance sheet classification of assets and liabilities in the Company’s consolidated securitization and SPE VIEs.
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.
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 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, 2023, the remaining principal balance of loans transferred to these securitization trusts was $2.3 billion of which $10.6 million was 90 days or more past due. Investments in joint ventures The Company’s joint ventures include investments with home builders, real estate brokers, and commercial real estate companies to provide loan origination services and real estate settlement services to customers referred by the Company’s joint venture partners. The Company is generally not determined to be the primary beneficiary in its joint venture VIEs because it does not have the power, through voting rights or similar rights, to direct the activities that most significantly impact the economic performance of the VIE. The Company’s pro rata share of net earnings of joint ventures was $3.8 million for the three months ended March 31, 2023, and $2.0 million for the three months ended March 31, 2022, and is included in other income in the consolidated statements of operations.
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WAREHOUSE AND OTHER LINES OF CREDIT |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
WAREHOUSE AND OTHER LINES OF CREDIT | WAREHOUSE AND OTHER LINES OF CREDITAt March 31, 2023, the Company was a party to 9 revolving lines of credit with lenders providing $4.1 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 SOFR, or other alternative base rate, 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, 2023, the interest rate was comprised of the applicable base rate plus a spread ranging from 1.37% 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 are scheduled to expire through 2023. As of March 31, 2023 there was one securitization facility with an original three year term scheduled to expire in 2024. All 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, 2023 and December 31, 2022, the Company had posted a total of $7.8 million and $11.0 million, restricted cash as collateral with our warehouse lenders and securitization facilities of which $4.3 million and $4.3 million were the minimum required balances. Under the terms of these warehouse lines, the Company is required to maintain various financial and other covenants. As of March 31, 2023, the Company amended certain warehouse lines related to certain profitability covenants, following which the Company was in compliance with those financial covenants. Securitization Facilities In October 2021, the Company issued notes and a class of owner trust certificates through an additional securitization facility (“2021-3 Securitization Facility”) backed by a revolving warehouse line of credit. The 2021-3 Securitization Facility is secured by newly originated, 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 2021-3 Securitization Facility issued $500.0 million in notes that bear interest at 30-day LIBOR, or other alternative base rate such as SOFR, plus a margin. The 2021-3 Securitization Facility will terminate on the earlier of (i) the three-year anniversary of the initial purchase date, (ii) the Company exercising its right to optional prepayment in full, and (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, 2023 and December 31, 2022:
(1)The total facility is available both to fund loan originations and also provide liquidity under a gestation facility to finance recently sold MBS up to the MBS settlement date. (2)In addition to the warehouse line, the lender provides a separate gestation facility to finance recently sold MBS up to the MBS settlement date. (3)In May 2023, this facility was extended to April 2024. (4)In addition to the outstanding balance secured by mortgage loans, the Company has $126.9 million outstanding to finance servicing rights included within debt obligations in the consolidated balance sheets. In May 2023, this facility was extended to November 2023 and total facility reduced to $600.0 million of which $250.0 million is committed. (5)Securitization backed by a revolving warehouse facility to finance newly originated first-lien fixed and adjustable rate mortgage loans. The following table presents information on borrowings under warehouse and securitization facilities:
The following table presents the outstanding debt as of March 31, 2023 and December 31, 2022:
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 obtained amendments relating to certain profitability covenants. As a result, the Company was in compliance with all such financial covenants as of March 31, 2023. Secured Credit Facilities Secured credit facilities are revolving facilities collateralized by MSRs, trading securities, and servicing advances. MSR Facilities In October 2014, the Company entered into a $25.0 million credit facility to finance servicing rights and for other working capital needs and general corporate purposes. The Company has entered into subsequent amendments to increase and decrease the size of the facility and extend the maturity date. The facility is secured by Freddie Mac mortgage servicing rights with a fair value of $275.9 million as of March 31, 2023 and accrues interest at a base rate per annum of 30-day LIBOR, or other alternative base rate such as SOFR, plus a margin. As of March 31, 2023, there was $200.0 million outstanding on this facility with a maturity of June 2023. At March 31, 2023, capacity under the facility was $200.0 million. Advances for servicing rights are determined using a borrowing base formula calculated against the fair market value of the pledged servicing rights. In April 2023, capacity under this facility was lowered to $185.0 million. In December 2021, the Company entered into a credit facility agreement which provides $300.0 million in borrowing capacity, with an option to increase up to $500.0 million upon mutual consent, available to the Company. The facility is secured by Freddie Mac mortgage servicing rights with a fair value of $514.4 million as of March 31, 2023. The facility bears interest at SOFR, plus a margin per annum and matures in December 2023. At March 31, 2023, there was $300.0 million outstanding on this facility and $0.4 million in unamortized deferred financing costs. In January 2022, the Company entered into a credit facility agreement which provides $500.0 million in borrowing capacity. The facility is secured by Fannie Mae mortgage servicing rights with a fair value of $627.0 million as of March 31, 2023. The facility bears interest at SOFR, plus a margin per annum and matures in January 2025. At March 31, 2023, there was $348.0 million outstanding on this facility and $0.1 million in unamortized deferred financing costs. In August 2017, the Company established the GMSR Trust to finance Ginnie Mae mortgage servicing rights owned by the Company through issuance of either variable funding notes or term notes, in each case secured by participation certificates held by the GMSR Trust. As of March 31, 2023, the Company had pledged participation certificates representing beneficial interests in Ginnie Mae mortgage servicing rights to the GMSR Trust with a fair value of $553.2 million. At March 31, 2023 the maximum borrowing capacity of the variable funding notes was $200.0 million. The variable funding notes bear interest at SOFR plus a margin per annum and mature in May 2023. As of March 31, 2023, there were $126.9 million in variable funding notes outstanding to finance Ginnie Mae mortgage servicing rights owned by the Company. Securities Financing Facilities The Company has entered into master repurchase agreements to finance retained interest securities related to its securitizations. Each of the securities financing facilities has a 90 day term and accrues interest at a rate of 90-day SOFR, plus a margin. The securities financing facilities have an advance rate between 50% and 90% based on classes of the securities and are secured by trading securities which represent our retained interests in the credit risk of the assets collateralizing certain securitization transactions. As of March 31, 2023, the trading securities had a fair value of $95.6 million on the consolidated balance sheets and there were $86.6 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 and mature in September 2023 (unless earlier redeemed in accordance with their terms). At March 31, 2023, there was $20.2 million in 2020-VF1 Notes outstanding. In November 2021, the Company, through the GMSR Trust issued variable funding notes secured by principal and interest advance receivables and servicing advance receivables with respect to residential mortgage loans serviced on behalf of Ginnie Mae. The variable funding notes bear interest at SOFR plus a margin per annum and mature in May 2023. As of March 31, 2023, there was $30.1 million outstanding on the variable funding notes. Term Notes In October 2018, the Company, through the GMSR Trust issued the Series 2018-GT1 Term Notes (“Term Notes”). The Term Notes accrue interest at 30-day LIBOR, or other alternative base rate such as SOFR, plus a margin per annum and mature in October 2023 or, if extended pursuant to the terms of the related indenture supplement, October 2025 (unless earlier redeemed in accordance with their terms). At March 31, 2023, there was $200.0 million in Term Notes outstanding and $0.2 million in unamortized deferred financing costs. Senior Notes In October 2020, the Company issued $500.0 million in aggregate principal amount of 6.50% senior unsecured 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. At March 31, 2023, there was $500.0 million in 2025 Senior Notes outstanding and $4.6 million in unamortized deferred financing costs. In March 2021, the Company issued $600.0 million in aggregate principal amount of 6.125% senior unsecured notes due 2028 (the “2028 Senior Notes” and together with the 2025 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. At any time prior to April 1, 2024, the Company may redeem some or all of the 2028 Senior Notes at a price equal to 100% of the principal amount of the 2028 Senior Notes, plus accrued and unpaid interest, if any, to, but not including, the date of redemption plus a make-whole premium. During the first quarter of 2022, the Company repurchased $97.5 million of 2028 Senior Notes at an average purchase price of 87.9% of par which resulted in a $10.5 million gain on extinguishment of debt recorded in other interest expense on the consolidated statement of operations. The Company may also redeem the 2028 Senior Notes, in whole or in part, at any time on or after April 1, 2024 at various redemption prices. In addition, subject to certain conditions at any time prior to April 1, 2024, the Company may redeem up to 40% of the principal amount of the 2028 Senior Notes with the proceeds of certain equity offerings at a redemption price of 106.125% of the principal amount of the 2028 Senior Notes, together with accrued and unpaid interest, if any, to, but not including, the date of redemption. At March 31, 2023, there was $502.5 million in 2028 Senior Notes outstanding and $5.3 million in unamortized deferred financing costs. Interest Expense Interest expense on all outstanding debt obligations with variable rates is paid based on SOFR, or other alternative base rate, plus a margin ranging from 0.80% - 3.50%.
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DEBT OBLIGATIONS |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
DEBT OBLIGATIONS | WAREHOUSE AND OTHER LINES OF CREDITAt March 31, 2023, the Company was a party to 9 revolving lines of credit with lenders providing $4.1 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 SOFR, or other alternative base rate, 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, 2023, the interest rate was comprised of the applicable base rate plus a spread ranging from 1.37% 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 are scheduled to expire through 2023. As of March 31, 2023 there was one securitization facility with an original three year term scheduled to expire in 2024. All 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, 2023 and December 31, 2022, the Company had posted a total of $7.8 million and $11.0 million, restricted cash as collateral with our warehouse lenders and securitization facilities of which $4.3 million and $4.3 million were the minimum required balances. Under the terms of these warehouse lines, the Company is required to maintain various financial and other covenants. As of March 31, 2023, the Company amended certain warehouse lines related to certain profitability covenants, following which the Company was in compliance with those financial covenants. Securitization Facilities In October 2021, the Company issued notes and a class of owner trust certificates through an additional securitization facility (“2021-3 Securitization Facility”) backed by a revolving warehouse line of credit. The 2021-3 Securitization Facility is secured by newly originated, 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 2021-3 Securitization Facility issued $500.0 million in notes that bear interest at 30-day LIBOR, or other alternative base rate such as SOFR, plus a margin. The 2021-3 Securitization Facility will terminate on the earlier of (i) the three-year anniversary of the initial purchase date, (ii) the Company exercising its right to optional prepayment in full, and (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, 2023 and December 31, 2022:
(1)The total facility is available both to fund loan originations and also provide liquidity under a gestation facility to finance recently sold MBS up to the MBS settlement date. (2)In addition to the warehouse line, the lender provides a separate gestation facility to finance recently sold MBS up to the MBS settlement date. (3)In May 2023, this facility was extended to April 2024. (4)In addition to the outstanding balance secured by mortgage loans, the Company has $126.9 million outstanding to finance servicing rights included within debt obligations in the consolidated balance sheets. In May 2023, this facility was extended to November 2023 and total facility reduced to $600.0 million of which $250.0 million is committed. (5)Securitization backed by a revolving warehouse facility to finance newly originated first-lien fixed and adjustable rate mortgage loans. The following table presents information on borrowings under warehouse and securitization facilities:
The following table presents the outstanding debt as of March 31, 2023 and December 31, 2022:
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 obtained amendments relating to certain profitability covenants. As a result, the Company was in compliance with all such financial covenants as of March 31, 2023. Secured Credit Facilities Secured credit facilities are revolving facilities collateralized by MSRs, trading securities, and servicing advances. MSR Facilities In October 2014, the Company entered into a $25.0 million credit facility to finance servicing rights and for other working capital needs and general corporate purposes. The Company has entered into subsequent amendments to increase and decrease the size of the facility and extend the maturity date. The facility is secured by Freddie Mac mortgage servicing rights with a fair value of $275.9 million as of March 31, 2023 and accrues interest at a base rate per annum of 30-day LIBOR, or other alternative base rate such as SOFR, plus a margin. As of March 31, 2023, there was $200.0 million outstanding on this facility with a maturity of June 2023. At March 31, 2023, capacity under the facility was $200.0 million. Advances for servicing rights are determined using a borrowing base formula calculated against the fair market value of the pledged servicing rights. In April 2023, capacity under this facility was lowered to $185.0 million. In December 2021, the Company entered into a credit facility agreement which provides $300.0 million in borrowing capacity, with an option to increase up to $500.0 million upon mutual consent, available to the Company. The facility is secured by Freddie Mac mortgage servicing rights with a fair value of $514.4 million as of March 31, 2023. The facility bears interest at SOFR, plus a margin per annum and matures in December 2023. At March 31, 2023, there was $300.0 million outstanding on this facility and $0.4 million in unamortized deferred financing costs. In January 2022, the Company entered into a credit facility agreement which provides $500.0 million in borrowing capacity. The facility is secured by Fannie Mae mortgage servicing rights with a fair value of $627.0 million as of March 31, 2023. The facility bears interest at SOFR, plus a margin per annum and matures in January 2025. At March 31, 2023, there was $348.0 million outstanding on this facility and $0.1 million in unamortized deferred financing costs. In August 2017, the Company established the GMSR Trust to finance Ginnie Mae mortgage servicing rights owned by the Company through issuance of either variable funding notes or term notes, in each case secured by participation certificates held by the GMSR Trust. As of March 31, 2023, the Company had pledged participation certificates representing beneficial interests in Ginnie Mae mortgage servicing rights to the GMSR Trust with a fair value of $553.2 million. At March 31, 2023 the maximum borrowing capacity of the variable funding notes was $200.0 million. The variable funding notes bear interest at SOFR plus a margin per annum and mature in May 2023. As of March 31, 2023, there were $126.9 million in variable funding notes outstanding to finance Ginnie Mae mortgage servicing rights owned by the Company. Securities Financing Facilities The Company has entered into master repurchase agreements to finance retained interest securities related to its securitizations. Each of the securities financing facilities has a 90 day term and accrues interest at a rate of 90-day SOFR, plus a margin. The securities financing facilities have an advance rate between 50% and 90% based on classes of the securities and are secured by trading securities which represent our retained interests in the credit risk of the assets collateralizing certain securitization transactions. As of March 31, 2023, the trading securities had a fair value of $95.6 million on the consolidated balance sheets and there were $86.6 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 and mature in September 2023 (unless earlier redeemed in accordance with their terms). At March 31, 2023, there was $20.2 million in 2020-VF1 Notes outstanding. In November 2021, the Company, through the GMSR Trust issued variable funding notes secured by principal and interest advance receivables and servicing advance receivables with respect to residential mortgage loans serviced on behalf of Ginnie Mae. The variable funding notes bear interest at SOFR plus a margin per annum and mature in May 2023. As of March 31, 2023, there was $30.1 million outstanding on the variable funding notes. Term Notes In October 2018, the Company, through the GMSR Trust issued the Series 2018-GT1 Term Notes (“Term Notes”). The Term Notes accrue interest at 30-day LIBOR, or other alternative base rate such as SOFR, plus a margin per annum and mature in October 2023 or, if extended pursuant to the terms of the related indenture supplement, October 2025 (unless earlier redeemed in accordance with their terms). At March 31, 2023, there was $200.0 million in Term Notes outstanding and $0.2 million in unamortized deferred financing costs. Senior Notes In October 2020, the Company issued $500.0 million in aggregate principal amount of 6.50% senior unsecured 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. At March 31, 2023, there was $500.0 million in 2025 Senior Notes outstanding and $4.6 million in unamortized deferred financing costs. In March 2021, the Company issued $600.0 million in aggregate principal amount of 6.125% senior unsecured notes due 2028 (the “2028 Senior Notes” and together with the 2025 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. At any time prior to April 1, 2024, the Company may redeem some or all of the 2028 Senior Notes at a price equal to 100% of the principal amount of the 2028 Senior Notes, plus accrued and unpaid interest, if any, to, but not including, the date of redemption plus a make-whole premium. During the first quarter of 2022, the Company repurchased $97.5 million of 2028 Senior Notes at an average purchase price of 87.9% of par which resulted in a $10.5 million gain on extinguishment of debt recorded in other interest expense on the consolidated statement of operations. The Company may also redeem the 2028 Senior Notes, in whole or in part, at any time on or after April 1, 2024 at various redemption prices. In addition, subject to certain conditions at any time prior to April 1, 2024, the Company may redeem up to 40% of the principal amount of the 2028 Senior Notes with the proceeds of certain equity offerings at a redemption price of 106.125% of the principal amount of the 2028 Senior Notes, together with accrued and unpaid interest, if any, to, but not including, the date of redemption. At March 31, 2023, there was $502.5 million in 2028 Senior Notes outstanding and $5.3 million in unamortized deferred financing costs. Interest Expense Interest expense on all outstanding debt obligations with variable rates is paid based on SOFR, or other alternative base rate, plus a margin ranging from 0.80% - 3.50%.
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EQUITY |
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Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
EQUITY | 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 $437.3 million and $488.0 million as of March 31, 2023 and December 31, 2022, 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, 2023 and December 31, 2022.
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EARNINGS (LOSS) PER SHARE |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
EARNINGS (LOSS) PER SHARE | EARNINGS (LOSS) PER SHARE Basic earnings (loss) per share of Class A common stock and Class D common stock is computed by dividing net income (loss) attributable to loanDepot, Inc. 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 by dividing net income (loss) attributable to loanDepot, Inc. 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. There was no Class B common stock outstanding as of March 31, 2023 or 2022. The following table sets forth the calculation of basic and diluted earnings (loss) per share for Class A common stock and Class D common stock:
For the three months ended March 31, 2023 and March 31, 2022, 149,210,417 and 181,035,804 shares of Class C common stock were evaluated for the assumed exchange of noncontrolling interests and determined to be anti-dilutive, and thus were excluded from the computation of diluted loss per share. For the three months March 31, 2023, 21,470,046 of Class A RSUs, nonqualified stock options, and ESPP shares were determined to be anti-dilutive, and thus excluded from the computation of diluted loss per share. For the three months ended March 31, 2022 and 2,608,518 of Class A RSUs were determined to be anti-dilutive, and thus excluded from the computation of diluted loss per share.
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INCOME TAXES |
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Mar. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | 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, 2023 and December 31, 2022, the Company had a deferred tax asset before any valuation allowance of $127.2 million and $70.5 million, respectively, and a deferred tax liability of $230.4 million and $191.6 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, 2023 and December 31, 2022 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, 2023 and December 31, 2022 using the combined federal and state rate (less federal benefit) of 27.3%. 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, 2023, the Company had a valuation allowance of deferred tax assets $0.4 million on tax credits that have limited carryforward periods and may expire prior to the Company 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 $52.1 million and $50.7 million as of March 31, 2023 and December 31, 2022, respectively, which represents the Company’s estimate of the aggregate amount that it will pay under the TRA, refer to Note 14- Commitments and Contingencies, for further information on the TRA liability.
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RELATED PARTY TRANSACTIONS |
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RELATED PARTY TRANSACTIONS | RELATED PARTY TRANSACTIONSIn 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 comprise 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, costs incurred, and amounts payable to joint ventures were as follows:
The Company has entered into a TRA with Parthenon Stockholders and certain Continuing LLC Members. There were no payments made during the three months ended March 31, 2023 or the three months ended March 31, 2022.
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COMMITMENTS AND CONTINGENCIES |
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Mar. 31, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
COMMITMENTS AND CONTINGENCIES | 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 amounts reported in the accompanying consolidated balance sheets. The balances held for the Company’s customers totaled $3.6 million and $5.1 million at March 31, 2023 and December 31, 2022, respectively. Legal Proceedings The Company is a defendant in, or a party to, legal actions and proceedings that arise in the ordinary course of business. In some of these actions and proceedings, claims for monetary damages are asserted against the Company. These matters include actions alleging improper lending practices, improper servicing, quiet title actions, improper foreclosure practices, violations of consumer protection laws, etc. and on account of consumer bankruptcies. In many of these actions, the Company may not be the real party of interest (because the Company is not the servicer of the loan or the holder of the note) but it may appear in the pleadings because it is in the chain of title to property over which there may be a dispute. Such matters may be indemnified and managed by the appropriate party, which may be the Company’s subservicer or a former subservicer. In other cases, such as lien avoidance cases brought in bankruptcy, the Company is insured by title insurance, and the case is turned over to the title insurer who tenders the Company’s defense. In some of these actions and proceedings, claims for monetary damages are asserted against the Company. In view of the inherent difficulty of predicting the outcome of such legal actions and proceedings, the Company generally cannot predict what the eventual outcome of the pending matters will be, what the timing of the ultimate resolution of these matters will be, or what the eventual loss related to each pending matter may be, if any. 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. 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. Any estimated loss is subject to significant judgment and is based upon currently available information, a variety of assumptions, and known and unknown uncertainties. Where available information indicates that it is probable a liability has been incurred and the Company can reasonably estimate the amount of the loss, an accrued liability is established. The actual costs of resolving these proceedings may be substantially higher or lower than the amounts accrued. Employment Litigation On December 24, 2020, the Company received a demand letter from one of the senior members of its operations team alleging, among other things, loan origination noncompliance and various employment related claims, including hostile work environment and gender discrimination, with unspecified damages. The executive has since resigned her position with the Company. On September 21, 2021, Plaintiff filed her complaint led with the Superior Court of the State of California, County of Orange and an amended complaint was filed on December 21, 2021. Following some motion practice, on June 30, 2022, the Company filed its answer and affirmative defenses to the amended complaint. The Company deposed the Plaintiff and anticipates filing its Motion for Summary Judgment, or in the Alternative, Summary Adjudication on or before May 17, 2023. The plaintiff seeks damages in excess of $75 million. The Company believes this lawsuit is without merit continues to vigorously defend against it. Discovery in this matter is still ongoing. While the Company’s management does not believe these allegations have merit, defending such allegations has resulted in and will likely continue to result in substantial costs and a diversion of management’s attention and resources. The ultimate outcome of the other legal proceedings is uncertain, and the amount of any future potential loss is not considered probable or estimable. The Company will incur defense costs and other expenses in connection with these legal proceedings. If the final resolution of any legal proceedings is unfavorable, it could have a material adverse effect on the Company’s business and financial condition. Based on the Company’s current understanding of these pending legal actions and proceedings, management does not believe that judgments or settlements 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 consolidated financial position, results of operations or cash flows for the years in which they are resolved. Regulatory Requirements The Company is subject to various capital requirements by the U.S. Department of Housing and Urban Development (“HUD”); lenders of the warehouse lines of credit; and secondary markets investors. Failure to maintain minimum capital requirements could result in the inability to participate in HUD-assisted mortgage insurance programs, to borrow funds from warehouse line lenders or to sell or service mortgage loans. As of March 31, 2023, the Company was in compliance with its selling and servicing capital requirements. 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, 2023 and December 31, 2022 approximated $3.2 billion and $2.2 billion, respectively. These loan commitments are treated as derivatives and are carried at fair value, refer to Note 5- 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. There have been charge-offs associated with early payoffs, early payment defaults and losses related to representations, warranties, and other provisions for the three months ended March 31, 2023. The activity related to the loan loss obligation for sold loans is as follows:
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 $0.8 million and $1.1 million as of March 31, 2023 and December 31, 2022, respectively. TRA Liability The Company recognized a TRA liability of $52.1 million and $50.7 million as of March 31, 2023 and December 31, 2022, respectively, which represents the Company’s estimate of the aggregate amount that it will pay under the TRA as a result of the offering transaction.
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REGULATORY CAPITAL AND LIQUIDITY REQUIREMENTS |
3 Months Ended |
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Mar. 31, 2023 | |
Mortgage Banking [Abstract] | |
REGULATORY CAPITAL AND LIQUIDITY REQUIREMENTS | REGULATORY CAPITAL AND LIQUIDITY REQUIREMENTS The Company, through certain subsidiaries, is required to maintain minimum net worth, liquidity and other financial requirements specified in certain of its selling and servicing agreements, including: •Ginnie Mae single-family issuers. The eligibility requirements include net worth of $2.5 million plus 0.35% of outstanding Ginnie Mae single-family obligations and a liquidity requirement equal to the greater of $1.0 million or 0.10% of outstanding Ginnie Mae single-family securities. •Fannie Mae and Freddie Mac. The eligibility requirements for seller/servicers include tangible net worth of $2.5 million plus 0.25% of the Company’s total single-family servicing portfolio, excluding loans subserviced for others and a liquidity requirement equal to 0.035% of the aggregate UPB serviced for the agencies plus 2.0% of total nonperforming agency servicing UPB in excess of 6%. •HUD. The eligibility requirements include a minimum adjusted net worth of $1.0 million plus 1% of the total volume in excess of $25.0 million of FHA Single Family Mortgages originated, underwritten, serviced, and/or purchased during the prior fiscal year, up to a maximum required adjusted net worth of $2.5 million. •Fannie Mae, Freddie Mac and Ginnie Mae. The Company is also required to hold a ratio of Adjusted/Tangible Net Worth to Total Assets greater than 6%. To the extent that these requirements are not met, the Company may be subject to a variety of regulatory actions which could have a material adverse impact on our results of operations and financial condition. The most restrictive of the minimum net worth and capital requirements require the Company to maintain a minimum adjusted net worth balance of $132.0 million as of March 31, 2023. The Company was in compliance with the net worth, liquidity and other financial requirements of its selling and servicing requirements as of March 31, 2023.
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DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) |
3 Months Ended |
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Mar. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Consolidation | 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” or the “Codification”). In the opinion of management, the unaudited condensed consolidated financial statements 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 LDLLC (the majority asset of the group), and 100% equity ownership in ART, LDSS, Mello, and MCS. The financial results of LD Holdings and its subsidiaries are consolidated with loanDepot, Inc., and the consolidated net earnings or loss are allocated to noncontrolling interest to reflect the entitlement of certain members that still hold Class A holdings units (“Holdco Units”) and Class C common stock, (“Continuing LLC Members”) as of the periods presented. 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. 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.
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Basis of Presentation | 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” or the “Codification”). In the opinion of management, the unaudited condensed consolidated financial statements 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 LDLLC (the majority asset of the group), and 100% equity ownership in ART, LDSS, Mello, and MCS. The financial results of LD Holdings and its subsidiaries are consolidated with loanDepot, Inc., and the consolidated net earnings or loss are allocated to noncontrolling interest to reflect the entitlement of certain members that still hold Class A holdings units (“Holdco Units”) and Class C common stock, (“Continuing LLC Members”) as of the periods presented. 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. 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.
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Use of Estimates | 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 significant estimates in certain areas, including determining the fair value of loans held for sale, servicing rights, derivative assets and derivative liabilities, trading securities, awards granted under the incentive equity plan, determining the loan loss obligation on sold loans and MSRs. Actual results could differ from those estimates.
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Concentration of Risk | Concentration of Risk The Company has concentrated its 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. 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, 2023. The Company sells mortgage loans to various third-party investors. Three investors accounted for 11%, 29%, and 33% of the Company’s loan sales for the three months ended March 31, 2023. No other investors accounted for more than 5% of the loan sales for the three months ended March 31, 2023. The Company funds loans through warehouse and other lines of credit. As of March 31, 2023, 17% and 12% of the Company's warehouse lines were payable to two separate lenders.
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FAIR VALUE (Tables) |
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Fair Value Disclosures [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | The following tables present the carrying amount and estimated fair value of financial instruments included in the consolidated financial statements.
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.
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Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation | 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):
(1)Funded amount for IRLCs.
(1)Funded amount for IRLCs. The following presents the gains and losses included in earnings relating to the Company’s assets and liabilities that are measured at fair value on a recurring basis using significant unobservable inputs (Level 3):
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Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation | 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):
(1)Funded amount for IRLCs.
(1)Funded amount for IRLCs. The following presents the gains and losses included in earnings relating to the Company’s assets and liabilities that are measured at fair value on a recurring basis using significant unobservable inputs (Level 3):
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Fair Value Measurement Inputs and Valuation Techniques | 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:
(1)The Company estimates the fair value of MSRs using an option-adjusted spread (“OAS”) model, which projects MSR cash flows over multiple interest rate scenarios in conjunction with the Company’s prepayment model, and then discounts these cash flows at risk-adjusted rates. (2)Weighted average inputs are based on the committed amounts for IRLCs and the UPB of the underlying loans for servicing rights.
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LOANS HELD FOR SALE, AT FAIR VALUE (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Unpaid Principal Balance of LHFS by Type of Loan | The following table represents the unpaid principal balance of LHFS by product type of loan as of March 31, 2023 and December 31, 2022:
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Summary of Changes in Balance of Loans Held For Sale | A summary of the changes in the balance of loans held for sale is as follows:
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Components of Gain on Origination and Sale of Loans, Net | Gain on origination and sale of loans, net is comprised of the following components:
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SERVICING RIGHTS, AT FAIR VALUE (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Transfers and Servicing [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Outstanding Principal Balance of Servicing Rights | The outstanding principal balance of the servicing portfolio was comprised of the following:
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Summary of Changes in Servicing Rights | A summary of the changes in the balance of servicing rights, net of servicing rights liability is as follows:
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Summary of Components of Loan Servicing Fee Income | The following is a summary of the components of loan servicing fee income as reported in the Company’s consolidated statements of operations:
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Summary of Components of Changes in Fair Value of Servicing Rights | The following is a summary of the components of change in fair value of servicing rights, net as reported in the Company’s consolidated statements of operations:
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Servicing Rights Sensitivity Analysis | 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.
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DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Derivative Instruments | The following summarizes the Company’s outstanding derivative instruments:
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Net Gains (Losses) on Derivative Financial Instruments | 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:
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BALANCE SHEET NETTING (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Offsetting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Offsetting Assets | 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 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, 2023 and December 31, 2022, respectively. Refer to Note 8 – Warehouse and Other Lines of Credit for further details on cash collateral requirements.
(1)Secured debt obligations as of March 31, 2023 included secured credit facilities and Term Notes.
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Offsetting Liabilities | 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 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, 2023 and December 31, 2022, respectively. Refer to Note 8 – Warehouse and Other Lines of Credit for further details on cash collateral requirements.
(1)Secured debt obligations as of March 31, 2023 included secured credit facilities and Term Notes.
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VARIABLE INTEREST ENTITIES (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Investment in VIEs | The table below presents a summary of the carrying value and balance sheet classification of assets and liabilities in the Company’s consolidated securitization and SPE VIEs.
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WAREHOUSE AND OTHER LINES OF CREDIT (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Debt | The following table presents information on warehouse and securitization facilities and the outstanding balance as of March 31, 2023 and December 31, 2022:
(1)The total facility is available both to fund loan originations and also provide liquidity under a gestation facility to finance recently sold MBS up to the MBS settlement date. (2)In addition to the warehouse line, the lender provides a separate gestation facility to finance recently sold MBS up to the MBS settlement date. (3)In May 2023, this facility was extended to April 2024. (4)In addition to the outstanding balance secured by mortgage loans, the Company has $126.9 million outstanding to finance servicing rights included within debt obligations in the consolidated balance sheets. In May 2023, this facility was extended to November 2023 and total facility reduced to $600.0 million of which $250.0 million is committed. (5)Securitization backed by a revolving warehouse facility to finance newly originated first-lien fixed and adjustable rate mortgage loans. The following table presents information on borrowings under warehouse and securitization facilities:
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DEBT OBLIGATIONS (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Information on Outstanding Debt | The following table presents the outstanding debt as of March 31, 2023 and December 31, 2022:
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EQUITY (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Ownership of LD Holdings | The following table summarizes the ownership of LD Holdings as of March 31, 2023 and December 31, 2022.
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EARNINGS (LOSS) PER SHARE (Tables) |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Earnings Per Share, Basic and Diluted | The following table sets forth the calculation of basic and diluted earnings (loss) per share for Class A common stock and Class D common stock:
|
RELATED PARTY TRANSACTIONS (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Related Party Transactions [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Related Party Transactions | Fees earned, costs incurred, and amounts payable to joint ventures were as follows:
|
COMMITMENTS AND CONTINGENCIES (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Mar. 31, 2023 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Loan Loss Obligation | The activity related to the loan loss obligation for sold loans is as follows:
|
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Consolidation and Basis of Presentation (Details) |
Mar. 31, 2023 |
---|---|
LDLLC | |
Schedule of Equity Method Investments [Line Items] | |
Ownership percentage | 99.99% |
ART, LDSS, Mello, and MCS | |
Schedule of Equity Method Investments [Line Items] | |
Ownership percentage | 100.00% |
DESCRIPTION OF BUSINESS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Non-controlling Interests (Details) |
Feb. 12, 2021 |
---|---|
Noncontrolling Interest [Line Items] | |
Stock, exchange ratio | 1 |
FAIR VALUE - Assets and Liabilities on Recurring Basis Using Significant Unobservable Inputs (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
|
Servicing Rights, net | ||
Servicing Rights: | ||
Balance at beginning of period | $ 2,025,136 | $ 1,999,402 |
Total net gains (losses) included in earnings (realized and unrealized) | 3,461 | 411,768 |
Sales | (12,029) | (332,983) |
Settlements | 0 | 0 |
Transfers of IRLCs to closed loans | 0 | 0 |
Balance at end of period | 2,016,568 | 2,078,187 |
IRLCs, net | ||
Derivatives: | ||
Balance at beginning of period | 23,590 | 180,620 |
Total net gains or losses included in earnings (realized and unrealized) | 97,184 | 142,958 |
Sales | ||
Settlements | (43,664) | (232,922) |
Transfers of IRLCs to closed loans | (18,388) | (78,656) |
Balance at end of period | $ 58,722 | $ 12,000 |
FAIR VALUE - Gains and Losses in Earnings (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
|
Assets: | ||
Gain on origination and sale of loans, net | $ 59,295 | $ 269,760 |
Level 3 | Servicing Rights, net | ||
Assets: | ||
Gain on origination and sale of loans, net | 59,295 | 269,760 |
Change in fair value of servicing rights, net | (55,834) | 142,008 |
Total net gains (losses) included in: | 3,461 | 411,768 |
Change in unrealized gains (losses) relating to assets and liabilities still held at period end | (37,820) | 408,140 |
Level 3 | IRLCs, net | ||
Derivatives: | ||
Gain on origination and sale of loans, net | 35,132 | (168,620) |
Total net gains (losses) included in: | 35,132 | (168,620) |
Change in unrealized gains (losses) relating to assets and liabilities still held at period end | $ 58,722 | $ 12,000 |
LOANS HELD FOR SALE, AT FAIR VALUE - Summary of Changes in Balances (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
|
Loans Receivable Held-for-sale, Net, Reconciliation to Cash Flow [Roll Forward] | ||
Balance at beginning of period | $ 2,373,427 | $ 8,136,817 |
Origination and purchase of loans | 4,891,247 | 21,373,625 |
Sales | (5,382,419) | (22,805,365) |
Repurchases | 133,458 | 139,015 |
Principal payments | (15,097) | (60,287) |
Fair value gain (loss) | 38,751 | (225,137) |
Balance at end of period | $ 2,039,367 | $ 6,558,668 |
LOANS HELD FOR SALE, AT FAIR VALUE - Components of Gain on Origination and Sale of Loans (Details) - USD ($) $ in Thousands |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
Dec. 31, 2022 |
|
Receivables [Abstract] | |||
Discount on loan sales | $ (26,669) | $ (236,096) | |
Servicing rights additions | 59,295 | 269,760 | |
Unrealized gains from derivative assets and liabilities | 36,060 | 158,743 | |
Realized (losses) gains from derivative assets and liabilities | (47,057) | 349,040 | |
Discount points, rebates and lender paid costs | 57,446 | 60,067 | |
Fair value gain (loss) | 38,751 | (225,137) | |
Provision for loan loss obligation for loans sold | (9,674) | (13,246) | |
Total gain on origination and sale of loans, net | 108,152 | $ 363,131 | |
Loans held for sale on non-accrual status | $ 18,300 | $ 24,800 |
SERVICING RIGHTS, AT FAIR VALUE - Components of Service Portfolio (Details) - USD ($) $ in Thousands |
Mar. 31, 2023 |
Dec. 31, 2022 |
---|---|---|
Servicing Assets at Fair Value [Line Items] | ||
Total portfolio | $ 141,673,464 | $ 141,170,931 |
Conventional | ||
Servicing Assets at Fair Value [Line Items] | ||
Total portfolio | 104,029,019 | 104,074,252 |
Government | ||
Servicing Assets at Fair Value [Line Items] | ||
Total portfolio | $ 37,644,445 | $ 37,096,679 |
SERVICING RIGHTS, AT FAIR VALUE - Change in Servicing Rights (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
|
Servicing Asset at Fair Value, Amount [Roll Forward] | ||
Balance at beginning of period | $ 2,025,136 | $ 1,999,402 |
Additions | 59,295 | 269,760 |
Sales proceeds, net | (11,838) | (312,849) |
Due to changes in valuation inputs or assumptions | (21,368) | 198,996 |
Due to collection/realization of cash flows | (34,657) | (77,122) |
Balance at end of period | $ 2,016,568 | $ 2,078,187 |
SERVICING RIGHTS, AT FAIR VALUE - Component of Loan Servicing Fee Income (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
|
Transfers and Servicing [Abstract] | ||
Contractual servicing fees | $ 101,132 | $ 108,826 |
Late, ancillary and other fees | 17,829 | 2,233 |
Total | $ 118,961 | $ 111,059 |
SERVICING RIGHTS, AT FAIR VALUE - Changes in Fair Value (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
|
Transfers and Servicing [Abstract] | ||
Due to changes in valuation inputs or assumptions | $ (21,368) | $ 198,996 |
Due to collection/realization of cash flows | (34,657) | (77,122) |
Realized gains on sales of servicing rights, net of provision | 140 | 10,034 |
Net gain (loss) from derivatives hedging servicing rights | 3,079 | (200,291) |
Changes in fair value of servicing rights, net | $ (52,806) | $ (68,383) |
SERVICING RIGHTS, AT FAIR VALUE - Servicing Rights Sensitivity Analysis (Details) - USD ($) $ in Thousands |
Mar. 31, 2023 |
Dec. 31, 2022 |
---|---|---|
Transfers and Servicing [Abstract] | ||
Fair Value of Servicing Rights, net | $ 2,016,568 | $ 2,025,136 |
Discount rate, increase 1% | (80,524) | (81,431) |
Discount rate, increase 2% | (155,548) | (157,281) |
Cost of servicing. increase 10% | (19,333) | (19,017) |
Cost of servicing. increase 20% | (38,772) | (38,127) |
Prepayment speed, increase 10% | (23,181) | (18,863) |
Prepayment speed, increase 20% | $ (45,837) | $ (37,546) |
VARIABLE INTEREST ENTITIES - Nonconsolidated VIEs (Details) - USD ($) $ in Thousands |
Mar. 31, 2023 |
Dec. 31, 2022 |
---|---|---|
Variable Interest Entity [Line Items] | ||
Retained interests at carrying value | $ 95,561 | $ 94,243 |
Investments in joint ventures | 18,266 | 20,410 |
Total assets | 6,190,791 | 6,609,934 |
Variable Interest Entity, Not Primary Beneficiary | ||
Variable Interest Entity [Line Items] | ||
Total assets | 113,827 | 114,653 |
Maximum exposure to loss | 113,827 | 114,653 |
Variable Interest Entity, Not Primary Beneficiary | Joint Venture | ||
Variable Interest Entity [Line Items] | ||
Investments in joint ventures | 18,266 | 20,410 |
Maximum exposure to loss | 18,266 | 20,410 |
Total assets in VIEs | 18,622 | 38,682 |
Variable Interest Entity, Not Primary Beneficiary | Retained Interests | ||
Variable Interest Entity [Line Items] | ||
Retained interests at carrying value | 95,561 | 94,243 |
Maximum exposure to loss | 95,561 | 94,243 |
Total assets in VIEs | $ 2,285,471 | $ 2,309,739 |
VARIABLE INTEREST ENTITIES - Additional Information (Details) - USD ($) $ in Thousands |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
Dec. 31, 2022 |
|
Variable Interest Entity [Line Items] | |||
Total portfolio | $ 141,673,464 | $ 141,170,931 | |
Variable Interest Entity, Not Primary Beneficiary | Joint Venture | |||
Variable Interest Entity [Line Items] | |||
Total assets in VIEs | 18,622 | 38,682 | |
Share in net earnings of joint ventures | 3,800 | $ 2,000 | |
Variable Interest Entity, Not Primary Beneficiary | Financial Asset, Equal to or Greater than 90 Days Past Due | |||
Variable Interest Entity [Line Items] | |||
Total portfolio | 10,600 | ||
Variable Interest Entity, Not Primary Beneficiary | Pledged as Collateral | |||
Variable Interest Entity [Line Items] | |||
Total assets in VIEs | $ 2,285,471 | $ 2,309,739 |
WAREHOUSE AND OTHER LINES OF CREDIT - Information on Warehouse Borrowings (Details) - USD ($) $ in Thousands |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
Dec. 31, 2022 |
|
Line of Credit Facility [Line Items] | |||
Loans held for sale, at fair value | $ 2,039,367 | $ 2,373,427 | |
Warehouse and Revolving Credit Facilities | |||
Line of Credit Facility [Line Items] | |||
Maximum outstanding balance during the period | 2,152,855 | $ 7,672,559 | |
Average balance outstanding during the period | $ 1,518,210 | $ 6,290,744 | |
Weighted average interest rate during the period | 6.62% | 2.01% | |
Warehouse and Revolving Credit Facilities | Pledged as Collateral | |||
Line of Credit Facility [Line Items] | |||
Loans held for sale, at fair value | $ 1,909,375 | $ 6,431,228 |
DEBT OBLIGATIONS - Information on Outstanding Debt (Details) - USD ($) $ in Thousands |
Mar. 31, 2023 |
Dec. 31, 2022 |
---|---|---|
Debt Instrument [Line Items] | ||
Debt obligations, net | $ 2,303,712 | $ 2,289,319 |
Secured debt obligations | ||
Debt Instrument [Line Items] | ||
Debt obligations, net | 1,311,157 | 1,297,497 |
Secured debt obligations | Term Notes | ||
Debt Instrument [Line Items] | ||
Debt obligations, net | 199,791 | 199,666 |
Secured debt obligations | MSR Facilities | ||
Debt Instrument [Line Items] | ||
Debt obligations, net | 974,410 | 963,834 |
Secured debt obligations | Securities financing facilities | ||
Debt Instrument [Line Items] | ||
Debt obligations, net | 86,640 | 85,513 |
Secured debt obligations | Servicing advance facilities | ||
Debt Instrument [Line Items] | ||
Debt obligations, net | 50,316 | 48,484 |
Secured debt obligations | Revolving credit facility | ||
Debt Instrument [Line Items] | ||
Debt obligations, net | 1,111,366 | 1,097,831 |
Unsecured debt obligations | Senior Notes | ||
Debt Instrument [Line Items] | ||
Debt obligations, net | $ 992,555 | $ 991,822 |
DEBT OBLIGATIONS - Term Notes (Details) - Secured credit facilities - Term Notes $ in Millions |
Mar. 31, 2023
USD ($)
|
---|---|
Debt Instrument [Line Items] | |
Term notes | $ 200.0 |
Deferred financing costs | $ 0.2 |
DEBT OBLIGATIONS - Interest Expense (Details) - Secured Overnight Financing Rate (SOFR) or Base Rate |
3 Months Ended |
---|---|
Mar. 31, 2023 | |
Minimum | |
Debt Instrument [Line Items] | |
Basis spread on variable rate (as a percent) | 0.80% |
Maximum | |
Debt Instrument [Line Items] | |
Basis spread on variable rate (as a percent) | 3.50% |
EQUITY - Additional Information (Details) $ in Thousands |
Feb. 12, 2021 |
Mar. 31, 2023
USD ($)
|
Dec. 31, 2022
USD ($)
|
---|---|---|---|
Equity [Abstract] | |||
Stock, exchange ratio | 1 | ||
Noncontrolling interest | $ 437,288 | $ 487,974 |
EQUITY - Summary of Ownership (Details) - LD Holdings - shares |
Mar. 31, 2023 |
Dec. 31, 2022 |
---|---|---|
Noncontrolling Interest [Line Items] | ||
Holdco units (in shares) | 317,110,866 | 315,216,801 |
Ownership Percentage | 100.00% | 100.00% |
loanDepot, Inc. | ||
Noncontrolling Interest [Line Items] | ||
Holdco units (in shares) | 172,127,841 | 169,523,682 |
Ownership Percentage | 54.28% | 53.78% |
Continuing LLC Members | ||
Noncontrolling Interest [Line Items] | ||
Holdco units (in shares) | 144,983,025 | 145,693,119 |
Ownership Percentage | 45.72% | 46.22% |
INCOME TAXES (Details) - USD ($) $ in Millions |
Mar. 31, 2023 |
Dec. 31, 2022 |
---|---|---|
Income Tax Disclosure [Abstract] | ||
Deferred tax asset before valuation allowance | $ 127.2 | $ 70.5 |
Deferred tax liability | $ 230.4 | 191.6 |
Combined federal and state rate, percent | 27.30% | |
Deferred tax asset, valuation allowance | $ (0.4) | |
TRA liability | $ 52.1 | $ 50.7 |
RELATED PARTY TRANSACTIONS - Additional Information (Details) - USD ($) |
3 Months Ended | |
---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
|
Related Party Transactions [Abstract] | ||
Tax receivable agreement, payment | $ 0 | $ 0 |
RELATED PARTY TRANSACTIONS - Schedule of Related Party Transactions (Details) - Joint Venture - USD ($) $ in Thousands |
3 Months Ended | ||
---|---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
Dec. 31, 2022 |
|
Related Party Transaction [Line Items] | |||
Loan processing and administrative services fee income | $ 4,177 | $ 3,330 | |
Loan origination broker fees expense | 26,786 | $ 20,129 | |
Amounts payable to joint ventures | $ (6,549) | $ (9,776) |
COMMITMENTS AND CONTINGENCIES - Additional Information (Details) - USD ($) $ in Thousands |
3 Months Ended | |||
---|---|---|---|---|
Mar. 31, 2023 |
Dec. 31, 2022 |
Mar. 31, 2022 |
Dec. 31, 2021 |
|
Other Commitments [Line Items] | ||||
Customer escrow balance | $ 3,600 | $ 5,100 | ||
Financing receivable, allowance for credit loss | 65,670 | 70,797 | $ 41,159 | $ 29,877 |
TRA liability | 52,100 | 50,700 | ||
MSR Facilities | ||||
Other Commitments [Line Items] | ||||
Financing receivable, allowance for credit loss | 800 | 1,100 | ||
Commitments to Extend Credit | ||||
Other Commitments [Line Items] | ||||
Commitments to originate loans | 3,200,000 | $ 2,200,000 | ||
Employment Litigation | ||||
Other Commitments [Line Items] | ||||
Loss contingency, damages sought | $ 75,000 |
COMMITMENTS AND CONTINGENCIES - Loan Loss Obligation (Details) - USD ($) $ in Thousands |
3 Months Ended | |
---|---|---|
Mar. 31, 2023 |
Mar. 31, 2022 |
|
Financing Receivable, Allowance for Credit Loss [Roll Forward] | ||
Balance at beginning of period | $ 70,797 | $ 29,877 |
Provision for loan loss obligations | 9,674 | 13,246 |
Charge-offs | (14,801) | (1,964) |
Balance at end of period | $ 65,670 | $ 41,159 |
REGULATORY CAPITAL AND LIQUIDITY REQUIREMENTS (Details) $ in Millions |
Mar. 31, 2023
USD ($)
|
---|---|
Mortgage Banking [Abstract] | |
Minimum adjusted net worth balance requirement | $ 132.0 |
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