Loandepot cut its quarterly loss to a fraction of what it was three months ago, as a pivot into home equity lending lifted margins and a rate-driven servicing gain helped the bottom line.

The Irvine, California-based lender and servicer posted a $6.6 million net loss for the second quarter, a sharp improvement on losses of $54.9 million in the previous quarter and $25.3 million a year ago. Production volume of $7.99 billion rose 4% sequentially and 19% annually, while unit volume jumped 25% from the first quarter. 

"In the second quarter, revenue increased, operating leverage improved, and our net loss narrowed substantially even as interest rates rose meaningfully beginning in March. The pace of improvement accelerated as the quarter progressed, with June demonstrating the strongest results so far this year," said Founder and CEO Anthony Hsieh. 

Pull-through weighted gain on sale margins rebounded 74 basis points to 345 basis points, from 271 in the first quarter and 330 a year ago. That was inside the range guided in May and its best margin since early 2025, which Loandepot credited to a mix shift toward home equity and government loans. Purchase business was 57% of originations, up from 41%.

Much of that improvement came from outside operations. Revenue rose 18% to $337.3 million, but adjusted revenue, which strips out servicing valuation swings, gained 3% to $307.6 million. A 36.7 million valuation gain on serving rights held the net change in MSR fair value to a $19.6 million decline from $64.4 million in the first quarter. Compared to a year ago, adjusted net loss widened to $29.2 million and adjusted EBITDA fell to $20.5 million from $25.6 million. 

Hsieh said the quarter's results were proof the strategy is working, citing the Figure-powered 5X5 HomeLoan product, its return to wholesale and roughly $35 trillion in U.S. homeowner equity as opportunities. 

"The momentum is finally here. We're feeling pretty good about it," Hsieh said. Purchase market share rose to 1.27% from 0.95%, and monthly losses, excluding fair value marks, fell from $15 million in April to $2 million in June. 

The servicing book grew to $123.4 billion in unpaid principal balance, up 5%. But the preliminary recapture rate slipped to 68% from 73%, which Hsieh connected to rising rates, though retention hit a five-quarter high at 77%. Loans 60-plus days delinquent rose 30.6% annually to $2.14 billion. 

The company roughly monetized $10 billion of servicing rights after quarter end, settling later this year, according to Chief Financial Officer David Hayes. It bought back $16 million of its own bonds for 90 cents on the dollar in the quarter, and $27 million more at 86 cents through July 30 after filing a $250 million shelf registration in May. 

"Addressing the company's bond maturities remains a high priority for the management team," Hayes said. 

Third quarter guidance calls for volume of $6.25 billion to $8.25 billion, margins of 360 to 390 basis points and lower expenses. 

Struggling to turn a profit

Loandepot has lost money every quarter since the third quarter of 2024, its only profitable period since early 2022, including $108 million across 2025.

Management is also under public challenge. In July, Randlan Capital, a self-described activist holding more than 250,000 shares, urged the board to explore a sale, and reconsider Hsieh's leadership, arguing the servicing servicing portfolio could fetch a premium from a strategic buyer, citing Rocket's acquisition of Mr. Cooper as evidence of appetite. Hsieh controls more than 100 million shares.

Loandepot's stock has traded near $1 for months, down more than 90% from its $14 February 2021 IPO price.