Loandepot saw its financial wherewithal bounce back into the black in the third quarter, after reporting losses since the beginning of the market downturn.
Loandepot posted a net income of $2.7 million, a notable improvement from a net loss of
The nonbank also revealed a shift away from its Vision 2025 cost-cutting strategy, which it dubbed its "battle plan," and unveiled Project North Star, an initiative designed to position Loandepot as "the leading lending partner of choice for homeowners."
"I'm pleased to announce the launch of Project North Star, our new strategy for the next three years," said CEO Frank Martell during the company's third quarter earnings call. "[It] builds on the foundation of Vision 2025 including our focus on durable revenue growth, positive operating leverage, best in class productivity and investments in platforms and solutions that support and ultimately transform our customers' homeownership journey."
The initiative includes plans to build out an artificial intelligence-powered customer engagement platform for homebuyers and expand the company's geographic footprint by way of joint ventures with builders and realtors. Most recently, the nonbank partnered
The top-20 ranked residential lender and servicer reported origination volume of $6.7 billion for the July-September period, up from $6 billion in the previous quarter. Its gain-on-sale margin was 329 basis points, compared to 306 basis points in the prior three months.
Purchase volume made up 66% of total originations for Loandepot, down from 72% the previous quarter due to
Meanwhile, Loandepot's unpaid principal balance on its servicing portfolio increased to $114.9 billion, up from $114.3 billion the previous quarter.
Higher volume and increased headcount costs drove expenses up 2% from a year earlier. Expenses totaled $311 million, up from $305 million in September 2023, but down from $342 million in the second quarter of 2024.
"Expenses fluctuate as origination fluctuates," said David Hayes, chief financial officer at Loandepot, during the company's earnings call. "We are investing in revenue generating initiatives, specifically staffing around our loan officers and our ops team members as well, so we're building capacity up as we expect the eventual recovery of the mortgage market."
The nonbank predicts that origination volume will be between $6 billion to $8 billion in the fourth quarter, with gain-on-sale ranging from 285 to 305 basis points.
The October-December period may be impacted by lower servicing revenue related to the company's second quarter MSR sales, the nonbank cautioned.
"We embark on Project North Star, confident in the talent and resilience of the 4,500 plus members of Loandepot, we believe our team, coupled with our unique multi-channel platform, provides the key ingredient needed to become the go to lending partner for increasingly diverse communities homeowners, including first time home buyers, and support those clients throughout the life cycle of their homeownership journey," Martell added.
