Rising loan volumes and disciplined spending lift company
loanDepot bounced back to profitability in the third quarter of 2024, reporting a net income of $2.7 million, a turnaround from a net loss of $34.3 million in the same quarter last year.
The lender credited the rebound to increased loan volumes, improved profit margins, and effective cost management.
Non-volume-related expenses were reduced by $11.4 million compared to Q3 2023, primarily through lower general and administrative costs. The company also reported an $18.9 million net benefit linked to expected insurance proceeds from a cybersecurity-related class-action settlement.
loanDepot’s adjusted net income for Q3 was $7.1 million, a considerable improvement from the adjusted net loss of $29.2 million in Q3 2023.
The company achieved $6.7 billion in loan origination volume, a 9% increase from the prior year. It also saw a 19% year-over-year boost in pull-through weighted lock volume, reaching $6.7 billion. Purchase loans made up 66% of total originations, while refinance activity gained traction, reflected in a recapture rate of 71%, up from 69% a year earlier.
loanDepot recently expanded its presence in the purchase mortgage market through a joint venture with Smith Douglas Homes, a homebuilder specializing in affordable housing. The new venture, Ridgeland Mortgage, will initially serve key markets across the Southeast and Texas, including Atlanta, Charlotte, Nashville, and Houston.
“The third quarter served as validation of our strategy as we saw a modest improvement in the mortgage market, coupled with the company’s positive operating leverage fueled our return to profitability,” loanDepot chief financial officer David Hayes said in a media release.
“As we look toward 2025, we anticipate continued market challenges, but we believe that the implementation of Project North Star will allow us to capture the benefit of higher market volumes while we continue to capitalize on our ongoing investments in operational efficiency to achieve sustainable profitability in a wide variety of operating environments.”
For Q4, loanDepot projected origination volume between $6 billion and $8 billion, with pull-through weighted rate lock volume ranging from $5.5 billion to $7.5 billion.
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“Through the successful implementation of our Vision 2025 strategic program, loanDepot returned to profitability in the third quarter on modest improvements in market volumes, which resulted in higher revenue,” said Frank Martell, president and CEO of loanDepot.
“We are also realizing the benefits of our ongoing cost management and productivity programs, which helped to fund strategic investments in our platforms, solutions and people. These investments should help position the company for success in 2025 and beyond.”
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