Latest figures indicate improvement
loanDepot has reported improved financial results for the first quarter of 2023.
The mortgage giant reduced its net loss to $91 million in Q1 from $157.8 million in the previous quarter. loanDepot attributed the drop in losses to the 23% annualized increase in revenue ($207.9 million) and a $29.3 million decrease in total expenses ($314.5 million).
"The first quarter of this year remained challenging for the housing market as virtually all participants grappled with the impacts of ongoing volatility in mortgage interest rates, persistent cost inflation and the lack of available homes for sale," said loanDepot president and CEO Frank Martell. "Against this backdrop loanDepot continued to execute against our Vision 2025 plan, narrowing our loss from the fourth quarter of 2022 on higher revenues and lower expenses."
Its loan origination volume during the period was $4.9 billion, down 23% or $1.4 billion from Q4 2022, according to the lender's financial report. Purchase volume fell to 71% of total loans, down from 76% in the prior quarter and up from 37% a year ago.
"Although the affordability and availability of new and existing home sales remain challenging for the industry overall, we expect to continue to benefit from seasonally higher revenues and our ongoing cost reduction program," Martell said. "Assuming the expected benefits of continuing seasonal volume increases and cost productivity, we expect to deliver improving financial results over the course of the second and third quarters of 2023."
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In the second quarter, loanDepot projects a lower origination volume of between $4.5 billion and $6.5 billion. Its anticipated pull-through weighted rate lock volume is at around $5.5 billion to $7.5 billion, and pull-through weighted gain on sale margin of between 240 basis points and 280 basis points.
"Importantly, while we continue to reset our cost structure to align with a smaller mortgage market, we are also focused on the other pillars of Vision 2025, including capturing profitable revenue growth opportunities," Martell added.
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