UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~March 31, 2021~~September 30, 2023


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _____to _____

Commission File Number: 001-40003

loanDepot, Inc.

(Exact Name of Registrant as Specified in Its Charter)

Delaware

85-3948939

(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification No.)

~~26642 Towne Centre~~6561 Irvine Center Drive,

~~Foothill Ranch,~~Irvine,

California

~~92610~~92618

(Address of principal executive offices)

(Zip Code)

Registrant’s telephone number, including area code: (888) 337-6888

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading

Symbol

Name of each exchange

on which registered

Class A Common Stock, $0.001 per value per share

LDI

The New York Stock Exchange

~~Securities registered pursuant to Section 12(g) of the Act: None~~

~~Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒~~

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☐☒ No ☒☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☐

Accelerated filer

☐

Non-accelerated filer

☒

Smaller reporting company

☐☒

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of ~~May 7, 2021, 6,643,187~~November 8, 2023, 81,557,677 shares of the registrant’s Class A common stock, par value $0.001 per share, were outstanding. ~~NaN~~No shares of registrant’s Class B common stock were outstanding, ~~181,515,475~~142,483,267 shares of registrant’s Class C common stock were outstanding and ~~119,694,200~~97,026,671 shares of registrant’s Class D common stock were outstanding.

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This report contains forward-looking statements that are based on our management’s beliefs and assumptions and on information currently available to our management. Forward-looking statements include information concerning our possible or assumed future results of operations, business strategies, including our Vision 2025 plan, technology developments, financing and investment plans, financial condition and liquidity, dividend policy, competitive position, industry and regulatory environment, potential growth opportunities and the effects of competition. Forward-looking statements include statements that are not historical facts and can be identified by terms such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “intend,” “may,” “plan,” “potential,” “predict,” “project,” ~~“seek,”~~"seek," “should,” “will,” “would” or similar expressions and the negatives of those terms.

Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Given these uncertainties, you should not place undue reliance on forward-looking statements. Also, forward-looking statements represent our management’s beliefs and assumptions only as of the date of this report. You should read this report with the understanding that our actual future results may be materially different from what we expect.

Important factors that could cause actual results to differ materially from our expectations are included in Part I, Item 2 “Management's Discussion and Analysis of Financial Condition and Results of Operations” ~~and Part II, Item 1A "Risk Factors"~~ in this report as well as Part I, Item 1A “Risk Factors” and Part II, Item 7 “Management's Discussion and Analysis of Financial Condition and Results of Operations” in our annual report on Form 10-K for the year ended December 31, ~~2020~~2022 filed with the Securities and Exchange Commission (“SEC”) on March 16, ~~2021.~~2023.

Except as required by law, we assume no obligation to update these forward-looking statements, or to update the reasons actual results could differ materially from those anticipated in these forward-looking statements, even if new information becomes available in the future.

loanDepot, Inc.

Table of Contents




PART 1. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets as of ~~March 31, 2021~~September 30, 2023 and December 31, ~~2020~~2022			1
Consolidated Statements of Operations for the three and nine months ended ~~March 31, 2021~~September 30, 2023 and ~~2020~~2022			2
Consolidated Statements of Equity for the three and nine months ended ~~March 31, 2021~~September 30, 2023 and ~~2020~~2022			3
Consolidated Statements of Cash Flows for the ~~three~~nine months ended ~~March 31, 2021~~September 30, 2023 and ~~2020~~2022			45
Notes to Consolidated Financial Statements			67
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			3933
Item 3. Quantitative and Qualitative Disclosures About Market Risk			5648
Item 4. Controls and Procedures
PART II. OTHER INFORMATION
Item 1. Legal Proceedings			5850
Item 1A. Risk Factors			5851
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			5851
Item 3. Defaults Upon Senior Securities			51
Item 4. Mine Safety Disclosures			51
Item 5. Other Information			51
Item 6. Exhibits			5952
Signatures			54

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

loanDepot, Inc.

CONSOLIDATED BALANCE SHEETS

(Dollars in thousands)

March 31,
2021 December 31,
2020
ASSETS (Unaudited)
Cash and cash equivalents $ 630,457 $ 284,224
Restricted cash 121,389 204,465
Accounts receivable, net 84,047 138,122
Loans held for sale, at fair value (includes $2,213,801 and $1,595,442 pledged to creditors in securitization trusts at March 31, 2021 and December 31, 2020, respectively) 8,787,756 6,955,424
Derivative assets, at fair value 760,519 647,939
Servicing rights, at fair value (includes $355,565 and $300,465 pledged to creditors in securitization trusts at March 31, 2021 and December 31, 2020, respectively) 1,772,099 1,127,866
Property and equipment, net 91,007 85,002
Operating lease right-of-use assets 63,207 66,433
Prepaid expenses and other assets 84,804 77,241
Loans eligible for repurchase 842,970 1,246,158
Investments in joint ventures 17,332 17,528
Goodwill and intangible assets, net 42,698 42,826
Total assets $ 13,298,285 $ 10,893,228
LIABILITIES AND EQUITY
Liabilities:
Warehouse and other lines of credit $ 8,309,450 $ 6,577,429
Accounts payable, accrued expenses and other liabilities 890,826 446,370
Derivative liabilities, at fair value 95,188 168,169
Liability for loans eligible for repurchase 842,970 1,246,158
Operating lease liability 80,804 86,023
Debt obligations, net 1,305,089 712,466
Total liabilities 11,524,327 9,236,615
Commitments and contingencies (Note 16) 0 0
Equity:
Class A common stock, $0.001 par value, 2,500,000,000 authorized, 6,643,187 issued and outstanding as of March 31, 2021 $ 7 $ —
Class B common stock, $0.001 par value, 2,500,000,000 authorized, NaN issued and outstanding as of March 31, 2021 0 —
Class C common stock, $0.001 par value, 2,500,000,000 authorized, 179,746,190 issued and outstanding as of March 31, 2021 180 —
Class D common stock, $0.001 par value, 2,500,000,000 authorized, 119,694,200 issued and outstanding as of March 31, 2021 119 —
Preferred stock, $0.001 par value, 50,000,000 authorized, NaN issued and outstanding as of March 31, 2021 0 —
Additional paid-in capital 561,494 0
Retained earnings 42,412 0
Noncontrolling interest 1,169,746 1,656,613
Total equity 1,773,958 1,656,613
Total liabilities and equity $ 13,298,285 $ 10,893,228


	September 30, 2023		December 31, 2022
ASSETS	(Unaudited)
Cash and cash equivalents	$	717,196	$	863,956
Restricted cash	114,765		116,545
Accounts receivable, net	53,845		145,279
Loans held for sale, at fair value (includes $492,374 and $497,574 pledged to creditors in securitization trusts at September 30, 2023 and December 31, 2022, respectively)	2,070,748		2,373,427
Derivative assets, at fair value	86,622		39,411
Servicing rights, at fair value (includes $621,435 and $544,729 pledged to creditors in securitization trusts at September 30, 2023 and December 31, 2022, respectively)	2,053,359		2,037,447
Trading securities, at fair value	89,334		94,243
Property and equipment, net	76,762		92,889
Operating lease right-of-use assets	32,558		35,668
Prepaid expenses and other assets	124,756		155,982
Loans eligible for repurchase	639,806		634,677
Investments in joint ventures	18,778		20,410



Total assets	$	6,078,529	$	6,609,934

LIABILITIES AND EQUITY

Warehouse and other lines of credit	$	1,897,859	$	2,146,602
Accounts payable, accrued expenses and other liabilities	462,521		488,696
Derivative liabilities, at fair value	49,742		67,492
Liability for loans eligible for repurchase	639,806		634,677
Operating lease liability	53,579		61,675
Debt obligations, net	2,206,087		2,289,319
Total liabilities	5,309,594		5,688,461
Commitments and contingencies (Note 14)


Class A common stock, $0.001 par value, 2,500,000,000 authorized, 82,753,278 and 74,277,152 issued at September 30, 2023 and December 31, 2022, respectively	$	83	$	74
Class B common stock, $0.001 par value, 2,500,000,000 authorized, none issued at September 30, 2023 and December 31, 2022, respectively	—		—
Class C common stock, $0.001 par value, 2,500,000,000 authorized, 143,747,549 and 145,693,119 issued at September 30, 2023 and December 31, 2022, respectively	144		146
Class D common stock, $0.001 par value, 2,500,000,000 authorized, 97,026,671 and 97,026,671 issued at September 30, 2023 and December 31, 2022, respectively	97		97
Preferred stock, $0.001 par value, 50,000,000 authorized, none issued at September 30, 2023 and December 31, 2022, respectively	—		—
Treasury stock at cost, 2,988,231 and 1,780,141 shares at September 30, 2023 and December 31, 2022, respectively	(15,594)		(13,282)
Additional paid-in capital	818,928		788,601
Retained deficit	(424,508)		(342,137)
Noncontrolling interest	389,785		487,974
Total equity	768,935		921,473
Total liabilities and equity	$	6,078,529	$	6,609,934

See accompanying notes to the unaudited consolidated financial statements.

loanDepot, Inc.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Dollars in ~~thousands)~~thousands except per share amounts)
(Unaudited)


							Three Months Ended September 30,				Nine Months Ended September 30,
							2023		2022		2023		2022

		Three Months Ended March 31,
		2021		2020
REVENUES:	REVENUES:					REVENUES:
Interest income	Interest income	$	54,730	$	35,165	Interest income	$	37,253	$	51,202	$	98,271	$	166,888
Interest expense	Interest expense	(53,497)		(32,805)		Interest expense	(34,642)		(41,408)		(91,612)		(121,220)
Net interest income	Net interest income	1,233		2,360		Net interest income	2,611		9,794		6,659		45,668

Gain on origination and sale of loans, net	Gain on origination and sale of loans, net	1,020,646		492,485		Gain on origination and sale of loans, net	148,849		156,300		411,336		665,993
Origination income, net	Origination income, net	101,599		38,613		Origination income, net	17,740		21,268		48,088		119,449
Servicing fee income	Servicing fee income	82,568		36,563		Servicing fee income	118,783		113,544		355,482		341,929
Change in fair value of servicing rights, net	Change in fair value of servicing rights, net	69,294		(100,287)		Change in fair value of servicing rights, net	(35,688)		(38,479)		(126,968)		(140,370)
Other income	Other income	40,668		16,387		Other income	13,366		11,765		50,798		53,472

Total net revenues	Total net revenues	1,316,008		486,121		Total net revenues	265,661		274,192		745,395		1,086,141

EXPENSES:	EXPENSES:					EXPENSES:
Personnel expense	Personnel expense	603,735		240,199		Personnel expense	141,432		218,819		440,258		861,382
Marketing and advertising expense	Marketing and advertising expense	109,626		57,312		Marketing and advertising expense	33,894		42,940		104,520		205,289
Direct origination expense	Direct origination expense	46,976		26,503		Direct origination expense	15,749		19,463		50,352		106,616
General and administrative expense	General and administrative expense	51,317		29,630		General and administrative expense	46,522		83,412		157,473		197,089
Occupancy expense	Occupancy expense	9,988		9,892		Occupancy expense	5,903		9,889		18,083		28,673
Depreciation and amortization	Depreciation and amortization	8,454		9,372		Depreciation and amortization	10,592		10,243		31,339		32,110
Subservicing expense		26,611		13,247
Servicing expense						Servicing expense	8,532		14,221		19,116		46,472
Other interest expense	Other interest expense	13,171		10,970		Other interest expense	42,504		36,138		128,619		83,671

Goodwill impairment						Goodwill impairment	—		—		—		40,736
Total expenses	Total expenses	869,878		397,125		Total expenses	305,128		435,125		949,760		1,602,038

Income before income taxes		446,130		88,996
Loss before income taxes						Loss before income taxes	(39,467)		(160,933)		(204,365)		(515,897)

Income taxes		18,277		0
Net income		427,853		88,996
Net income attributable to noncontrolling interests		382,978		88,996
Net income attributable to loanDepot, Inc.		$	44,875	$	0
Income tax benefit						Income tax benefit	(5,205)		(23,451)		(28,622)		(63,274)

Earnings per share:
Net loss						Net loss	(34,262)		(137,482)		(175,743)		(452,623)

Net loss attributable to noncontrolling interests						Net loss attributable to noncontrolling interests	(17,663)		(77,401)		(92,793)		(256,873)

Net loss attributable to loanDepot, Inc.						Net loss attributable to loanDepot, Inc.	$	(16,599)	$	(60,081)	$	(82,950)	$	(195,750)

Loss per share:						Loss per share:
Basic	Basic	$	0.36	N/A		Basic	$	(0.09)	$	(0.37)	$	(0.48)	$	(1.29)
Diluted	Diluted	$	0.36	N/A		Diluted	$	(0.09)	$	(0.37)	$	(0.48)	$	(1.29)

Weighted average shares outstanding:	Weighted average shares outstanding:					Weighted average shares outstanding:
Basic	Basic	125,772,797		N/A		Basic	175,962,804		162,464,369		173,568,986		151,803,928
Diluted	Diluted	125,772,797		N/A		Diluted	175,962,804		162,464,369		173,568,986		151,803,928

See accompanying notes to the unaudited consolidated financial statements.

loanDepot, Inc.

CONSOLIDATED STATEMENTS OF EQUITY

(Dollars in thousands)

(Unaudited)

Common shares issued Common shares $ Additional paid-in capital Retained Earnings Noncontrolling Interests Total Equity
Class A Class C Class D Class A Class C Class D
Balance at December 31, 2019 — — — $ — $ — $ — $ — $ — $ 375,885 $ 375,885
Repurchase — — — — — — — — (220) (220)
Equity-based compensation — — — — — — — — (65) (65)
Dividends — — — — — — — — (1,914) (1,914)
Net income — — — — — — — 88,996 88,996
Balance at March 31, 2020 — — — $ — $ — $ — $ — $ — $ 462,682 $ 462,682
Balance at December 31, 2020 0 0 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 1,656,613 $ 1,656,613
Distributions prior to the reorganization transaction — — — — — — — — (160,617) (160,617)
Equity compensation prior to the reorganization transaction — — — — — — — — 338 338
Net income prior to the reorganization transaction — — — — — — — — 294,598 294,598
Deferred taxes and other tax adjustments associated with the Reorganization and IPO — — — — — — (203,741) — — (203,741)
Effect of the reorganization transaction 2,215,687 181,789,329 121,368,600 2 182 121 740,629 0 (740,934) 0
Effect of the IPO 3,850,000 (2,394,000) (1,456,000) 4 (2) (2) — — — —
Effect of the Greenshoe 577,500 (359,100) (218,400) 1 (1) — — — — —
Vested Class C shares — 709,961 — — 1 — (1) —
Net income subsequent to the reorganization and IPO — — — — — — — 44,875 88,380 133,255
Stock based compensation subsequent to the reorganization transaction — — — — — — 24,607 — 34,872 59,479
Distributions for state taxes on behalf of shareholders, net — — — — — — — (2,463) (3,504) (5,967)
Balance at March 31, 2021 6,643,187 179,746,190 119,694,200 $ 7 $ 180 $ 119 $ 561,494 $ 42,412 $ 1,169,746 $ 1,773,958


	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 June 30, 2022	63,593,048	152,191,394	97,026,671	$	65	$	152		$	97	$	(13,087)		$	762,635	$	(205,235)	$	669,236	$	1,213,863



Deferred taxes and other tax adjustments related to conversions and exchanges	—	—	—	—		—			—		—			(2,092)		—		—		(2,092)



Net issuance of common stock under stock-based compensation plans	4,383,019	(3,060,856)	—	5		(3)			—		(138)			15,084		—		(15,085)		(137)
Dividends on unvested Class A RSUs	—	—	—	—		—			—		—			—		(70)		(85)		(155)
Forfeiture of accrued distributions on unvested Class C shares	—	—	—	—		—			—		—			—		139		194		333
Stock-based compensation	—	—	—	—		—			—		—			2,472				2,301		4,773
Distributions for taxes on behalf of shareholders, net	—	—	—	—		—			—		—			—		(320)		(286)		(606)
Net loss	—	—	—	—		—			—		—			—		(60,081)		(77,401)		(137,482)
Balance at September 30, 2022	67,976,067	149,130,538	97,026,671	$	70	$	149		$	97	$	(13,225)		$	778,099	$	(265,567)	$	578,874	$	1,078,497

Balance at June 30, 2023	77,987,390	144,026,439	97,026,671	$	81	$	144		$	97	$	(15,324)		$	812,614	$	(408,220)	$	407,952	$	797,344
Deferred taxes and other tax adjustments related to conversions and exchanges	—	—	—	—		—			—		—			643		—		—		643
Net issuance of common stock under stock-based compensation plans	1,777,657	(278,890)	—	2		—			—		(270)			3,502		—		(2,657)		577
Forfeiture of accrued dividend equivalents on unvested Class A RSUs	—	—	—	—		—			—		—			—		1		2		3
Forfeiture of accrued distributions on unvested Class C shares	—	—	—	—		—			—		—			—		202		281		483
Stock-based compensation	—	—	—	—		—			—		—			2,169		—		1,771		3,940
Refunds of tax distributions, net	—	—	—	—		—			—		—			—		108		99		207
Net loss	—	—	—	—		—			—		—			—		(16,599)		(17,663)		(34,262)
Balance at September 30, 2023	79,765,047	143,747,549	97,026,671	$	83	$	144		$	97	$	(15,594)		$	818,928	$	(424,508)	$	389,785	$	768,935

See accompanying notes to the unaudited consolidated financial statements.

loanDepot, Inc.

CONSOLIDATED STATEMENTS OF EQUITY

(Dollars in thousands)

(Unaudited)


	Common stock outstanding		Common stock $			Treasury Stock			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	36,466,936	172,729,168	100,822,084	$	38	$	173		$	101	$	(12,852)		$	565,073	$	(28,976)	$	1,105,803	$	1,629,360
Deferred taxes and other tax adjustments related to conversions and exchanges	—	—	—	—		—			—		—			(19,835)		—		—		(19,835)
Net issuance of common stock under stock-based compensation plans	31,509,131	(23,598,630)	(3,795,413)	32		(24)			(4)		(373)			227,013		—		(227,017)		(373)
Dividends to Class A and Class D shareholders ($0.08 per share)	—	—	—	—		—			—		—			—		(5,343)		(6,481)		(11,824)
Distributions to Class C shareholders	—	—	—	—		—			—		—			—		(6,199)		(7,471)		(13,670)
Stock-based compensation	—	—	—	—		—			—		—			5,848		—		5,946		11,794
Distributions for taxes on behalf of shareholders, net		—	—	—		—			—		—			—		(29,299)		(35,033)		(64,332)
Net loss	—		—	—		—			—		—			—		(195,750)		(256,873)		(452,623)
Balance at September 30, 2022	67,976,067	149,130,538	97,026,671	$	70	$	149		$	97	$	(13,225)		$	778,099	$	(265,567)	$	578,874	$	1,078,497

Balance at December 31, 2022	72,497,011	145,693,119	97,026,671	$	74	$	146		$	97	$	(13,282)		$	788,601	$	(342,137)	$	487,974	$	921,473
Deferred taxes and other tax adjustments related to conversions and exchanges	—	—	—	—		—			—		—			7,309		—		—		7,309
Net issuance of common stock under stock-based compensation plans	7,268,036	(1,945,570)	—	9		(2)			—		(2,312)			14,501		—		(13,160)		(964)
Forfeiture of accrued dividend equivalents on unvested Class A RSUs	—	—	—	—		—			—		—			—		130		164		294
Forfeiture of accrued distributions on unvested Class C shares	—	—	—	—		—			—		—			—		202		281		483
Stock-based compensation	—	—	—	—		—			—		—			8,517		—		7,102		15,619
Refund of tax distributions, net	—	—	—	—		—			—		—			—		247		217		464
Net loss	—	—	—	—		—			—		—			—		(82,950)		(92,793)		(175,743)
Balance at September 30, 2023	79,765,047	143,747,549	97,026,671	$	83	$	144		$	97	$	(15,594)		$	818,928	$	(424,508)	$	389,785	$	768,935

See accompanying notes to the unaudited consolidated financial statements.

loanDepot, Inc.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Dollars in thousands)

(Unaudited)


		Three Months Ended March 31,					Nine Months Ended September 30,
		2021		2020			2023		2022
CASH FLOWS FROM OPERATING ACTIVITIES	CASH FLOWS FROM OPERATING ACTIVITIES					CASH FLOWS FROM OPERATING ACTIVITIES
Net income		$	427,853	$	88,996
Adjustments to reconcile net income to net
cash used in operating activities:
Net loss						Net loss	$	(175,743)	$	(452,623)
Adjustments to reconcile net loss to net						Adjustments to reconcile net loss to net
cash provided by operating activities:						cash provided by operating activities:
Depreciation and amortization expense	Depreciation and amortization expense	8,454		9,372		Depreciation and amortization expense	31,339		32,110
Amortization of operating lease right-of-use asset	Amortization of operating lease right-of-use asset	5,895		6,174		Amortization of operating lease right-of-use asset	10,129		17,107
Amortization of debt issuance costs	Amortization of debt issuance costs	2,685		1,498		Amortization of debt issuance costs	5,054		12,842
Gain on origination and sale of loans	Gain on origination and sale of loans	(990,904)		(417,716)		Gain on origination and sale of loans	(344,334)		(946,506)
Loss on sale of servicing rights		39		63

Gain on sale of servicing rights						Gain on sale of servicing rights	(10,811)		(10,548)
Fair value change in trading securities						Fair value change in trading securities	765		20,196
Provision for loss obligation on sold loans and servicing rights	Provision for loss obligation on sold loans and servicing rights	857		6,494		Provision for loss obligation on sold loans and servicing rights	10,086		125,047
(Increase) decrease in net deferred tax liabilities		203,892		0
Decrease in provision for deferred income taxes						Decrease in provision for deferred income taxes	(28,619)		(62,733)
Fair value change in derivative assets	Fair value change in derivative assets	(92,879)		(199,327)		Fair value change in derivative assets	21,321		32,223
Fair value change in derivative liabilities	Fair value change in derivative liabilities	(72,980)		150,175		Fair value change in derivative liabilities	(17,750)		112,040
Premium (paid) received on derivatives		(19,700)		12,919
Premium paid on derivatives						Premium paid on derivatives	(68,532)		(154,205)

Fair value change in loans held for sale	Fair value change in loans held for sale	178,844		(54,519)		Fair value change in loans held for sale	(10,288)		255,716
Fair value change in servicing rights	Fair value change in servicing rights	(112,917)		119,355		Fair value change in servicing rights	41,356		(180,136)
Equity compensation		59,817		(65)
Change in fair value of contingent consideration		0		2,508
Stock-based compensation expense						Stock-based compensation expense	15,619		11,794

Originations of loans	Originations of loans	(41,401,575)		(15,106,459)		Originations of loans	(17,097,155)		(46,842,973)
Proceeds from sales of loans	Proceeds from sales of loans	40,380,774		15,611,107		Proceeds from sales of loans	17,777,518		52,732,911
Proceeds from principal payments	Proceeds from principal payments	23,300		3,000		Proceeds from principal payments	93,671		119,708
Payments to investors for loan repurchases	Payments to investors for loan repurchases	(556,870)		(8,692)		Payments to investors for loan repurchases	(369,565)		(578,010)

Gain on extinguishment of debt						Gain on extinguishment of debt	(1,690)		(10,528)
Goodwill impairment						Goodwill impairment	—		40,736
Disbursements from joint ventures	Disbursements from joint ventures	819		1,493		Disbursements from joint ventures	15,288		8,435
Changes in operating assets and liabilities:

Other changes in operating assets and liabilities	Other changes in operating assets and liabilities	76,795		(60,178)		Other changes in operating assets and liabilities	133,544		132,310
Net cash (used in) provided by operating activities		(1,877,801)		166,198
Net cash provided by operating activities						Net cash provided by operating activities	31,203		4,414,913

CASH FLOWS FROM INVESTING ACTIVITIES	CASH FLOWS FROM INVESTING ACTIVITIES					CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property and equipment	Purchase of property and equipment	(14,163)		(4,997)		Purchase of property and equipment	(16,317)		(37,613)
Proceeds from sale of servicing rights	Proceeds from sale of servicing rights	635		6,808		Proceeds from sale of servicing rights	171,167		689,937

Cash flows received on trading securities						Cash flows received on trading securities	4,144		5,894
Investments in joint ventures						Investments in joint ventures	—		(350)

Return of capital from joint ventures		189		150
Net cash flows (used in) provided by investing activities		(13,339)		1,961
Net cash flows provided by investing activities						Net cash flows provided by investing activities	158,994		657,868

See accompanying notes to the unaudited consolidated financial statements.

loanDepot, Inc.

CONSOLIDATED STATEMENTS OF CASH FLOWS - CONTINUED

(Dollars in thousands)

(Unaudited)


		Three Months Ended March 31,					Nine Months Ended September 30,
		2021		2020			2023		2022
CASH FLOWS FROM FINANCING ACTIVITIES	CASH FLOWS FROM FINANCING ACTIVITIES					CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from borrowings on warehouse lines of credit		$	45,606,028	$	15,542,362
Repayment of borrowings on warehouse lines of credit		(43,874,006)		(15,237,251)
Proceeds from borrowings on warehouse and other lines of credit						Proceeds from borrowings on warehouse and other lines of credit	$	15,727,217	$	52,089,587
Repayment of borrowings on warehouse and other lines of credit						Repayment of borrowings on warehouse and other lines of credit	(15,975,960)		(57,017,350)

Proceeds from debt obligations	Proceeds from debt obligations	776,743		64,450		Proceeds from debt obligations	210,755		2,106,024
Payments on debt obligations	Payments on debt obligations	(175,935)		0		Payments on debt obligations	(295,385)		(1,442,931)
Payments of debt issuance costs	Payments of debt issuance costs	(11,260)		(767)		Payments of debt issuance costs	(777)		(4,555)

Payments on capital lease obligation		(689)		(6,119)

Payments on repurchase of units		0		(220)

Dividend distributions		(166,584)		(1,914)
Net cash provided by financing activities		2,154,297		360,541

Treasury stock purchased to net settle and withhold taxes on vested shares						Treasury stock purchased to net settle and withhold taxes on vested shares	(2,312)		(373)
Dividends and shareholder distributions						Dividends and shareholder distributions	(2,275)		(118,905)
Net cash used in financing activities						Net cash used in financing activities	(338,737)		(4,388,503)

Net change in cash and cash equivalents and restricted cash	Net change in cash and cash equivalents and restricted cash	263,157		528,700		Net change in cash and cash equivalents and restricted cash	(148,540)		684,278

Cash and cash equivalents and restricted cash at beginning of the period	Cash and cash equivalents and restricted cash at beginning of the period	488,689		117,496		Cash and cash equivalents and restricted cash at beginning of the period	980,501		620,596

Cash and cash equivalents and restricted cash at end of the period		$	751,846	$	646,196
Cash and cash equivalents and restricted cash at end of the period						Cash and cash equivalents and restricted cash at end of the period	$	831,961	$	1,304,874

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
SUPPLEMENTAL DISCLOSURES:						SUPPLEMENTAL DISCLOSURES:
Cash paid (received) during the period for:	Cash paid (received) during the period for:					Cash paid (received) during the period for:
Interest	Interest	$	49,901	$	47,585	Interest	$	223,477	$	178,135
Income taxes	Income taxes	3		(3)		Income taxes	(3,862)		23,857

Supplemental disclosure of noncash investing and financing activities	Supplemental disclosure of noncash investing and financing activities					Supplemental disclosure of noncash investing and financing activities
Operating leases right-of-use assets obtained in exchange for lease liabilities	Operating leases right-of-use assets obtained in exchange for lease liabilities	$	2,669	$	2,247	Operating leases right-of-use assets obtained in exchange for lease liabilities	$	7,490	$	14,677
Purchase of equipment under capital leases		168		202
Trading securities retained in securitizations						Trading securities retained in securitizations	—		50,426

See accompanying notes to the unaudited consolidated financial statements.

loanDepot, Inc.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

($ are in thousands, unless otherwise indicated)

(Unaudited)

NOTE 1 – DESCRIPTION OF BUSINESS ~~PRESENTATION~~ 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 and nine months ended ~~March 31, 2021~~September 30, 2023 are not necessarily indicative of the results that may be expected for the year ending December 31, ~~2021.~~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, ~~2020~~2022 (“~~2020~~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 September 30, 2023, the consolidated subsidiaries of LD Holdings included loanDepot.com, LLC, (“LDLLC”), Artemis Management LLC (“ART”), LD Settlement Services, LLC (“LDSS”), ~~and~~ mello Holdings, LLC (“Mello”)~~. Unless otherwise noted or indicated by the context, the term the “Company” refers (1) prior to the consummation of the IPO~~, and Reorganization described below, to LD Holdings and its consolidated subsidiaries, and (2) after the IPO and reorganization described below, to loanDepot, Inc. and its consolidated subsidiaries, including LD Holdings.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.

~~Initial Public Offering~~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 ~~common stock began trading on The New York Stock Exchange on February 11, 2021 under~~consolidated financial statements are prepared in accordance with GAAP as codified in the ~~ticker symbol “LDI.” The IPO consisted~~FASB’s Accounting Standards Codification (“ASC” or the “Codification”). In the opinion of ~~3,850,000 shares~~management, the unaudited condensed consolidated financial statements reflect all adjustments of ~~Class A common stock, $0.001 par value per share, at an offering price~~a normal recurring nature that are necessary for a fair presentation of ~~$14.00 per share, pursuant to~~the results for the interim periods presented. Interim results are not necessarily indicative of results for a ~~Registration Statement on Form S-1.~~full year.

Prior to the IPO, the Company completed a reorganization by which it changed its equity structure to create a single class of LLC units in LD Holdings. Prior to that transaction, the capital structure consisted of different classes of membership interests held by certain members of LD Holdings (“Continuing LLC Members”). The LLC units were then exchanged on a 1-for-one basis for Holdco Units and Class C common stock. The Continuing LLC Members have the right to exchange 1 Holdco Unit and 1 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.

The reorganization is considered a transaction between entities under common control, therefore, the financial statements for the periods prior to the IPO and reorganization have been adjusted to combine the previously separate entities for presentation. Prior to the reorganization and IPO, the Company had not engaged in any business or other activities, except in connection with its formation.

~~As a result of the IPO and reorganization:~~

•loanDepot, Inc. is a holding company, ~~and~~ its sole material asset is anits equity interest in LD ~~Holdings.~~Holdings and as the sole managing member of LD Holdings, ~~continues to be~~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 ~~Mello. loanDepot, Inc. is the sole managing member of LD Holdings, and indirectly~~

~~operates and controls all of LD Holdings’ business and affairs and consolidates the financial results of LD Holdings and its subsidiaries.~~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 ~~the~~ noncontrolling interest to reflect the entitlement of ~~the~~ certain members that still hold Class A holdings units (“Holdco Units”) and Class C common stock, (“Continuing LLC ~~Members.~~

•~~The Company has entered into a tax receivable agreement (“TRA”~~Members”) with certain funds managed by Parthenon Capital Partners, (the “Parthenon Stockholders”), Parthenon affiliates owning Holdco Units, and certain Continuing LLC Members, whereby loanDepot, Inc. will be obligated to pay such parties or their permitted assignees, 85%as of the amount of cash tax savings, if any, in U.S. federal, state, and local taxes that loanDepot, Inc. realizes, or is deemed to realize as a result of future tax benefits from increases in tax basis. The TRA liability is accounted for as a contingent liability with amounts accrued when deemed probable and estimable.

~~Summary of Significant Accounting Policies~~

Our accounting policies are described below and in Note 1- Description of Business, Presentation and Summary of Significant Accounting Policies, of our audited consolidated financial statements included in our 2020 Form 10-K.

~~Consolidation and Basis of Presentation~~

The Company's consolidated financial statements are prepared in accordance with GAAP as codified in the Financial Accounting Standards Board's (“FASB”) Accounting Standards Codification (“ASC” or the “Codification”).

ASC 250 requires that a change in the reporting entity or the consummation of a transaction accounted for in a manner similar to a pooling of interests, i.e., a reorganization of entities under common control, be retrospectively applied to the financial statements of all prior periods when the financial statements are issued for a period that includes the date the change in reporting entity or the transaction occurred. The IPO and reorganization were considered transactions between entities under common control, therefore, the financial statements for the periods prior to the IPO and reorganization have been adjusted to combine the previously separate entities for presentation. The financial results of LD Holdings and its subsidiaries were therefore combined with loanDepot, Inc., and the consolidated net earnings or loss has been allocated to the noncontrolling interest to reflect the entitlement of the Continuing LLC Members.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 ~~VIEs’~~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.

~~Certain items~~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 prior periods were reclassified to conform to the current presentation. As of March 31, 2021, financing lease obligations are now included as part of accounts payable, accrued expenses and other liabilities.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, ~~assets acquired and liabilities assumed in business combinations, and~~ determining the loan loss obligation on sold ~~loans.~~loans and MSRs. Actual results could differ from those estimates.

~~Non-controlling interests~~

loanDepot, Inc. is a holding company and its sole material asset is an equity interest in LD Holdings. LD Holdings continues to be 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, and Mello. loanDepot, Inc. is the sole managing member of LD Holdings, and indirectly operates and controls all of LD Holdings’ business and affairs and consolidates the financial results of LD Holdings and its subsidiaries. The financial results of LD Holdings and its subsidiaries are consolidated with loanDepot, Inc., and the consolidated net earnings or loss will be allocated to the noncontrolling interest to reflect the entitlement of the Continuing LLC Members.

~~Income Taxes~~

The Company’s provision for income taxes is made for current and deferred income tax on pretax net income adjusted for permanent and temporary differences based on enacted tax laws and applicable statutory tax rates. The Company accounts for interest and penalties associated with income tax obligations as a component of income tax expense.

Income taxes are accounted for under the asset and liability method. Under this method, deferred tax assets and liabilities are recognized for future tax consequences attributable to differences between the consolidated financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates for the periods in which the differences are expected to reverse. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the change. Deferred tax assets are recorded in prepaid expenses and other assets on the consolidated balance sheets. Deferred tax liabilities are recorded in accounts payable, accrued expenses and other liabilities on the consolidated balance sheets.

Following the IPO and Reorganization, the Company’s purchase of Holdco Units and any future exchanges of Holdco Units for cash or Class A Common Stock are expected to result in increases to the Company’s allocable tax basis in its assets. These increases in tax basis are expected to increase (for tax purposes) depreciation and amortization deductions allocable to the Company, and therefore reduce the amount of tax that the Company would otherwise be required to pay in the future. As a result, the Company has entered into a TRA with Parthenon Stockholders and certain Continuing LLC Members, whereby loanDepot, Inc. will be obligated to pay such parties or their permitted assignees, 85% of the amount of cash tax savings, if any, in U.S. federal, state, and local taxes that loanDepot, Inc. realizes, or is deemed to realize as a result of future tax benefits from increases in tax basis. The TRA liability is accounted for as a contingent liability within accounts payable, accrued expenses and other liabilities on the consolidated balance sheets with amounts accrued when deemed probable and estimable.

The Company evaluates tax positions taken or expected to be taken in the course of preparing the Company’s tax returns to determine whether the tax positions are “more-likely-than-not” of being sustained by the applicable tax authority. Tax positions deemed to meet the more-likely than-not threshold of being sustained would be recorded as a tax benefit in the current period.

~~Stock-Based Compensation~~

Effective upon the completion of the IPO, the Company adopted the loanDepot, Inc. 2021 Omnibus Incentive Plan (the “2021 Plan”). The 2021 Plan allows for the grant of stock options, restricted stock, restricted stock units (“RSUs”), and stock appreciation rights. There are currently only RSUs granted under the 2021 Plan. The Company uses the grant-date fair value of equity awards to determine the compensation cost associated with each award. Compensation cost for service-based equity awards is recognized on a straight-line basis over the requisite service period, which is generally the vesting period. Compensation cost for awards with only service conditions that have graded vesting schedules is recognized on a straight-line basis over the requisite service period for the entire award such that compensation cost recognized at any date is at least equal to the portion of the grant-date value of the award that is vested at that date. Expense is reduced for actual forfeitures as they occur. The cost of stock-based compensation is recorded to personnel expense.

~~Earnings per share~~

Basic net income per common share is calculated using the two-class method. The two-class method is an earnings allocation formula that determines earnings per share for each share of common stock and participating security according to dividends declared (distributed earnings) and participation rights in undistributed earnings. Distributed and undistributed earnings are allocated between common and participating security shareholders based on their respective rights to receive dividends. According to the Company’s certificate of incorporation, the holders of Class A common stock and Class D common stock are entitled to share equally, on a per share basis, in dividends and other distributions of cash, property or shares of stock of the Company as may be declared by the board of directors.

Diluted net income per common share is calculated using the more dilutive of either the treasury stock method or the two-class method. The dilutive calculation considers common stock issuable under the assumed conversion of Class C common stock to Class A common stock as well as restricted stock units granted under the Corporation’s stock plans using the treasury stock method, if dilutive.

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 ~~36%~~17% of total loan originations for the ~~three~~nine months ended ~~March 31, 2021.~~September 30, 2023.

The Company sells mortgage loans to various third-party investors. ~~Three~~Four investors accounted for ~~47%~~36%, ~~33%~~28%, 12%, and ~~13%~~5% of the Company’s loan sales for the ~~three~~nine months ended ~~March 31, 2021.~~September 30, 2023. No other investors accounted for more than 5% of the loan sales for the ~~three~~nine months ended ~~March 31, 2021.~~September 30, 2023.

The Company funds loans through warehouse and other lines of credit. As of ~~March 31, 2021, 23%~~September 30, 2023, 22% and 9%12% of the Company's warehouse lines were payable to two separate lenders.

~~NOTE 2 – RECENT ACCOUNTING PRONOUNCEMENTS~~

~~In September 2018, the FASB issued ASU 2018-15, “Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Customer's Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract.”~~ ASU 2018-15 was issued to align the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal use software license). The ASU was effective for public business entities for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. The adoption of this guidance on January 1, 2020 did not have a significant effect on the Company’s consolidated financial statements given that (1) the changes under the ASU generally align with our existing accounting treatment of implementation costs incurred in a hosting arrangement that is a service contract and (2) the Company has not incurred a material amount of implementation costs in a hosting arrangement.

~~In December 2019, FASB issued ASU 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes.”~~ The amendments in ASU 2019-12 simplify the accounting for income taxes by removing certain exceptions to the general principles in ASC Topic 740, Income Taxes related to the approach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period, and the recognition of deferred tax liabilities for outside basis differences. The new guidance also simplifies aspects of the accounting for franchise taxes and enacted changes in tax laws or rates and clarifies

the accounting for transactions that result in a step-up in the tax basis of goodwill. The guidance clarifies that single-member limited liability companies and similar disregarded entities that are not subject to income tax are not required to recognize an allocation of consolidated income tax expense in their separate financial statements, but they could elect to do so. This ASU was effective for public business entities for fiscal years and interim periods beginning after December 15, 2020. The adoption of this guidance on January 1, 2021 did not have a significant effect on the Company’s consolidated financial statements.

~~In March 2020, the FASB issued ASU 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting,”~~ which provided optional guidance for a limited period of time to ease the potential burden in accounting for (or recognizing the benefits of) reference rate reform on financial reporting. The amendments in ASU 2020-04 are elective and apply to all entities, subject to meeting certain criteria, that have contract, hedging relationships, and other transactions that reference London Interbank Offered Rate (“LIBOR”) or another reference rate expected to be discontinued because of reference rate reform. In January 2021, the FASB issued ASU 2021-01 to clarify that certain optional expedients and exceptions in Topic 848 for contract modifications and hedge accounting apply to derivatives that are affected by the discounting transition. This guidance is effective upon issuance and allows application to contract changes as early as January 1, 2020. The Company is in the process of reviewing its warehouse and other lines of credit and debt obligations that use LIBOR as the reference rate and is currently evaluating the potential impact that the adoption of this ASU will have on the consolidated financial statements.

NOTE 32 – 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 ~~2020~~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.

March 31, 2021
Carrying Amount Estimated Fair Value
Level 1 Level 2 Level 3
Assets
Cash and cash equivalents $ 630,457 $ 630,457 $ 0 $ 0
Restricted cash 121,389 121,389 0 0
Loans held for sale, at fair value 8,787,756 0 8,787,756 0
Derivative assets, at fair value 760,519 0 448,722 311,797
Servicing rights, at fair value 1,772,099 0 0 1,772,099
Loans eligible for repurchase 842,970 0 842,970 0
Liabilities
Warehouse and other lines of credit $ 8,309,450 $ 0 $ 8,309,450 $ 0
Derivative liabilities, at fair value 95,188 30,167 2 65,019
Servicing rights, at fair value(1)
6,011 0 0 6,011
Debt obligations:
2020-VF1 Notes 8,720 0 9,401 0
GMSR VFN 15,000 0 15,000 0
Term notes 198,791 0 200,000 0
Senior notes 1,082,578 0 1,134,340 0
Liability for loans eligible for repurchase 842,970 0 842,970 0

~~(1)Included in accounts payable and accrued expenses on the consolidated balance sheet.~~


	September 30, 2023
	Carrying Amount		Estimated Fair Value
			Level 1		Level 2		Level 3

Assets
Cash and cash equivalents	$	717,196	$	717,196	$	—	$	—
Restricted cash	114,765		114,765		—		—
Loans held for sale, at fair value	2,070,748		—		2,070,748		—
Derivative assets, at fair value	86,622		—		51,686		34,936
Servicing rights, at fair value	2,053,359		—		—		2,053,359
Trading securities, at fair value	89,334		—		89,334		—
Loans eligible for repurchase	639,806		—		639,806		—

Liabilities
Warehouse and other lines of credit	$	1,897,859	$	—	$	1,897,859	$	—
Derivative liabilities, at fair value	49,742		34,445		4,388		10,909
Servicing rights, at fair value	14,705		—		—		14,705
Debt obligations:
Secured credit facilities	1,017,391		—		1,017,833		—

Term Notes	200,000		—		200,000		—


Senior Notes	988,696		—		728,555		—
Liability for loans eligible for repurchase	639,806		—		639,806		—

119

December 31, 2020
Carrying Amount Estimated Fair Value
Level 1 Level 2 Level 3
Assets
Cash and cash equivalents $ 284,224 $ 284,224 $ 0 $ 0
Restricted cash 204,465 204,465 0 0
Loans held for sale, at fair value 6,955,424 0 6,955,424 0
Derivative assets, at fair value 647,939 483 107 647,349
Servicing rights, at fair value 1,127,866 0 0 1,127,866
Loans eligible for repurchase 1,246,158 0 1,246,158 0
Liabilities
Warehouse and other lines of credit $ 6,577,429 $ 0 $ 6,577,429 $ 0
Derivative liabilities, at fair value 168,169 4,299 163,566 304
Servicing rights, at fair value (1)
3,564 0 0 3,564
Debt obligations:
2020-VF1 Notes 7,571 0 8,593 0
GMSR VFN 15,000 0 15,000 0
Term notes 198,640 0 200,000 0
Senior notes 491,255 0 518,245 0
Liability for loans eligible for repurchase 1,246,158 0 1,246,158 0

~~(1)Included in accounts payable and accrued expenses on the consolidated balance sheet.~~


	December 31, 2022
	Carrying Amount		Estimated Fair Value
			Level 1		Level 2		Level 3

Assets
Cash and cash equivalents	$	863,956	$	863,956	$	—	$	—
Restricted cash	116,545		116,545		—		—
Loans held for sale, at fair value	2,373,427		—		2,373,427		—
Derivative assets, at fair value	39,411		—		10,037		29,374
Servicing rights, at fair value	2,037,447		—		—		2,037,447
Trading securities, at fair value	94,243		—		94,243		—
Loans eligible for repurchase	634,677		—		634,677		—

Liabilities
Warehouse and other lines of credit	$	2,146,602	$	—	$	2,146,602	$	—
Derivative liabilities, at fair value	67,492		18,226		43,482		5,784
Servicing rights, at fair value	12,311		—		—		12,311
Debt obligations:
Secured credit facilities	1,097,831		—		1,098,853		—
Term Notes	199,666		—		200,000		—


Senior Notes	991,822		—		645,495		—
Liability for loans eligible for repurchase	634,677		—		634,677		—

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.

1210


		March 31, 2021
		Recurring Fair Value Measurements of Assets (Liabilities) Using:									September 30, 2023
		Quoted Market Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total Fair Value Measurements			Level 1		Level 2		Level 3		Total
Fair value through net income:	Fair value through net income:									Fair value through net income:
Assets:	Assets:									Assets:
Loans held for sale	Loans held for sale	$	0	$	8,787,756	$	0	$	8,787,756	Loans held for sale	$	—	$	2,070,748	$	—	$	2,070,748
Trading securities										Trading securities	—		89,334		—		89,334
Derivative assets:	Derivative assets:									Derivative assets:
Interest rate lock commitments	Interest rate lock commitments	0		0		311,797		311,797		Interest rate lock commitments	—		—		34,936		34,936
Forward sales contracts		0		442,317		0		442,317
Forward sale contracts										Forward sale contracts	—		51,686		—		51,686

MBS put options		0		6,405		0		6,405

Servicing rights	Servicing rights	0		0		1,772,099		1,772,099		Servicing rights	—		—		2,053,359		2,053,359
Total assets at fair value	Total assets at fair value	$	0	$	9,236,478	$	2,083,896	$	11,320,374	Total assets at fair value	$	—	$	2,211,768	$	2,088,295	$	4,300,063
Liabilities:	Liabilities:									Liabilities:
Derivative liabilities:	Derivative liabilities:									Derivative liabilities:
Interest rate lock commitments	Interest rate lock commitments	$	0	$	0	$	65,019	$	65,019	Interest rate lock commitments	$	—	$	—	$	10,909	$	10,909
Interest rate swap futures	Interest rate swap futures	10,833		0		0		10,833		Interest rate swap futures	20,725		—		—		20,725
Forward sales contracts		0		2		0		2
Forward sale contracts										Forward sale contracts	—		4,388		—		4,388
Put options on treasuries	Put options on treasuries	19,334		0		0		19,334		Put options on treasuries	13,720		—		—		13,720
Servicing rights(1)		0		0		6,011		6,011

Servicing rights										Servicing rights	—		—		14,705		14,705
Total liabilities at fair value	Total liabilities at fair value	$	30,167	$	2	$	71,030	$	101,199	Total liabilities at fair value	$	34,445	$	4,388	$	25,614	$	64,447

~~(1)~~


	December 31, 2022
	Level 1		Level 2		Level 3		Total
Fair value through net income:
Assets:
Loans held for sale	$	—	$	2,373,427	$	—	$	2,373,427
Trading securities	—		94,243		—		94,243
Derivative assets:
Interest rate lock commitments	—		—		29,374		29,374
Forward sale contracts	—		6,676		—		6,676


MBS put options	—		3,361		—		3,361
Servicing rights	—		—		2,037,447		2,037,447
Total assets at fair value	$	—	$	2,477,707	$	2,066,821	$	4,544,528
Liabilities:
Derivative liabilities:
Interest rate lock commitments	$	—	$	—	$	5,784	$	5,784
Forward sale contracts	—		43,482		—		43,482
Put options on treasuries	10,831		—		—		10,831
Interest rate swap futures	7,395		—		—		7,395

Servicing rights	—		—		12,311		12,311

Total liabilities at fair value	$	18,226	$	43,482	$	18,095	$	79,803

~~Included in accounts payable and accrued expenses on the consolidated balance sheet.~~

1311

December 31, 2020
Recurring Fair Value Measurements of Assets (Liabilities) Using:
Quoted Market Prices in Active Markets for Identical Assets
(Level 1) Significant Other Observable Inputs
(Level 2) Significant Unobservable Inputs
(Level 3) Total Fair Value Measurements
Fair value through net income:
Assets:
Loans held for sale $ 0 $ 6,955,424 $ 0 $ 6,955,424
Derivative assets:
Interest rate lock commitments 0 0 647,349 647,349
Forward sales contracts 0 107 0 107
Interest rate swap futures 483 0 0 483
Servicing rights 0 0 1,127,866 1,127,866
Total assets at fair value $ 483 $ 6,955,531 $ 1,775,215 $ 8,731,229
Liabilities:
Derivative liabilities:
Interest rate lock commitments $ 0 $ 0 $ 304 $ 304
Put options on treasuries 4,299 0 0 4,299
Forward sales contracts 0 163,566 0 163,566
Servicing rights (1)
0 0 3,564 3,564
Total liabilities at fair value $ 4,299 $ 163,566 $ 3,868 $ 171,733

~~(1)Included in accounts payable and accrued expenses on the consolidated balance sheet.~~

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):

Three Months Ended March 31, 2021
Interest Rate Lock Commitments(1)
Servicing
Rights, net(2)
Balance at beginning of period $ 647,045 $ 1,124,302
Total net gains or losses included in
earnings (realized and unrealized) 388,548 642,421
Sales and settlements
Purchases 0 0
Sales 0 (635)
Settlements (593,703) 0
Transfers of IRLCs to closed loans (195,112) 0
Balance at end of period $ 246,778 $ 1,766,088


	Three Months Ended September 30, 2023				Nine Months Ended September 30, 2023
	IRLCs, net		Servicing Rights, net		IRLCs, net		Servicing Rights, net
Balance at beginning of period	$	49,048	$	1,998,762	$	23,590	$	2,025,136
Total net gains (losses) included in:
Gain on origination and sale of loans, net:
Issuances and additions	76,759		80,068		276,067		215,229
Transfers of IRLC to LHFS	(79,538)		—		(208,381)		—
Other factors	(22,242)		—		(67,249)		—
Change in fair value of servicing rights, net(1)	—		33,796		—		(30,544)
Sales	—		(73,972)		—		(171,167)
Balance at end of period	$	24,027	$	2,038,654	$	24,027	$	2,038,654

(1) ~~Interest rate lock commitments include both assets~~The change in unrealized gains or losses relating to servicing rights still held at September 30, 2023 amounted to a net loss of $3.0 million and ~~liabilities~~a net gain of $14.4 million for the three and ~~are shown net.~~

~~(2)~~ ~~Balance is net of $6.0 million servicing liability at March 31, 2021.~~nine months ended September 30, 2023, respectively.


	Three Months Ended September 30, 2022				Nine Months Ended September 30, 2022
	IRLCs, net		Servicing Rights, net		IRLCs, net		Servicing Rights, net
Balance at beginning of period	$	57,605	$	2,204,593	$	180,620	$	1,999,402
Total net gains (losses) included in:
Gain on origination and sale of loans, net:
Issuances and additions	22,112		124,244		279,266		574,459
Transfers of IRLC to LHFS	(102,686)		—		(374,144)		—
Other factors	(41,749)		—		(150,460)		—
Change in fair value of servicing rights, net(1)	—		16,354		—		190,684
Sales	—		(331,922)		—		(751,276)
Balance at end of period	$	(64,718)	$	2,013,269	$	(64,718)	$	2,013,269

(1)The change in unrealized gains or losses relating to servicing rights that were still held at September 30, 2022, amounted to net gains of $150.5 million and $683.4 million for the three and nine months ended September 30, 2022, respectively.

Three Months Ended March 31, 2020
Interest Rate Lock Commitments(1)
Servicing
Rights, net(2)
Contingent Consideration
Balance at beginning of period $ 128,208 $ 444,443 $ (2,374)
Total net gains or losses included in
earnings (realized and unrealized) 555,067 (5,300) (2,507)
Sales and settlements
Purchases 0 0 0
Sales 0 (7,279) 0
Settlements (259,455) 0 0
Transfers of IRLCs to closed loans (109,083) 0 0
Balance at end of period $ 314,737 $ 431,864 $ (4,881)

~~(1)Interest rate lock commitments include both assets and liabilities and are shown net.~~

~~(2)Balance is net of $2.8 million servicing rights liability at March 31, 2020.~~

The following presents the gains and losses included in earnings for the three months ended March 31, 2021 and 2020 relating to the Company’s assets and liabilities that are measured at fair value on a recurring basis using significant unobservable inputs (Level 3):

Three Months Ended March 31, 2021
Interest Rate Lock Commitments(1)
Servicing
Rights, net(2)
Total net (losses) gains included in earnings $ (400,267) $ 642,421
Change in unrealized gains relating to assets and liabilities still held at period end $ 246,778 $ 741,791

~~(1)(Losses) gains included in gain on origination and sale of loans, net.~~

~~(2)~~Includes $529.5 million in gains included in gain on origination and sale of loans, net and $112.9 million of gains included in change in fair value of servicing rights, net, for the three months ended March 31, 2021.

Three Months Ended March 31, 2020
Interest Rate Lock Commitments(1)
Servicing
Rights, net(2)
Contingent Consideration(3)
Total net gains (losses) included in earnings $ 186,529 $ (5,300) $ (2,507)
Change in unrealized gains relating to assets and liabilities still held at period end $ 314,737 $ 19,802 $ (2,507)

~~(1)Gains (losses) included in gain on origination and sale of loans, net.~~

~~(2)~~Includes $114.1 million in gains included in gain on origination and sale of loans, net and $119.4 million in losses included in change in fair value of servicing rights, net, for the three months ended March 31, 2020.

~~(3)Gains (losses) included in general and administrative expense.~~

1512

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:


		March 31, 2021				December 31, 2020					September 30, 2023				December 31, 2022
Unobservable Input	Unobservable Input	Range of inputs			Weighted Average	Range of inputs			Weighted Average	Unobservable Input	Range of inputs			Weighted Average(1)	Range of inputs			Weighted Average(1)
IRLCs:
IRLCs										IRLCs
Pull-through rate	Pull-through rate	5.3%	-	99.9%	81.0%	2.8%	-	99.9%	70.5%	Pull-through rate	2.2%	-	99.9%	80.3%	8.4%	-	99.9%	75.3%

Servicing rights	Servicing rights									Servicing rights
Discount rate~~(1)~~(2)	Discount rate~~(1)~~(2)	5.4%	-	9.4%	6.3%	5.0%	-	10.0%	6.2%	Discount rate~~(1)~~(2)	4.7%	-	16.6%	6.4%	5.0%	-	16.1%	6.5%
Prepayment rate~~(1)~~(2)	Prepayment rate~~(1)~~(2)	8.2%	-	27.8%	9.0%	13.4%	-	34.8%	14.0%	Prepayment rate~~(1)~~(2)	5.3%	-	18.2%	6.8%	5.8%	-	17.6%	7.2%
Cost to service (per loan)	Cost to service (per loan)	$70	-	$142	$85	$71	-	$139	$89	Cost to service (per loan)	$72	-	$133	$89	$63	-	$138	$87

(1)Weighted average inputs are based on the committed amounts for IRLCs and the UPB of the underlying loans for servicing rights.

(2)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.

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, 2021~~September 30, 2023 or December 31, ~~2020.~~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,~~Term Notes, and ~~senior notes.~~Senior Notes. The Company’s secured credit facilities and ~~term notes~~Term Notes accrue interest at a stated base rate, ~~of 30-day LIBOR~~ 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, 2021~~September 30, 2023 and December 31, ~~2020.~~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, 2021.~~September 30, 2023. The ~~Senior Notes~~debt obligations are classified as Level 2 in the fair value hierarchy.

~~NOTE 4 – BALANCE SHEET NETTING~~

Certain derivatives, loan warehouse and repurchase agreements are subject to master netting arrangements or similar agreements. In certain circumstances the Company may elect to present certain financial assets, liabilities, and related collateral subject to master netting arrangements in a net position on the consolidated balance sheets. The Company has elected to present net derivative assets and liabilities obtained from (or posted to) its counterparties when subject to a master netting arrangement that is legally enforceable on all counterparties in the event of default.13

NOTE 3 – LOANS HELD FOR SALE, AT FAIR VALUE

The following table ~~below~~ represents ~~financial assets and liabilities that are subject to master netting arrangements or similar agreements categorized~~the unpaid principal balance of LHFS by financial instrument, together with corresponding financial instruments and corresponding collateral received or pledged. Warehouse lines and secured debt obligations were secured by sufficient collateral with fair value that exceeded the liability amount recorded on the consolidated balance sheetsproduct type of loan as of ~~March 31, 2021~~September 30, 2023 and December 31, ~~2020, respectively.~~2022:



	September 30, 2023				December 31, 2022
	Amount		%		Amount		%
Conforming - fixed	$	1,140,772	54	%	$	1,441,497	59	%
Conforming - ARM	12,200		1		52,513		2
Government - fixed	881,382		41		815,921		34
Government - ARM	9,113		—		17,788		1
Other - residential mortgage loans	80,687		4		101,137		4
Consumer loans	1,723		—		1,774		—
Total	2,125,877		100	%	2,430,630		100	%
Fair value adjustment	(55,129)				(57,203)
Loans held for sale, at fair value	$	2,070,748			$	2,373,427

A summary of the changes in the balance of loans held for sale is as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Balance at beginning of period	$	2,256,551	$	4,656,338	$	2,373,427	$	8,136,817
Origination and purchase of loans	6,005,613		9,700,119		17,097,155		46,842,973
Sales	(6,219,208)		(11,728,053)		(17,648,412)		(52,409,647)
Repurchases	88,820		164,435		331,961		498,101
Principal payments	(46,886)		(18,822)		(93,671)		(119,708)
Fair value (loss) gain	(14,142)		(81,197)		10,288		(255,716)
Balance at end of period	$	2,070,748	$	2,692,820	$	2,070,748	$	2,692,820

1614

March 31, 2021
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 delivery contracts $ 556,621 $ (114,304) $ 442,317 $ 0 $ (334,977) $ 107,340
Put options on treasuries 0 0 0 0 0 0
MBS put options 6,405 0 6,405 0 0 6,405
Total Assets $ 563,026 $ (114,304) $ 448,722 $ 0 $ (334,977) $ 113,745
Liabilities:
Forward delivery contracts $ 114,306 $ (114,304) $ 2 $ 0 $ 0 $ 2
Put options on treasuries 19,334 0 19,334 0 0 19,334
Interest rate swap futures 10,833 0 10,833 0 0 10,833
Warehouse lines of credit 8,309,450 — 8,309,450 (8,309,450) 0 0
Secured debt obligations (1)
224,401 — 224,401 (224,401) 0 0
Total Liabilities $ 8,678,324 $ (114,304) $ 8,564,020 $ (8,533,851) $ 0 $ 30,169

~~(1)Secured debt obligations as~~Gain on origination and sale of ~~March 31, 2021 included~~loans, net is comprised of the ~~GMSR VFN, Term Notes, and 2020-VF1 Notes.~~following components:

December 31, 2020
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 delivery contracts $ 71,029 $ (70,922) $ 107 $ 0 $ 0 $ 107
Interest rate swap futures 483 0 483 0 0 483
Total Assets $ 71,512 $ (70,922) $ 590 $ 0 $ 0 $ 590
Liabilities:
Forward delivery contracts $ 234,488 $ (70,922) $ 163,566 $ 0 $ 0 $ 163,566
Put options on treasuries 4,299 0 4,299 0 0 4,299
Warehouse lines of credit 6,577,429 — 6,577,429 (6,577,429) 0 0
Secured debt obligations (1)
223,593 — 223,593 (223,593) 0 0
Total Liabilities $ 7,039,809 $ (70,922) $ 6,968,887 $ (6,801,022) $ 0 $ 167,865



	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Discount from loan sales	$	(64,973)	$	(83,312)	$	(108,289)	$	(756,602)
Servicing rights additions	80,068		124,244		215,229		574,459
Unrealized gains from derivative assets and liabilities	3,509		113,913		66,665		82,110
Realized gains from derivative assets and liabilities	58,417		37,950		15,063		940,824
Discount points, rebates and lender paid costs	83,772		57,634		222,332		189,468
Fair value (loss) gain	(14,142)		(81,197)		10,288		(255,716)
Recovery (provision) for loan loss obligation for loans sold	2,198		(12,932)		(9,952)		(108,550)
Total gain on origination and sale of loans, net	$	148,849	$	156,300	$	411,336	$	665,993

~~(1)Secured debt obligations as of~~ ~~December 31, 2020~~ ~~included the GMSR VFN, Term Notes, and 2020-VF1 Notes.~~

The Company ~~has entered into agreements with counterparties, which include netting arrangements whereby the counterparties are entitled to settle their positions~~had $24.9 million and $24.8 million of loans held for sale on ~~a net basis. In certain circumstances, the Company is required to provide certain counterparties financial instruments~~non-accrual status as of September 30, 2023 and cash collateral against derivative financial instruments, warehouse 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.December 31, 2022, respectively.

NOTE ~~5 – LOANS HELD FOR SALE, AT FAIR VALUE~~

~~The following table represents the unpaid principal balance of LHFS by product type as of March 31, 2021 and December 31, 2020:~~

March 31,
2021 December 31,
2020
Amount % Amount %
Conforming - fixed $ 7,029,584 81% $ 5,223,177 78%
Conforming - ARM 88,083 1 260 0
Government - fixed 967,163 11 1,108,936 16
Government - ARM 40,680 0 45,243 1
Other - residential mortgage loans 576,456 7 312,954 5
Consumer loans 2,322 0 2,541 0
8,704,288 100% 6,693,111 100%
Fair value adjustment 83,468 262,313
Total $ 8,787,756 $ 6,955,424

~~A summary of the changes in the balance of loans held for sale is as follows:~~

Three Months Ended
March 31,
2021 2020
Balance at beginning of period $ 6,955,424 $ 3,681,840
Origination and purchase of loans 41,401,575 15,106,459
Sales (39,919,413) (15,307,510)
Repurchases 552,314 10,021
Principal payments (23,300) (3,000)
Fair value (loss) gain (178,844) 54,519
Balance at end of period $ 8,787,756 $ 3,542,329

~~Gain on origination and sale of loans, net is comprised of the following components:~~

Three Months Ended
March 31,
2021 2020
Premium from loan sales $ 470,572 $ 376,829
Servicing rights 529,544 114,118
Unrealized gains from derivative assets and liabilities 209,386 29,981
Realized gains (losses) from derivative assets and liabilities 105,643 (54,361)
Discount points, rebates and lender paid costs (114,855) (18,871)
Mark to market (loss) gain on loans held for sale (178,844) 54,519
Provision for loan loss obligation for loans sold (800) (9,730)
Total gain on origination and sale of loans, net $ 1,020,646 $ 492,485

~~The Company had $37.8 million and $25.8 million of loans held for sale on non-accrual status as of March 31, 2021 and December 31, 2020, respectively.~~

~~NOTE 6~~4 – SERVICING RIGHTS, AT FAIR VALUE

The outstanding principal balance of the servicing portfolio was comprised of the following:

March 31,
2021 December 31,
2020
Conventional $ 99,987,686 $ 74,459,448
Government 29,722,206 28,471,810
Total servicing portfolio $ 129,709,892 $ 102,931,258

~~A summary of the unpaid principal balance underlying servicing rights is as follows:~~

March 31,
2021 December 31,
2020
Current loans $ 127,255,772 $ 100,358,713
Loans 30 - 89 days delinquent 570,091 709,946
Loans 90 or more days delinquent or in foreclosure 1,884,029 1,862,599
Total servicing portfolio (1)
$ 129,709,892 $ 102,931,258

~~(1)~~At March 31, 2021 and December 31, 2020, 1.4% and 2.4%, respectively, of the servicing portfolio was in forbearance as a result of payment relief efforts afforded to borrowers under the Coronavirus Aid, Relief, and Economic Security Act and other regulatory guidance.


	September 30, 2023		December 31, 2022
Conventional	$	104,281,437	$	104,074,252
Government	39,678,268		37,096,679
Total servicing portfolio	$	143,959,705	$	141,170,931

A summary of the changes in the balance of servicing rights, ~~is as follows:~~

Three Months Ended
March 31,
2021 2020
Balance at beginning of period $ 1,124,302 $ 444,443
Additions 529,543 114,118
Sales proceeds, net (674) (7,342)
Changes in fair value:
Due to changes in valuation inputs or assumptions 231,023 (86,314)
Other changes in fair value (1)
(118,106) (33,041)
Balance at end of period (2)
$ 1,766,088 $ 431,864

~~(1)Other changes in fair value include fall out and decay from loan payoffs and principal amortization.~~

~~(2)Balance is~~ net ~~of $6.0 million and $2.8 million~~ of servicing rights liability ~~at March 31, 2021 and 2020, respectively.~~is as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Balance at beginning of period	$	1,998,762	$	2,204,593	$	2,025,136	$	1,999,402
Additions	80,068		124,244		215,229		574,459
Sales proceeds	(73,972)		(331,922)		(171,167)		(751,276)
Changes in fair value:
Due to changes in valuation inputs or assumptions	68,651		75,366		73,422		373,158
Due to collection/realization of cash flows	(38,502)		(49,519)		(114,777)		(193,022)
Realized gains (losses) on sales of servicing rights	3,647		(9,493)		10,811		10,548
Balance at end of period	$	2,038,654	$	2,013,269	$	2,038,654	$	2,013,269

The following is a summary of the components of loan servicing fee income as reported in the Company’s consolidated statements of operations:

Three Months Ended
March 31,
2021 2020
Contractual servicing fees $ 79,571 $ 31,441
Late, ancillary and other fees 2,997 5,122
Total servicing fee income $ 82,568 $ 36,563


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Contractual servicing fees	$	92,744	$	104,917	$	289,184	$	327,567
Late, ancillary and other fees	26,039		8,627		66,298		14,362
Servicing fee income	$	118,783	$	113,544	$	355,482	$	341,929

The following is a summary of the components of ~~changes~~change in fair value of servicing rights, net as reported in the Company’s consolidated statements of operations:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Changes in fair value:
Due to changes in valuation inputs or assumptions	$	68,651	$	75,366	$	73,422	$	373,158
Due to collection/realization of cash flows	(38,502)		(49,519)		(114,777)		(193,022)
Realized gains (losses) on sales of servicing rights, net (1)	3,516		(13,489)		10,677		(5,949)
Net loss from derivatives hedging servicing rights	(69,353)		(50,837)		(96,290)		(314,557)
Changes in fair value of servicing rights, net	$	(35,688)	$	(38,479)	$	(126,968)	$	(140,370)

Three Months Ended
March 31,
2021 2020
Changes in fair value:
Due to changes in valuation inputs or assumptions $ 231,023 $ (86,314)
Other changes in fair value (1)
(118,106) (33,041)
Realized gains (losses) on sales of servicing rights (97) (103)
Net gain from derivatives hedging servicing rights (43,526) 19,171
Changes in fair value of servicing rights, net $ 69,294 $ (100,287)

(1) ~~Other changes in fair value include fall out and decay from loan payoffs and principal amortization.~~

Includes the provision for sold MSRs.

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.


Servicing Rights Sensitivity Analysis		March 31, 2021		December 31, 2020
							September 30, 2023		December 31, 2022
Fair Value of Servicing Rights, net	Fair Value of Servicing Rights, net	$	1,766,088	$	1,124,302	Fair Value of Servicing Rights, net	$	2,038,654	$	2,025,136
Change in Fair Value from adverse changes:	Change in Fair Value from adverse changes:					Change in Fair Value from adverse changes:
Discount Rate:	Discount Rate:					Discount Rate:
Increase 100 basis points		(76,086)		(45,745)
Increase 200 basis points		(149,291)		(87,800)
Increase 1%						Increase 1%	(79,707)		(81,431)
Increase 2%						Increase 2%	(154,737)		(157,281)
Cost of Servicing:	Cost of Servicing:					Cost of Servicing:
Increase 10%	Increase 10%	(15,795)		(11,556)		Increase 10%	(19,681)		(19,017)
Increase 20%	Increase 20%	(31,817)		(23,112)		Increase 20%	(39,418)		(38,127)
Prepayment Speed:	Prepayment Speed:					Prepayment Speed:
Increase 10%	Increase 10%	(54,622)		(63,351)		Increase 10%	(13,297)		(18,863)
Increase 20%	Increase 20%	(108,383)		(122,294)		Increase 20%	(26,506)		(37,546)

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.

NOTE 5 – DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES

Derivative 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:


				Fair Value
	Notional		Balance Sheet Location	Asset		Liability
September 30, 2023:
Interest rate lock commitments	$	2,126,836	Derivative asset, at fair value	$	34,936
Interest rate lock commitments	890,285		Derivative liabilities, at fair value	—		10,909

Forward sale contracts	3,428,694		Derivative asset, at fair value	51,686		—
Forward sale contracts	190,694		Derivative liabilities, at fair value	—		4,388

Put options on treasuries	—		Derivative asset, at fair value	—		—
Put options on treasuries	4,700		Derivative liabilities, at fair value	—		13,720




Interest rate swap futures	—		Derivative asset, at fair value	—		—
Interest rate swap futures	638		Derivative liabilities, at fair value	—		20,725
			Total derivative financial instruments	$	86,622	$	49,742


				Fair Value
	Notional		Balance Sheet Location	Asset		Liability
December 31, 2022:
Interest rate lock commitments	$	1,591,807	Derivative asset, at fair value	$	29,374	$	—
Interest rate lock commitments	622,706		Derivative liabilities, at fair value	—		5,784

Forward sale contracts	309,809		Derivative asset, at fair value	6,676		—
Forward sale contracts	2,963,685		Derivative liabilities, at fair value	—		43,482

Put options on treasuries	—		Derivative asset, at fair value	—		—
Put options on treasuries	8,050		Derivative liabilities, at fair value	—		10,831

MBS put options	400,000		Derivative asset, at fair value	3,361		—
MBS put options	—		Derivative liabilities, at fair value	—		—

Interest rate swap futures	—		Derivative asset, at fair value	—		—
Interest rate swap futures	211		Derivative liabilities, at fair value	—		7,395
			Total derivative financial instruments	$	39,411	$	67,492

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:


		Three Months Ended September 30,				Nine Months Ended September 30,
Derivative instrument	Statements of Operations Location	2023		2022		2023		2022
Interest rate lock commitments, net	Gain on origination and sale of loans, net	$	(25,021)	$	(122,323)	$	437	$	(245,338)
Forward sale contracts	Gain on origination and sale of loans, net	89,539		259,360		90,585		1,221,817
Interest rate swap futures	Gain on origination and sale of loans, net	(4,689)		2,279		(11,748)		(82,251)
Put options	Gain on origination and sale of loans, net	2,097		12,547		2,454		128,706
Forward sale contracts	Change in fair value of servicing rights, net	(9,044)		(16,293)		(17,471)		(113,920)
Interest rate swap futures	Change in fair value of servicing rights, net	(49,808)		(31,598)		(58,581)		(197,177)
Put options	Change in fair value of servicing rights, net	(10,501)		(2,946)		(20,238)		(3,460)
Total realized and unrealized (losses) gains on derivative financial instruments		$	(7,427)	$	101,026	$	(14,562)	$	708,377

NOTE 76 – ~~DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGING ACTIVITIES~~BALANCE SHEET NETTING

~~Derivatives instruments utilized by~~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 ~~primarily include interest rate lock commitments, forward sales contracts, MBS put options, put options on treasuries, and interest rate swap futures. Derivative~~is required to provide certain counterparties 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~~cash collateral against derivative financial instruments, ~~for hedge accounting. All derivative~~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 ~~recognized~~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 ~~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~~as of ~~its risk management activities.~~September 30, 2023 and December 31, 2022, respectively. Refer to Note ~~1- Description~~8 – Warehouse and Other Lines of ~~Business, Presentation and Summary of Significant Accounting Policies and Note 3- Fair Value~~Credit for further details on ~~derivatives in the 2020 Form 10-K.~~cash collateral requirements.


	September 30, 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	$	69,474	$	(17,788)	$	51,686	$	—	$	(37,278)	$	14,408



Total Assets	$	69,474	$	(17,788)	$	51,686	$	—	$	(37,278)	$	14,408

Liabilities:
Forward sale contracts	$	22,176	$	(17,788)	$	4,388	$	—	$	—	$	4,388
Put options on treasuries	13,720		—		13,720		—		(13,720)		—

Interest rate swap futures	20,725		—		20,725		—		(20,725)		—
Warehouse and other lines of credit	1,897,859		—		1,897,859		(1,897,859)		—		—
Secured debt obligations (1)	1,217,833		—		1,217,833		(1,217,833)		—		—
Total liabilities	$	3,172,313	$	(17,788)	$	3,154,525	$	(3,115,692)	$	(34,445)	$	4,388

(1)

~~The following summarizes the Company’s outstanding derivative instruments:~~

Secured debt obligations as of September 30, 2023 included secured credit facilities and Term Notes.

2119

Fair Value
Notional Balance Sheet Location Asset Liability
March 31, 2021:
Interest rate lock commitments - assets $ 18,454,546 Derivative asset, at fair value $ 311,797 $ —
Interest rate lock commitments - liabilities 6,008,115 Derivative liabilities, at fair value — 65,019
Forward sales contracts - assets 62,786,233 Derivative asset, at fair value 442,317 —
Forward sales contracts - liabilities 1,507 Derivative liabilities, at fair value — 2
Put options on treasuries - assets 0 Derivative asset, at fair value 0 —
Put options on treasuries - liabilities 32,048 Derivative liabilities, at fair value — 19,334
MBS put options - assets 850,000 Derivative asset, at fair value 6,405 —
MBS put options - liabilities 0 Derivative liabilities, at fair value — 0
Interest rate swap futures - assets 0 Derivative asset, at fair value 0 —
Interest rate swap futures - liabilities 3,487 Derivative liabilities, at fair value — 10,833
Total derivative financial instruments $ 88,135,936 $ 760,519 $ 95,188

Fair Value
Notional Balance Sheet Location Asset Liability
December 31, 2020:
Interest rate lock commitments - assets $ 31,365,494 Derivative asset, at fair value $ 647,349 $ —
Interest rate lock commitments - liabilities 99,635 Derivative liabilities, at fair value — 304
Forward sales contracts - assets 44,694 Derivative asset, at fair value 107 —
Forward sales contracts - liabilities 54,397,834 Derivative liabilities, at fair value — 163,566
Put options on treasuries - assets 0 Derivative asset, at fair value 0 —
Put options on treasuries - liabilities 27,803 Derivative liabilities, at fair value — 4,299
Interest rate swap futures - assets 2,350 Derivative asset, at fair value 483 —
Interest rate swap futures - liabilities 0 Derivative liabilities, at fair value — 0
Total derivative financial instruments $ 85,937,810 $ 647,939 $ 168,169

The following summarizes the realized and unrealized net gains and (losses) on derivative financial instruments and the consolidated statements of operations line items where such gains and losses are included:

Three Months Ended
March 31,
Derivative instrument Statements of Operations Location 2021 2020
Interest rate lock commitments, net Gain on origination and sale of loans, net $ (400,267) $ 186,528
Forward sales contracts (1)
Gain on origination and sale of loans, net 711,416 (203,407)
Interest rate swap futures Gain on origination and sale of loans, net (29,991) (6,398)
Put options Gain on origination and sale of loans, net 33,870 (1,103)
Interest rate swap futures Change in fair value of servicing rights, net (41,016) 19,735
Put options Change in fair value of servicing rights, net (2,511) (564)
Total realized and unrealized gains (losses) on derivative financial instruments $ 271,501 $ (5,209)


	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	$	39,386	$	(32,710)	$	6,676	$	—	$	—	$	6,676

MBS put options	3,361		—		3,361		—		—		3,361

Total assets	$	42,747	$	(32,710)	$	10,037	$	—	$	—	$	10,037

Liabilities:
Forward sale contracts	$	76,192	$	(32,710)	$	43,482	$	—	$	(36,270)	$	7,212
Put options on treasuries	10,831		—		10,831		—		(10,831)		—
Interest rate swap futures	7,395		—		7,395		—		(7,395)		—
Warehouse and other lines of credit	2,146,602		—		2,146,602		(2,146,602)		—		—
Secured debt obligations (1)	1,298,853		—		1,298,853		(1,298,853)		—		—
Total liabilities	$	3,539,873	$	(32,710)	$	3,507,163	$	(3,445,455)	$	(54,496)	$	7,212

(1)~~Amounts include pair-off settlements.~~

Secured debt obligations as of December 31, 2022 included secured credit facilities and Term Notes.

NOTE 87 – VARIABLE INTEREST ENTITIES

The determination of whether the assets and liabilities of the VIEs are consolidated ~~in the consolidated balance sheets~~ or not consolidated in the consolidated balance sheets depends on the terms of the related transaction and the Company’s continuing involvement, ~~(if any)~~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 nine months ended September 30, 2023 and year ended December 31, 2022.

The ~~following table presents~~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 ~~involvement in consolidated~~securitization and ~~nonconsolidated VIEs in which the Company holds variable interests.~~other financing transactions are often considered VIEs.

March 31, 2021
Net carrying amount of total assets Carrying amount of total liabilities Maximum
exposure to loss in non-consolidated VIEs
Consolidated variable interest entities
Mortgage loans & restricted cash $ 2,214,663 $ 2,200,000 N/A
GNMA mortgage servicing rights 355,565 213,791 N/A
$ 2,570,228 $ 2,413,791
Non-consolidated variable interest entities
Joint Ventures $ 10,414 $ 7,439 $ 17,332
The Company sells 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.

2320

December 31, 2020
Net carrying amount of total assets Carrying amount of total liabilities Maximum
exposure to loss in non-consolidated VIEs
Consolidated variable interest entities
Mortgage loans & restricted cash $ 1,765,855 $ 1,699,803 N/A
GNMA mortgage servicing rights 300,465 213,640 N/A
$ 2,066,320 $ 1,913,443
Non-consolidated variable interest entities
Joint Ventures $ 15,342 $ 11,818 $ 17,528

Consolidated VIEs

The Company is ~~generally determined to be the primary beneficiary in VIEs established for~~a holding company, its ~~securitization activities when it has a controlling financial~~sole material asset is its equity interest in LD Holdings and as the VIE, primarily due to its servicing activities and because it holds a beneficial interest in the VIE that could be potentially significant (in certain cases). The consolidated VIEs included in the consolidated balance sheets represent separate entities with whichsole managing member of LD Holdings, the Company indirectly operates and controls all of LD Holdings’ business and affairs. LD Holdings is ~~involved. The third-party investors in~~considered a VIE and the ~~obligations~~financial results of ~~consolidated VIEs have legal recourse only~~LD Holdings and its subsidiaries are consolidated. A portion of net earnings or loss is allocated to noncontrolling interest to reflect the ~~assets~~entitlement of the VIEs and do not have such recourse to the Company, except for the customary representation and warranty provisions. In addition, the cash flows from the assets are restricted only to pay such liabilities. Thus, the Company’s economic exposure to loss from outstanding third-party financing related to consolidated VIEs is limited to the carrying value of the consolidated VIE assets. Generally, all assets of consolidated VIEs, presented below based upon the legal transfer of the underlying assets in order to reflect legal ownership, are restricted for the benefit of the beneficial interest holders.Continuing LLC Members.

The Company ~~originates~~consolidates securitization facilities that finance mortgage loans held for sale, and ~~services mortgage loans. Mortgage loans are primarily sold to GSEs who then securitize these loans~~SPEs established as ~~previously discussed. The Company executes private-label securitizations~~trusts to finance mortgage ~~loans~~servicing rights and ~~mortgage~~ servicing ~~rights.~~advance receivables. The ~~associated securitization entities are consolidated on the consolidated balance sheets.~~

~~In executing a securitization transaction, the~~ Company ~~sells~~transfers assets ~~(financial and non-financial)~~ to a securitization or trust, ~~for cash, and other retained interests. The securitization entity is funded through the issuance of~~which issue beneficial interests ~~in the securitized assets. The beneficial interests take the form of either notes and/or trust certificates, which are sold to investors and/or retained by the Company. These beneficial interests~~that are collateralized by the transferred assets and entitle the investors to specified cash flows generated from the underlying assets. In addition to providing a source of liquidity and cost-efficient funding, securitizing these assets also reduces the Company’s credit exposure to the borrowers beyond any economic interest the Company may retain.

Each securitization is governed by various legal documents that limit and specify the activities of the securitization entity. The securitization entity is generally allowed to acquire the financial assets, to issue beneficial interests to investors to fund the acquisition of the assets, and to enter into derivatives or other yield maintenance contracts to hedge or mitigate certain risks related to the assets or beneficial interests of the entity. A servicer, is appointed pursuant to the underlying legal documents to service the assets the securitization entity holds and the beneficial interests it issues. Servicing functions include, but are not limited to, general collection activity on current and noncurrent accounts, loss mitigation efforts including repossession and sale of collateral, as well as preparing and furnishing statements summarizing the asset and beneficial interest performance. These servicing responsibilities constitute continued involvement in the transferred assets.

Cash flows from the assets transferred into the securitization entity represent the sole source for payment of distributions on the beneficial interests issued by the securitization entity and for payments to the parties that perform services for the securitization entity, such as the servicer or the trustee.

therefrom. The Company may ~~hold retained~~retain beneficial interests in the securitizations including, but not limited to, subordinated securities and residuals; and other residual interests. These retained interests may represent a form of significant continuing economic interests. Certain of these retained interests provide credit enhancement to the trust as they may absorb credit losses or other cash shortfalls.

assets transferred. The Company also holds certain conditional repurchase options specific to these securitizations that allow it to repurchase assets from the securitization entity. The ~~majority~~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 ~~provide~~including customary representations and warranties. For securitization facilities, the Company, as seller, ~~with a prepayment~~has an option to prepay and redeem outstanding classes of issued notes ~~at the Company’s discretion~~ after a set time period has elapsed. The ~~repurchase price~~Company’s exposure to these entities is ~~typically the discounted securitization balance~~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 table below presents a summary of the carrying value and balance sheet classification of assets ~~plus accrued interest when applicable. The Company generally has discretion regarding when or if it will exercise these options, but would do so only when it is~~and liabilities in the Company’s ~~best interest.~~securitization and SPE VIEs

In addition to customary representation and warranty provisions, the mortgage servicing rights and warehouse securitizations permit the securitization trust to have recourse to the Company, as such the Company retains certain risks. In each securitization, representation and warranty provisions generally require the Company to repurchase assets or indemnify the investor or other party for incurred losses to the extent it is determined that the assets were ineligible or were otherwise defective at the time of sale. The Company did not provide any non-contractual financial support to these entities for the three months ended March 31, 2021 and 2020.


	September 30, 2023		December 31, 2022

Assets
Loans held for sale, at fair value	$	492,374	$	497,574
Restricted cash	13,641		6,735
Servicing rights, at fair value	621,435		544,729
Prepaid expenses and other assets	54,924		54,887
Total	$	1,182,374	$	1,103,925

Liabilities
Warehouse and other lines of credit	$	500,000	$	500,000
Debt obligations, net:
MSR Facilities	150,000		116,874
Servicing advance facilities	15,997		48,484
Term notes	200,000		199,666

Total	$	865,997	$	865,024

Non-Consolidated VIEs

The nature, purpose, and activities of non-consolidated VIEs currently encompass the Company’s ~~use~~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.


	September 30, 2023
	Carrying value				Maximum exposure to loss		Total assets in VIEs
	Assets		Liabilities
Retained interests	$	89,334	$	—	$	89,334	$	2,225,893
Investments in joint ventures	18,778		—		18,778		19,788
Total	$	108,112	$	—	$	108,112

	December 31, 2022
	Carrying value				Maximum exposure to loss		Total assets in VIEs
	Assets		Liabilities
Retained interests	$	94,243	$	—	$	94,243	$	2,309,739
Investments in joint ventures	20,410		—		20,410		38,682
Total	$	114,653	$	—	$	114,653

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 and servicing administrator 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 September 30, 2023, the remaining principal balance of loans transferred to these securitization trusts was $2.2 billion of which $8.7 million was 90 days or more past due.

Investments in joint ~~venture entities~~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 ~~the~~ customers referred ~~to the joint ventures~~ 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 ~~$2.2~~$5.6 million and ~~$1.3~~$15.1 million for the three and nine months ended ~~March 31, 2021~~September 30, 2023, respectively, and ~~2020, respectively.~~$4.6 million and $10.8 million for the three and nine months ended September 30, 2022, respectively, and is included in other income in the consolidated statements of operations.

NOTE 98 – WAREHOUSE AND OTHER LINES OF CREDIT

At ~~March 31, 2021,~~September 30, 2023, the Company iswas a party to 149 revolving lines of credit with lenders providing ~~$10.3~~an aggregate $3.9 billion of warehouse and ~~revolving credit~~securitization facilities. The ~~warehouse and revolving credit~~ 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 ~~on warehouse and revolving lines of credit~~ is recorded to interest expense on the consolidated statements of operations.

~~The warehouse and revolving lines of credit are repaid using proceeds from the sale of loans.~~ The base interest rates on the ~~Company’s warehouse lines~~facilities bear interest at ~~30-day LIBOR~~the secured overnight financing rate (“SOFR”), or other alternative base rate, plus a margin. Some of the ~~lines~~facilities carry additional ~~fees in the form of annual facility~~ 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. ~~The weighted average~~As of September 30, 2023, the interest rate ~~at March 31, 2021 totaled 2.22%~~was comprised of the applicable base rate plus a spread ranging from 1.37% to 2.25%. The Company’s warehouse lines are scheduled to expire through 2021 under one year terms and all lines are subject to renewal based on an annual credit review conducted by the lender. The Company’s securitization facilities’ notes have ~~two~~ ~~to three year terms and are due May 2021, October 2021, October 2022, December 2023, and February 2024.~~

The base interest ~~rates~~rate for ~~all~~ warehouse ~~lines of credit are~~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. ~~Certain~~The warehouse lines are scheduled to expire through 2024. As of September 30, 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 ~~at all times,~~ to maintain cash accounts with minimum required ~~balances.~~balances at all times. As of ~~March 31, 2021~~September 30, 2023 and December 31, ~~2020, there was $7.5~~2022, the Company had posted a total of $17.9 million and ~~$6.7~~$11.0 million, ~~respectively, held in these accounts which are recorded as a component of~~ restricted cash onas collateral with our warehouse lenders and securitization facilities of which $4.3 million and $4.3 million were the ~~consolidated balance sheets.~~minimum required balances.

Under the terms of these warehouse lines, the Company is required to maintain various ~~financial and other~~ covenants. These financial covenants include, but are not limited to, maintaining (i) minimum tangible net worth, (ii) minimum liquidity, (iii) a minimum current ratio, (iv) a maximum distribution requirement, (v) a maximum leverage ratio, (vi) pre-tax net income

~~requirements and (vii) a maximum warehouse capacity ratio.~~ As of ~~March 31, 2021,~~September 30, 2023, the Company was in compliance with ~~all~~covenants under the warehouse ~~lending related covenants.~~lines.

Securitization Facilities

In October 2018, the Company issued notes through a securitization facility (“2018 Securitization Facility”) backed by a revolving warehouse line of credit. The 2018 Securitization Facility is secured by newly originated, first-lien, fixed rate residential mortgage loans eligible for purchase by the GSEs as well as non-GSE eligible jumbo mortgage loans. The 2018 Securitization Facility issued $300.0 million in notes and certificates that bear interest at 30-day LIBOR plus a margin. The 2018 Securitization Facility will terminate on the earlier of (i) the two-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. In October 2019, the Company repaid $100.0 million in notes and certificates of the 2018 Securitization Facility. In October 2020, the Company repaid the remaining $200.0 million in notes and certificates.

In May 2019, the Company issued notes through a new securitization facility (“2019-1 Securitization Facility”) backed by a revolving warehouse line of credit. The 2019-1 Securitization Facility is secured by newly originated, first-lien, fixed rate or adjustable rate, residential mortgage loans which are originated in accordance with the criteria of Fannie Mae or 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 2019-1 Securitization Facility issued $300.0 million in notes and certificates that bear interest at 30-day LIBOR plus a margin. The 2019-1 Securitization Facility will terminate on the earlier of (i) the two-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.

In October 2019, the Company issued notes through an additional securitization facility (“2019-2 Securitization Facility”) backed by a revolving warehouse line of credit. The 2019-2 Securitization Facility is secured by newly originated, first-lien, fixed rate or adjustable rate, residential mortgage loans which are originated in accordance with the criteria of Fannie Mae or 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 2019-2 Securitization Facility issued $300.0 million in notes and certificates that bear interest at 30-day LIBOR plus a margin. The 2019-2 Securitization Facility will terminate on the earlier of (i) the two-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.

In October 2020, the Company issued notes through an additional securitization facility (“2020-1 Securitization Facility”) backed by a revolving warehouse line of credit. The 2020-1 Securitization Facility is secured by newly originated, first-lien, residential mortgage loans eligible for purchase by 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 2020-1 Securitization Facility issued $600.0 million in notes and certificates that bear interest at 30-day LIBOR plus a margin. The 2020-1 Securitization Facility will terminate on the earlier of (i) the two-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.~~

In December 2020, the Company issued notes through a new securitization facility (“2020-2 Securitization Facility”) backed by a revolving warehouse line of credit. The 2020-2 Securitization Facility is secured by newly originated, first-lien, fixed rate residential mortgage loans eligible for purchase by the GSEs or in accordance with the criteria of Ginnie Mae for the guarantee of securities backed by mortgage loans. The 2020-2 Securitization Facility issued $500.0 million in notes and certificates that bear interest at 30-day LIBOR plus a margin. The 2020-2 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.

~~In February~~ 2021, the Company issued notes and a class of owner trust certificates through an additional securitization facility (“~~2021-1~~2021-3 Securitization Facility”) backed by a revolving warehouse line of credit. The ~~2021-1~~2021-3 Securitization Facility is secured by newly originated, first-lien, fixed-rate or adjustable-rate, residential mortgage loans ~~which are~~ 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 ~~2021-1~~2021-3 Securitization Facility issued $500.0 million in notes that bear interest at ~~30-day LIBOR~~SOFR, plus a margin. The ~~2021-1~~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 ~~certain~~ information on warehouse ~~borrowings:~~and securitization facilities and the outstanding balance as of September 30, 2023 and December 31, 2022:

Outstanding Balance
Committed
Amount Uncommitted
Amount Total
Facility
Amount Expiration
Date March 31,
2021 December 31,
2020
Facility 1(1)
$ 1,000,000 $ 1,000,000 $ 2,000,000 10/29/2021 $ 1,876,708 $ 1,665,005
Facility 2(2)
0 600,000 600,000 9/27/2021 496,200 226,891
Facility 3(3)
0 350,000 350,000 4/20/2021 289,582 206,863
Facility 4 100,000 300,000 400,000 7/9/2021 336,378 335,096
Facility 5(4)
0 200,000 200,000 N/A 121 0
Facility 6(5)
100,000 1,000,000 1,100,000 10/11/2021 751,429 626,741
Facility 7(6)
0 2,000,000 2,000,000 5/5/2021 1,244,566 919,068
Facility 8(7)
300,000 0 300,000 5/14/2021 300,000 300,000
Facility 9(7)
300,000 0 300,000 10/23/2021 300,000 299,803
Facility 10 0 850,000 850,000 N/A 748,460 358,761
Facility 11(7)
600,000 0 600,000 10/25/2022 600,000 600,000
Facility 12(7)
500,000 0 500,000 12/17/2023 500,000 500,000
Facility 13 0 600,000 600,000 8/25/2021 359,462 259,247
Facility 14(8)
0 0 0 2/10/2021 6,544 279,954
Facility 15 500,000 0 500,000 2/2/2024 500,000 0
Total $ 3,400,000 $ 6,900,000 $ 10,300,000 $ 8,309,450 $ 6,577,429




								Outstanding Balance
	Committed Amount		Uncommitted Amount		Total Facility Amount		Expiration Date	September 30, 2023		December 31, 2022
Facility 1(1)	$	400,000	$	350,000	$	750,000	10/26/2023	$	421,563	$	382,098
Facility 2(2)(3)	—		300,000		300,000		9/23/2024	171,715		236,144
Facility 3	—		300,000		300,000		4/16/2024	151,185		177,900
Facility 4	—		300,000		300,000		12/28/2023	148,419		202,548
Facility 5(3)	—		200,000		200,000		N/A	1,230		—
Facility 6(3)	100,000		500,000		600,000		9/27/2024	115,324		180,273
Facility 7(4)	250,000		350,000		600,000		11/1/2023	152,395		295,064






Facility 8	—		300,000		300,000		9/20/2024	236,028		172,575
Facility 9(5)	500,000		—		500,000		10/21/2024	500,000		500,000
Total	$	1,250,000	$	2,600,000	$	3,850,000		$	1,897,859	$	2,146,602

(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. In October 2023, this facility was extended to mature in October 2024.

(2)In October 2023, the $300.0 million facility was amended to provide $1.0 million committed and $299.0 million uncommitted.

(3)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 April 2021, this facility was extended for 30 days.~~

(4)In ~~addition to~~November 2023, the warehouse ~~line, the lender provides a separate gestation~~ facility ~~to finance recently sold MBS up to the MBS settlement date.~~was not renewed.

(5)~~In addition to the warehouse line, the lender provides a separate gestation facility to finance recently sold MBS up to the MBS settlement date.~~

~~(6)~~In addition to the outstanding balance secured by mortgage loans, the Company has $15.0 million outstanding to finance servicing rights included within debt obligations in the consolidated balance sheets. In May 2021, the expiration date of this facility was extended to May 21, 2021.

~~(7)~~Securitization backed by a revolving warehouse facility to finance newly originated first-lien fixed and adjustable rate mortgage loans.

~~(8)The Company did not renew this facility and repaid the remaining balance in April 2021.~~

The following table presents ~~certain~~ information on borrowings under warehouse ~~borrowings:~~and securitization facilities:


		Three Months Ended March 31,						Three Months Ended September 30,					Nine Months Ended September 30,
		2021			2020					2023			2022			2023			2022
Maximum outstanding balance during the period	Maximum outstanding balance during the period	$	9,109,780		$	3,846,596			Maximum outstanding balance during the period	$	2,280,996		$	4,354,864		$	2,280,996		$	7,672,559
Average balance outstanding during the period	Average balance outstanding during the period	7,507,914			3,288,591				Average balance outstanding during the period	1,879,355			3,417,252			1,721,404			4,868,397
Collateral pledged (loans held for sale)	Collateral pledged (loans held for sale)	8,514,329			3,510,797				Collateral pledged (loans held for sale)	1,980,157			2,566,330			1,980,157			2,566,330
Weighted average interest rate during the period	Weighted average interest rate during the period	2.34		%	3.24		%		Weighted average interest rate during the period	7.23		%	3.81		%	6.97		%	2.64		%

NOTE 109 – DEBT OBLIGATIONS

The following table presents ~~certain information on~~the outstanding ~~debt.~~debt as of September 30, 2023 and December 31, 2022:


	September 30, 2023		December 31, 2022
Secured debt obligations, net:
Secured credit facilities
MSR facilities	$	925,130	$	963,834
Securities financing facilities	76,264		85,513
Servicing advance facilities	15,997		48,484
Total secured credit facilities	1,017,391		1,097,831
Term Notes	200,000		199,666

Total secured debt obligations, net	1,217,391		1,297,497
Unsecured debt obligations, net:


Senior Notes	988,696		991,822

Total debt obligations, net	$	2,206,087	$	2,289,319

Outstanding Balance
March 31,
2021 December 31,
2020
Secured debt obligations, net:
Secured credit facilities $ 0 $ 0
2020-VF1 Notes 8,720 7,571
GMSR VFN 15,000 15,000
Term notes 198,791 198,640
Total secured debt obligations, net 222,511 221,211
Unsecured debt obligations, net:
Senior notes 1,082,578 491,255
Total unsecured debt obligations, net 1,082,578 491,255
Total debt obligations, net $ 1,305,089 $ 712,466

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 September 30, 2023.

Secured Credit Facilities

~~Original~~ Secured ~~Credit Facility.~~ credit facilities are revolving facilities collateralized by MSRs, trading securities, and servicing advances.

MSR Facilities

~~The~~

In October 2014, the Company entered into a $25.0 million ~~revolving secured~~ credit facility ~~(the “Original Secured Credit Facility”) in October 2014~~ to finance servicing rights and for other working capital needs and general corporate purposes. The facility was secured by Freddie Mac mortgage servicing rights. The facility was not renewed and was paid off in September 2023.

In December 2021, the Company ~~has~~ entered into ~~subsequent amendments~~a credit facility agreement. The agreement was amended in June 2023 to provide for $490.0 million in borrowing capacity, with an option to increase up to $600.0 million upon mutual consent, available to the ~~lender both increasing and decreasing the size of the facility. At March 31, 2021, capacity under the~~Company. The facility ~~was $150.0 million. The Original Secured Credit Facility~~ is secured by Freddie Mac mortgage servicing rights with a fair value of $745.0 million as of September 30, 2023. The facility bears interest at SOFR, plus a margin per annum and matures in ~~June 2021~~December 2023. At September 30, 2023, there was $450.0 million outstanding on this facility and ~~accrues~~$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 $615.6 million as of September 30, 2023. The facility bears interest at SOFR, plus a ~~base rate~~margin per annum and matures in January 2025. At September 30, 2023, there was $325.6 million outstanding on this facility and no unamortized deferred financing costs.

In August 2017, the Company established the GMSR Trust to finance its Ginnie Mae mortgage servicing rights through the issuance of ~~30-day LIBOR~~variable funding notes or term notes, both secured by participation certificates representing beneficial interests in Ginnie Mae mortgage servicing rights held by the GMSR Trust. These variable funding notes accrue interest at SOFR plus a margin per annum. As of ~~March 31, 2021, there was 0 outstanding balance under~~September 30, 2023, the ~~Original Secured Credit Facility. The~~ Company ~~has~~had pledged ~~$817.5 million in~~participation certificates with a fair value of ~~servicing rights as collateral~~$621.4 million, with $150.0 million in outstanding variable funding notes scheduled to ~~secure outstanding advances under~~mature in November 2023. In November 2023, the ~~Original Secured Credit Facility. Advances for servicing rights are determined using~~maturity of the GMSR Trust variable funding notes was extended to January 2024, with a borrowing ~~base formula calculated against the fair market value~~capacity of the pledged servicing rights. Under the Original Secured Credit Facility, the Company is required to satisfy certain financial covenants, including minimum tangible net worth, minimum liquidity, maximum leverage$175.0 million, which also includes variable funding notes secured by principal and ~~debt service coverage. As of March 31, 2021, the Company was in compliance with all such covenants.~~

~~Second Secured Credit Facility.~~ The Company amended one of its warehouse line facilities to provide a $50.0 million sub-limit to finance servicing rights and for other working capital needs and general corporate purposes (the “Second Secured Credit Facility”) in May 2015. In March 2021, we terminated the sub-limit on this facility.interest advance receivables or

2825

servicing advance receivables related to residential mortgage loans serviced on behalf of Ginnie Mae, as discussed in the Servicing Advance Facilities section below.

Securities Financing Facilities

~~2020-VF1 Notes~~The Company has entered into master repurchase agreements to finance retained interest securities related to its securitizations. The securities financing facilities have an advance rate between 70% and 90% based on classes of the securities and accrue interest at a rate of 90-day SOFR, plus a margin. The securities financing facilities are secured by the trading securities, which represent our retained interests in the credit risk of the assets collateralizing certain securitization transactions. As of September 30, 2023, the trading securities had a fair value of $89.3 million on the consolidated balance sheets and there were $76.3 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 ~~issued~~can issue up to ~~$130.0~~$100.0 million in variable funding notes (the “2020-VF1 Notes”). The 2020-VF1 Notes accrue interest at ~~30-day LIBOR~~SOFR, plus a margin per annum and mature in September ~~2021~~2024 (unless earlier redeemed in accordance with their terms). ~~The~~At September 30, 2023, there was $16.0 million in 2020-VF1 Notes are secured by LDLLC's rights to reimbursement for advances made pursuant to Fannie Mae and Freddie Mac requirements. At March 31, 2021, there was $8.7 million in the advanced receivables trust outstanding, net of $0.7 million in deferred financing costs. Under this facility, the Company is required to satisfy certain financial covenants including minimum levels of tangible net worth and liquidity and maximum levels of consolidated leverage. As of March 31, 2021, the Company was in compliance with all such covenants.outstanding.

~~GMSR VFN~~

The Company entered into a master repurchase agreement with one of its wholly-owned subsidiaries, loanDepot GMSR Master Trust (“GMSR Trust”) in August 2017 to finance Ginnie Mae mortgage servicing rights (the “GNMA MSRs”) owned by the Company (the “GNMA MSR Facility”) pursuant to the terms of a base indenture (the “GNMA MSR Indenture”). The Company pledged participation certificates representing beneficial interests in GNMA MSRs to the GMSR Trust. The Company is party to an acknowledgment agreement with Ginnie Mae whereby we may, from time to time pursuant to the terms of any supplemental indenture, issue to institutional investors variable funding notes or one or more series of term notes, in each case secured by the participation certificates relating to the GNMA MSRs held by the GMSR Trust. In ~~August 2017,~~November 2021, the Company, through the GMSR Trust, issued a variable funding ~~note (the “GMSR VFN”) in the initial amount of $65.0 million. The maximum amount of the GMSR VFN is $150.0 million. The GMSR VFN is~~notes secured by ~~GNMA MSRs~~principal and ~~bears~~interest advance receivables and servicing advance receivables related to residential mortgage loans serviced on behalf of Ginnie Mae. These variable funding notes bear interest at ~~30-day LIBOR~~SOFR plus a margin per annum. ~~The Company amended the GMSR VFN in~~As of September ~~2018 to amend certain terms and extend the maturity date to September 2020. The Company amended the GMSR VFN again to extend the maturity date to October 2021. At March 31, 2021,~~30, 2023, there was ~~$15.0 million~~no balance outstanding on these variable funding notes, which were scheduled to mature in ~~GMSR VFN outstanding. Under this facility,~~November 2023. In November 2023, the ~~Company is required~~variable funding notes were extended to ~~satisfy certain financial covenants. As of March 31, 2021, the Company was in compliance with all such covenants.~~January 2024.

Term Notes

In ~~November 2017,~~October 2018, the Company, through the GMSR Trust issued an aggregate principal amount of $110.0 million in secured term notes (the “Term Notes”). The Term Notes were secured by certain participation certificates relating to GNMA MSRs pursuant to the GNMA MSR Facility. In October 2018, the GMSR Trust was amended and restated for the purpose of issuing the Series 2018-GT1 Term ~~Notes. The~~Notes (“Term Notes”). In September 2023, the Term Notes were extended to mature in October 2025 and accrue interest at ~~30-day LIBOR~~SOFR plus a margin per ~~annum and mature in October~~annum. At September 30, 2023, ~~or, if extended pursuant to the terms of the related indenture supplement, October 2025 (unless earlier redeemed in accordance with their terms). The Company issued~~there was $200.0 million in Term Notes outstanding and ~~used the proceeds to pay off $110.0 million in outstanding GMSR Term Notes. At March 31, 2021, there was $198.8 million in Term Notes outstanding, net of $1.2 million in~~no unamortized deferred financing costs. ~~Under this facility, the Company is required to satisfy certain financial covenants. As of March 31, 2021, the Company was in compliance with all such covenants.~~

Senior Notes

In October 2020, the Company issued $500.0 million in aggregate principal amount of 6.50% unsecured 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. ~~At any time prior to November 1, 2022, we~~The Company may redeem some or all of the 2025 Senior Notes at a price equal to 100% of the principal amount of the 2025 Senior Notes, plus accrued and unpaid interest, if any, to, but not including, the date of redemption plus a make-whole premium. We may also redeem the 2025 Senior Notes, ~~at our option,~~ in whole or in part, at ~~any time on or after November 1, 2022 at~~ various redemption prices. ~~In addition, subject to certain conditions at any time prior to November 1, 2022, we may redeem up to 40%~~During the third quarter of 2023, the ~~principal amount~~Company repurchased $2.3 million of ~~the~~ 2025 Senior Notes ~~with the proceeds of certain equity offerings~~ at ~~a redemption~~an average purchase price of ~~106.50%~~79.8% of par, which resulted in a $436,000 gain on extinguishment of debt. Gain on extinguishment of debt is recorded in other interest expense on the ~~principal amount~~consolidated statement of ~~the 2025 Senior Notes, together with accrued and unpaid interest,~~

~~if any, to, but not including, the date~~operations. As of ~~redemption. At March 31, 2021,~~September 30, 2023, there ~~was $491.7~~were $497.8 million in 2025 Senior Notes outstanding ~~net of $8.3~~and $3.7 million in unamortized deferred financing costs.

In March 2021, the Company issued $600.0 million in aggregate principal amount of 6.125% unsecured 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, wethe 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. We may also redeem the 2028 Senior Notes at ~~our option, 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, we may redeem up~~100% of the principal, plus accrued interest and a make-whole premium. Up to 40% of the principal ~~amount of the 2028 Senior Notes~~may be redeemed before April 1, 2024 with ~~the~~ proceeds offrom certain equity offerings at a ~~redemption~~ price of 106.125% of the principal ~~amount of~~plus accrued interest. After April 1, 2024 the Company may redeem the 2028 Senior Notes ~~together with accrued and unpaid interest, if any, to, but not including,~~at various redemption prices. During the ~~date~~first quarter of ~~redemption. At March 31, 2021,~~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. During the second quarter of 2023, the Company repurchased $0.1 million of 2028 Senior Notes at a purchase price of 60.1% of par, which resulted in a $39,000 gain on extinguishment of debt. In the third quarter of 2023, the Company repurchased $3.0 million of 2028 Senior Notes at a purchase price of 58.5% of par, resulting in a $1.2 million gain on extinguishment of debt. As of September 30, 2023, there ~~was $590.9~~were $499.4 million in 2028 Senior Notes outstanding ~~net of $9.1~~and $4.7 million in unamortized deferred financing costs.

Interest Expense

Interest expense on all outstanding debt obligations with variable rates is paid based on ~~30-day LIBOR~~SOFR, or other alternative base rate, plus a margin ranging from ~~2.90%~~0.90% - ~~4.75%~~3.50%.

NOTE 10 – 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 $389.8 million and $488.0 million as of September 30, 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 September 30, 2023 and December 31, 2022.


	September 30, 2023		December 31, 2022
Holding Member Interests:	Holdco Units	Ownership Percentage	Holdco Units	Ownership Percentage
loanDepot, Inc.	176,791,718	55.15%	169,523,682	53.78%
Continuing LLC Members	143,747,549	44.85%	145,693,119	46.22%
Total	320,539,267	100.00%	315,216,801	100.00%

NOTE 11 – 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. Diluted EPS was computed using the treasury stock method for Class A RSUs, nonqualified stock options, and ESPP shares and the if-converted method for Class C common stock.

There was no Class B common stock outstanding during the nine months ended September 30, 2023 and 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:


	Three Months Ended						Nine Months Ended
	September 30, 2023						September 30, 2023
	Class A		Class D		Total		Class A		Class D		Total


Net loss attributable to loanDepot, Inc.	$	(7,446)	$	(9,153)	$	(16,599)	$	(36,580)	$	(46,370)	$	(82,950)





Weighted average shares - basic	78,936,133		97,026,671		175,962,804		76,542,315		97,026,671		173,568,986

Loss per share - basic	$	(0.09)	$	(0.09)	$	(0.09)	$	(0.48)	$	(0.48)	$	(0.48)

Diluted loss per share:



Net loss allocated to common stockholders - diluted	$	(7,446)	$	(9,153)	$	(16,599)	$	(36,580)	$	(46,370)	$	(82,950)





Weighted average shares - diluted	78,936,133		97,026,671		175,962,804		76,542,315		97,026,671		173,568,986

Loss per share - diluted	$	(0.09)	$	(0.09)	$	(0.09)	$	(0.48)	$	(0.48)	$	(0.48)


	Three Months Ended						Nine Months Ended
	September 30, 2022						September 30, 2022
	Class A		Class D		Total		Class A		Class D		Total


Net loss attributable to loanDepot, Inc.	$	(24,200)	$	(35,881)	$	(60,081)	$	(70,420)	$	(125,330)	$	(195,750)





Weighted average shares - basic	65,437,698		97,026,671		162,464,369		54,611,035		97,192,893		151,803,928

Loss per share - basic	$	(0.37)	$	(0.37)	$	(0.37)	$	(1.29)	$	(1.29)	$	(1.29)

Diluted loss per share:



Net loss allocated to common stockholders - diluted	$	(24,200)	$	(35,881)	$	(60,081)	$	(70,420)	$	(125,330)	$	(195,750)





Weighted average shares - diluted	65,437,698		97,026,671		162,464,369		54,611,035		97,192,893		151,803,928

Loss per share - diluted	$	(0.37)	$	(0.37)	$	(0.37)	$	(1.29)	$	(1.29)	$	(1.29)

For the three and nine months ended September 30, 2023, 147,171,089 and 148,741,661, respectively, of 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 and nine months ended September 30, 2023, 14,659,858 and 18,796,509, respectively, 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 and nine months ended September 30, 2022, 156,677,534 and 167,796,888, respectively, of 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 and nine months ended September 30, 2022, 14,869,764 and 12,907,024, respectively, of Class A RSUs and nonqualified stock options were determined to be anti-dilutive, and thus excluded from the computation of diluted loss per share.

NOTE 12 – INCOME TAXES

~~The components of the provision for income taxes are summarized below.~~

Three Months Ended
March 31,
2021 2020
Total income before income taxes and non-controlling interest $ 446,130 $ 88,996
Provision for income taxes 18,277 0
Effective tax provision rate 4.1 % 0 %

The Company’s income tax expense varies from the expense that would be expected based on statutory rates due principally to its organizational structure. Prior to the IPO, income taxes for LD Holdings at the consolidated level were primarily federal, state, and local taxes for ACT, a C Corporation. As part of the completion of the IPO, the Company became a C Corporation subject to federal, state, and local income taxes with respect to its share of net taxable income of LD Holdings.

As of ~~March~~September 30, 2023 and December 31, ~~2021,~~2022, the Company had a deferred tax asset before any valuation allowance of ~~$48 thousand~~$104.5 million and $70.5 million, respectively, and a deferred tax liability of ~~$203.9 million.~~$190.2 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~~September 30, 2023 and December 31, ~~2021~~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 ~~the TRA~~a Tax Receivable Agreement (“TRA”) as a result of the ~~offering transaction.~~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, 2021~~September 30, 2023 and December 31, ~~2020~~2022 using the combined federal and state rate (less federal benefit) of ~~26%.~~27.0% and 27.4%, respectively. 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, 2021,~~September 30, 2023, the Company ~~did 0t have~~had a valuation allowance of deferred tax assets $0.4 million on ~~any~~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 ~~$8.6~~$53.8 million and $50.7 million as of ~~March~~September 30, 2023 and December 31, ~~2021,~~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,~~ refer to Note ~~16-~~14- Commitments and Contingencies, for further information on the ~~TRA.~~TRA liability.

NOTE 1213 – RELATED PARTY TRANSACTIONS

In 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 ~~to it~~ by ~~the~~its joint ventures for which the Company pays the joint ventures a broker fee.

Fees earned, costs incurred, and amounts payable to or receivable from joint ventures were as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Loan processing and administrative services fee income	$	5,639	$	4,876	$	15,033	$	12,754
Loan origination broker fees expense	$	34,402	$	31,917	$	94,784	$	81,843

Three Months Ended
March 31,
2021 2020
Loan processing and administrative services fee income $ 3,353 $ 2,609
Loan origination broker fees expense 18,450 13,946

March 31,
2021 December 31,
2020
Amounts (payable) receivable from joint ventures $ (3,909) $ 2,196


	September 30, 2023		December 31, 2022
Amounts payable to joint ventures	$	6,124	$	9,776

The Company ~~paid management fees of $0.2 million~~has entered into a TRA with Parthenon Stockholders and $0.3 million during the three months ended March 31, 2021 and 2020, respectively, and $0.2 million and $0.3 million to a Unitholder of the Company during the three months ended March 31, 2021 and 2020, respectively. The Company employed certain ~~employees that provided services to a Unitholder whose salaries totaled $0.1 million and $0.1 million during the three months ended March 31, 2021 and 2020, respectively.~~

~~NOTE 13 – EQUITY~~

As a result of the IPO and reorganization discussed in Note 1- Description of Business, Presentation and Summary of Significant Accounting Policies, the financial statements for the periods prior to the IPO were adjusted to combine the previously separate entities for presentation.

Prior to the IPO, the Company completed a reorganization by which it changed its equity structure to create a single class of LLC Units in LD Holdings. Prior to that transaction, the capital structure consisted of different classes of membership interests held by Continuing LLC Members. ~~The LLC Units~~There were ~~then exchanged on a 1-for-one basis for Holdco Units and Class C common stock. The Continuing LLC Members have~~no payments made during the right to exchange 1 Holdco Unit and 1 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.

~~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 was $1.2 billion and $1.7 billion as of March 31, 2021 and December 31, 2020, respectively, represented the economic interest in LD Holdings held by the Continuing LLC Members. The following table summarizes the ownership of LD Holdings as of March 31, 2021.

Holding Member Interests: Holdco Units Ownership Percentage
loanDepot, Inc. 126,337,387 41.28%
Continuing LLC Members 179,746,190 58.72%
Total 306,083,577 100.00%

~~NOTE 14 – STOCK-BASED COMPENSATION~~

~~The stock-based compensation expense recognized on all share-based awards was $59.8 million for the three~~nine months ended March 31, 2021. Forfeitures during the three months ended March 31, 2020 resulted in a $0.1 million reversal of stock-based compensation expense. As of March 31, 2021, there was $27.0 million of unrecognized compensation related to all unvested awards.September 30, 2023 or September 30, 2022.

~~LDI Awards~~

Effective upon the completion of the IPO, the Company adopted the 2021 Plan. The 2021 Plan allows for the grant of stock options, restricted stock, RSUs, and stock appreciation rights. The Company reserved a total of 16,250,000 shares of common stock for issuance pursuant to the 2021 Plan, which amount shall be increased on the first day of each fiscal year during the term of the 2021 Plan commencing with the 2022 fiscal year by (1) 2% of the total number of shares of common stock outstanding on the last day of the immediately preceding fiscal year, or (ii) a lesser amount determined by the Company's board of directors. There are currently only RSUs granted under the 2021 Plan. The following is a summary of RSU activity for the three months ended March 31, 2021.

Three Months Ended
March 31,
2021
Shares Weighted Average Grant Date Fair Value
Unvested - beginning of period 0 $ 0
Granted 2,925,000 26.45
Vested (2,215,687) 26.45
Unvested - end of period 709,313 26.45

Total compensation expense for the LDI awards was $59.1 million for the three months ended March 31, 2021. Unrecognized compensation expense related to these RSUs was $18.3 million and is expected to be recognized over a weighted average period of 4.8 years.

~~Holdco Units~~

Prior to the IPO, the Company’s 2009 Incentive Equity Plan, 2012 Incentive Equity Plan, and 2015 Incentive Equity Plan (collectively, the “Plans”) provided for the granting of Class Z, Class Y, Class X, and Class W Common Units of LD Holdings to employees, managers, consultants, and advisors of the Company and its subsidiaries. Participants that received grants or purchased Class Z, Class Y, Class X, or Class W Common Units of LD Holdings pursuant to the Plans were required to become a party to the Limited Liability Company Agreement.

As part of the IPO and reorganization discussed in Note 1- Description of Business, Presentation, and Summary of Significant Accounting Policies, any outstanding units were equitably adjusted and replaced with a single new class of LLC Units that were exchanged on a 1-for-one basis for Class A Holdco Units. No further awards will be granted under the Plans as both the Plans and LLC Agreement were terminated.

~~The following table presents a summary of the changes in awards subsequent to the conversion into Class A Holdco Units for the three months ended March 31, 2021:~~

Three Months Ended
March 31,
2021
Shares Weighted Average Grant Date Fair Value
Unvested - beginning of period 19,632,883 $ 0.500
Vested (709,961) 0.500
Unvested - end of period 18,922,922 0.490

The following table presents a summary of the changes in Class Z, Class Y, Class X, Class W and Class V Common Units for the three months ended March 31, 2020 and for the period January 1, 2021 through February 10, 2021, prior to the conversion to Class A Holdco Units described above.

January 1, 2021
through
February 10, 2021 Three Months Ended
March 31,
2020
Shares Weighted Average Grant Date Fair Value Shares Weighted Average Grant Date Fair Value
Unvested - beginning of period 610,497,758 $ 0.016 100,679,480 $ 0.006
Vested (12,656,379) 0.016 (1,129,648) 0.006
Forfeited/Cancelled (3,552,286) 0.016 (10,008,240) 0.013
Unvested - end of period 594,289,093 0.016 89,541,592 0.005

Total compensation expense associated with the Holdings Units was $0.8 million for the three months ended March 31, 2021. Forfeitures during the three months ended March 31, 2020 resulted in a reversal of stock compensation expense of $0.1 million.

At March 31, 2021 and December 31, 2020, the total unrecognized compensation cost related to unvested unit grants was $8.7 million and $9.5 million, respectively. This cost is expected to be recognized over the next 3.9 years.

~~NOTE 15 – Earnings per Share~~

3329

Basic earnings per share of Class A common stock and Class D common stock is computed by dividing net income 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 per share of Class A common stock and Class D common stock is computed by dividing net income 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.

Earnings per share information has not been presented for the three months ended March 31, 2020. The basic and diluted earnings per share period for the three months ended March 31, 2021 represents only the period from February 11, 2021 to March 31, 2021, which represents the period wherein the Company had outstanding Class A common stock and Class D common stock. There was 0 Class B common stock outstanding as of March 31, 2021.

~~The following table sets forth the calculation of basic and diluted earnings per share for the periods following the reorganization and IPO for Class A common stock and Class D common stock:~~

Three Months Ended
March 31, 2021
Class A Class D Total
Net income attributable to loanDepot, Inc. $ 2,108 $ 42,767 $ 44,875
Net income allocated to common stockholders - basic 2,108 42,767 44,875
Weighted average shares - basic 5,907,740 119,865,057 125,772,797
Earnings per share - basic $ 0.36 $ 0.36 $ 0.36
Diluted earnings per share:
Net income allocated to common stockholders - diluted $ 2,108 $ 42,767 $ 44,875
Weighted average diluted common shares outstanding 5,907,740 119,865,057 125,772,797
Earnings per share - diluted $ 0.36 $ 0.36 $ 0.36

For the period from February 11, 2021 to March 31, 2021, 198,537,418 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 earnings per share.

~~For the period from February 11, 2021 to March 31, 2021, 636,934 of RSUs were determined to be anti-dilutive, and thus excluded from the computation of diluted earnings per share.~~

NOTE ~~16 –~~14– COMMITMENTS AND CONTINGENCIES

Escrow Services

In conducting its operations, the Company, through its wholly-owned subsidiaries, ~~LD Escrow~~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. ~~In the fourth quarter of 2019, LD Escrow transitioned its operations to LDSS.~~ The balances held for the Company’s customers totaled ~~$350.2~~$8.2 million and ~~$377.3~~$5.1 million at ~~March 31, 2021~~September 30, 2023 and December 31, ~~2020,~~2022, respectively.

Legal Proceedings

The Company is a defendant in, or a party to, ~~a number of~~ 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 ~~are turned over to~~may be indemnified and managed by the ~~servicer of~~appropriate party, which may be the ~~loan for those loans the Company does not service.~~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 ~~our~~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.

The Company currently is defending 2 putative Telephone Consumer Protection Act (“TCPA”) class actions. The Company denies the allegations in these cases and is vigorously defending both matters. In one matter, one of three claims is now defunct because of a recent Supreme Court ruling addressing the same issue pled in this matter. The Company intends to file dispositive motions to dismiss the remaining claims, which, if granted, would result in a finding of no liability and dismissal of the action. The Company is also engaged in discussions to settle the remaining claims on an individual basis. In the second matter, the Company intends to file a motion to defeat class certification and also is engaged in settlement negotiations. Given the lawsuits are at the early stages and not yet at the class certification stage, the Company is unable to estimate a range of possible loss with any degree of reasonable certainty.

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 Company’s investigation of the claims is ongoing. The parties have agreed to participate in pre-litigation mediation, which the Company anticipates will take place in late-May 2021. While the Company’s management does not believe these allegations have merit, should the executive file a formal lawsuit against the Company, it could 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~~expects to incur defense costs and other expenses in connection with ~~these~~any such 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 Company’s consolidated financial position, results of operations or cash flows for the years in which they are resolved.

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 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 November 15, 2023. The Plaintiff seeks damages in excess of $75 million. While the Company’s management does not believe these

3530

~~Compliance Matters~~

~~During the fourth quarter of 2019, an increase in mortgage originations~~allegations have merit, defending such allegations has resulted in ~~an increase~~and will likely continue to result in ~~title orders~~substantial costs and ~~loan settlements, creating personnel~~a diversion of management’s attention and operational pressures within the Company. The Company increased staffing, adjusted schedules, and enhanced processes, but still experienced constraints in order to meet settlement timelines. Specifically, there was an increase in the number of days between receipt of funds from the originating lender and disbursement of those funds to pay off those loan transactions. In 2019,resources. Because the Company ~~initiated a review~~believes this lawsuit is without merit it continues to ~~refund consumers for any overage~~vigorously defend against it. Discovery in per diem charges due to delays based on loan program and state property requirements. The Company established an accrual of $4.8 million as of December 31, 2019 for its estimate of the remaining refunds. As of January 2021, the Company had completed its review and processed refunds that totaled $4.2 million of which $3.9 million were completed throughout 2020 and the remaining $0.3 million in January 2021. As a result of this event and in order to prevent recurrence, the Company has decreased the number of states in which they accept orders in order to manage pipelines and routinely review key performance indicators along with pipeline estimates from their customers.

~~Regulatory Requirements~~

~~The Company~~matter 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, 2021, the Company was in compliance with its selling and servicing capital requirements.still ongoing.

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, 2021~~September 30, 2023 and December 31, ~~2020~~2022 approximated ~~$24.5~~$3.0 billion and ~~$31.5~~$2.2 billion, respectively. These loan commitments are treated as derivatives and are carried at fair value, refer to Note 7-5- Derivative Financial Instruments and Hedging Activities for further information on derivatives.

Loan ~~Repurchase Reserve~~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’s whole~~Company establishes a loan ~~sale agreements generally require it to~~ repurchase ~~loans~~reserve for losses associated with repurchase loan obligations if the Company breached a representation or warranty given to the loan purchaser. Additionally, the ~~Company has repurchase obligations for personal loans facilitated through its banking relationship in the case where personal identification fraud is discovered at the inception of the loan.~~

~~The~~ Company’s loan ~~repurchase reserve~~loss obligation for sold loans ~~is reflected in accounts payable~~includes an estimate for losses associated with early payoffs and ~~accrued expenses.~~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 and nine months ended ~~March 31, 2021~~September 30, 2023 and ~~2020.~~

2022.

The activity related to the loan loss obligation for sold loans is as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Balance at beginning of period	$	53,467	$	85,873	$	70,797	$	29,877
(Recovery) provision for loan loss obligations	(2,198)		12,932		9,952		108,550
Charge-offs	(7,534)		(29,879)		(37,014)		(69,501)
Balance at end of period	$	43,735	$	68,926	$	43,735	$	68,926

Three Months Ended
March 31,
2021 2020
Balance at beginning of period $ 33,591 $ 17,677
Provision for loan losses 800 9,730
Payments, realized losses and other (4,339) (1,678)
Balance at end of period $ 30,052 $ 25,729
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 $0.6 million and $1.1 million as of September 30, 2023 and December 31, 2022, respectively

TRA Liability

~~The~~As part of the IPO and reorganization, the Company ~~has~~ entered into a TRA with Parthenon Stockholders and certain Continuing LLC Members, whereby loanDepot, Inc. will be obligated to pay such parties or their permitted assignees, 85% of the amount of cash tax savings, if any, in U.S. federal, state, and local taxes that loanDepot, Inc. realizes, or is deemed to realize as a result of future tax benefits from increases in tax basis. The TRA liability is accounted for as a contingent liability with

amounts accrued when deemed probable and estimable. The Company recognized a TRA liability of ~~$8.6~~$53.8 million and $50.7 million as of ~~March~~September 30, 2023 and December 31, ~~2021,~~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. The amounts payable under the TRA will vary depending on a number of factors, such as the amount and timing of taxable income attributable to loanDepot, Inc.

NOTE 1715 – REGULATORY CAPITAL AND LIQUIDITY REQUIREMENTS

The Company ~~through certain subsidiaries,~~ is ~~required~~subject 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~~including minimum capital and a liquidity ~~requirement equal to the greater of $1.0 million or 0.10% of outstanding Ginnie Mae single-family securities.~~

•requirements established by HUD, FHFA for Fannie Mae and Freddie ~~Mac.~~ ~~The eligibility~~Mac seller/servicers, and Ginnie Mae for single family issuers. Failure to maintain minimum capital and liquidity 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~~can result in FHFA and ~~a liquidity requirement equal to 0.35% 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 $1,000,000 plus 1% of the total volume in excess of $25,000,000 of FHA Single Family Mortgages originated, underwritten, serviced, and/or purchased during the prior fiscal year,Ginnie Mae taking various remedial actions up to ~~a maximum required adjusted net worth~~and including removing the Company's ability to sell loans to, or securitize loans with, and service loans on behalf of ~~$2,500,000.~~

•~~Fannie Mae, Freddie Mac~~FHFA 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 ~~$103.8~~$401.0 million as of ~~March 31, 2021.~~September 30, 2023. As of ~~March 31, 2021,~~September 30, 2023, the Company was in compliance with ~~the net worth,~~its regulatory capital and liquidity ~~and other financial requirements of its selling and servicing~~ requirements.

~~NOTE 18 – SUBSEQUENT EVENTS~~

~~Special Dividend~~

On April 21, 2021, the Company declared a special cash dividend on its Class A common stock and Class D common stock. LD Holdings declared a simultaneous special cash dividend on its units. The aggregate amount of the special dividend to be paid by the Company and distribution to be made by LD Holdings is $200.0 million, or $0.612 per share or $0.615 per unit, as applicable (the “Special Dividend”). The Special Dividend will be paid on May 18, 2021 to the Company’s stockholders and LD Holdings’ members of record as of the close of business on May 3, 2021.

~~Mello Warehouse Securitization Trust 2021-2~~

On April 23, 2021, Mello Warehouse Securitization Trust 2021-2 (the “Trust”) and LDLLC as servicer, both subsidiaries of the Company, entered into an indenture (the “Indenture”) with U.S. Bank National Association, as indenture trustee, note calculation agent, standby servicer and initial securities intermediary. Pursuant to the Indenture, the Trust issued $500.0 million of notes (the “MWST Notes”). The MWST Notes are backed by a revolving warehouse line of credit, secured by newly originated, first-lien, fixed rate or adjustable rate, residential mortgage loans which are originated in accordance with the criteria of Fannie Mae or 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 and other eligibility criteria set forth in the Master Repurchase Agreement, dated as of April 23, 2021 between LDLLC as seller and the Trust, as buyer (the “MRA”). LDLLC's obligations under the MRA are guaranteed by the Issuer under a separate guaranty in favor of the Trust, dated as of April 23, 2021 (the “Guaranty”). Each class of MWST Notes bears interest at 30-day LIBOR plus the applicable margin as defined in the Indenture. The MWST Notes will terminate on the earlier of (i) the three-year anniversary of the initial purchase date, (ii) loanDepot.com, LLC exercising its right to optional prepayment in full or (iii) an event of default which results in the acceleration of the obligations under the Indenture.

3832

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion ~~and~~provides an analysis of ~~our~~the Company's financial condition, cash flows and results of operations from management's perspective and should be read in conjunction with our consolidated financial statements and the accompanying notes included under Part I. Item 1 of this report. The results of operations described below are not necessarily indicative of the results to be expected for any future periods. This discussion includes forward-looking information that involves risks and assumptions which could cause actual results to differ materially from management’s expectations. See our cautionary language at the beginning of this report under “Special Note Regarding Forward-Looking Statements” and for a more complete discussion of the factors that could affect our future results refer to Part ~~II. “Item 1A. Risk Factors” and elsewhere in this Form 10-Q and Part~~ I, Item 1A "Risk Factors" and Part II, Item 7 “Management's Discussion and Analysis of Financial Condition and Results of Operations” in our ~~2020~~2022 Form 10-K. Capitalized terms used but not otherwise defined herein have the meanings set forth in the our Form 10-K.

Overview

~~loanDepot is~~We are a customer-centric, ~~and technology-enabled~~technology-empowered residential mortgage platform. ~~We launched our business in 2010~~Our goal is to ~~provide mortgage loan solutions to~~be the lender of choice for consumers ~~who were dissatisfied with~~and the ~~services offered~~employer of choice by ~~banks~~being a company that operates on sound principles of exceptional value, ethics, and ~~other traditional market participants.~~transparency. Since our inception, we have significantly expanded our origination platform ~~both in terms of size and capabilities.~~as well as developed an in-house servicing platform. Our primary sources of revenue are derived from the origination of conventional and government mortgage loans, servicing conventional and government mortgage loans, and providing ~~a growing suite of~~ ancillary services.

The Company's common stock began trading on The New York Stock Exchange on February 11, 2021 under the ticker symbol "LDI." This initial public offering consisted of 3,850,000 shares of Class A common stock, $0.001 par value per share, at an offering price of $14.00 per share, pursuant to a Registration Statement on Form S-1.

~~A summary of our critical accounting policies and estimates is included in~~ ~~Critical Accounting Policies and Estimates.~~

Key Factors Influencing Our Results of Operations

Market and Economic Environment

According to the Federal Reserve, residential mortgages represent the largest segment of the broader United States consumer finance market. In 2020, annual one-to-four family residential mortgage origination volume reached $3.8 trillion, with an average volume of $2.3 trillion over the last five years. According to the Mortgage Bankers Association, there was approximately $11.3 trillion of residential mortgage debt outstanding in the United States as of March 31, 2021 that is forecasted to increase to $12.4 trillion by the end of 2022.

The consumer lending market and the associated loan origination volumes for mortgage loans are influenced by ~~interest rates and~~ economic conditions. While borrower demand for consumer credit has typically remained strong in most economic environments, general market conditions, including the interest rate environment, unemployment rates, home price appreciation and consumer confidence may affect borrower willingness to seek financing and investor desire and ability to invest in loans. For example, a significant interest rate increase or rise in unemployment could cause potential borrowers to defer seeking financing as they wait for interest rates to stabilize or the general economic environment to improve. Additionally, if the economy weakens and actual or expected default rates increase, loan investors may postpone or reduce their investments in loan products.

The volume of mortgage loan originations associated with home purchases is generally less affected by interest rate fluctuations and more sensitive to broader economic factors as well as the overall strength of the economy and housing prices. Purchase mortgage loan origination volume can be subject to seasonal trends as home sales typically rise during the spring and summer seasons and decline in the fall and winter seasons. This is somewhat offset by purchase loan originations sourced from our joint ventures which typically experience their highest level of activity during November and December as home builders focus on completing and selling homes prior to year-end. Seasonality has less of an impact on mortgage loan refinancing volumes, which are primarily driven by fluctuations in mortgage loan interest rates.

~~Impact of the COVID-19 Pandemic~~

~~The financial markets demonstrated significant volatility due to the economic impacts of COVID-19 as~~Increases in interest rates ~~fell~~may affect affordability and the ability for potential home buyers to ~~historic lows~~qualify for a mortgage loan. As interest rates increase, rate and term refinancings become less attractive to consumers. However, rising interest rates during ~~2020 which resulted~~periods of inflationary pressures can make real assets, including real estate, an attractive investment. Demand for real estate may result in increased mortgage refinance originations and favorable margins during 2020. Our efficient and scalable platform has enabled us to respond quickly to the increased market demand. We have highlighted below the key steps we have undertaken since the onset of the pandemic to position our platformongoing support for ~~continued success:~~

•~~Maintained higher liquidity levels from an increase in cash from retained earnings.~~

•~~Increased our total loan funding capacity with our current lending partners.~~

•~~Stepped up protocols related to verification of key metrics such as employment and income to ensure the highest quality underwriting standards are maintained.~~

•~~Transitioned our workforce to working remotely as of March 19, 2020.~~

~~As a servicer, we are required to advance principal and interest to the investor for up to four months on GSE backed~~purchase mortgages and ~~longer on other government agency backed mortgages on behalf of clients who have entered a forbearance plan. As of March 31, 2021, approximately 1.4%,~~home price appreciation creating borrower equity that could result in opportunities for cash-out refinancings or $1.9 billion UPB, of our servicing portfolio was in active forbearance. While these advance requirements may be significant at higher levels of forbearance, we believe we are very well-positioned in terms of our liquidity. We will continue evaluating the capital markets as well, which would further supplement our liquidity should the need arise.home equity loans.

~~Fluctuations in~~ Interest Rates

Our mortgage loan refinancing volumes (and to a lesser degree, our purchase volumes), balance ~~sheet~~sheets, and results of operations are influenced by changes in interest rates and how we effectively manage the related interest rate risk. As interest rates decline, mortgage loan refinance volumes tend to increase, while an increasing interest rate environment may cause a decrease in refinance volumes and purchase volumes. In addition, theThe majority of our assets are subject to interest rate risk, including LHFS, ~~which consist of mortgage loans held on our consolidated balance sheet for a short period of time after origination until we are able to sell them,~~ IRLCs, servicing rights and mandatory trades, forward sales contracts, interest rate swap futures and put ~~options that we enter into to manage interest rate risk created by IRLCs and uncommitted LHFS.~~options. We refer to such mandatory trades, forward sales contracts, interest rate swap futures and put options collectively as “Hedging Instruments.” As interest rates increase, our LHFS and IRLCs generally decrease in value while our Hedging Instruments utilized to hedge against interest rate risk typically increase in value. Rising interest rates cause our expected mortgage loan servicing revenues to increase due to a decline in mortgage loan prepayments which extends the average life of our servicing portfolio and increases the value of our servicing rights. Conversely, as interest rates ~~decline,~~decrease, our LHFS and IRLCs generally increase in value while our Hedging Instruments decrease in value. In a

declining interest rate environment, borrowers tend to refinance their mortgage loans, which increases prepayment speed and causes ~~our~~ expected mortgage loan servicing revenues to decrease, which reduces the average life of our servicing portfolio and decreases the value of our servicing rights. ~~The changes~~Changes in fair value of our servicing rights are recorded as unrealized gains and losses in changes in fair value of servicing rights, net, in our consolidated statements of operations.

Current Market Conditions

~~When~~In July 2023, the Federal Reserve raised the Federal Funds rate by another 0.25 percentage points for a total increase of 5.25 percentage points since the beginning of 2022. The resulting increase in mortgage interest rates ~~rise, rate~~has impacted mortgage origination volumes. According to MBA’s Mortgage Finance Forecast published October 15, 2023, annual one-to-four family residential mortgage origination for 2023 are expected to decrease by 29% on a year-over-year basis to $1.6 trillion and ~~term refinancings become less attractive~~increase by 19% in 2024 to ~~consumers after~~$1.9 trillion.

In July 2022, we announced our Vision 2025 plan. The plan’s four primary elements include: 1) Increase focus on purchase transactions while serving increasingly diverse communities across the country; 2) Execute previously announced growth-generating initiatives; 3) Centralize management of loan originations and loan fulfillment to enhance quality and effectiveness; and 4) Aggressively rightsize our cost structure. During the second half of 2022, we consolidated our retail and corporate locations and completed the exit of our wholesale business. During the first quarter of 2023, we transitioned our servicing portfolio to an in-house platform, reducing servicing expenses, expanded our offerings on the digital HELOC platform, and forged a ~~historically long period~~new partnership with Habitat for Humanity, supporting their mission to improve housing. In the second and third quarters of ~~low interest rates. However, rising interest rates are also indicative of overall economic growth~~2023, we further streamlined our leadership structure and inflation that should create more opportunities with respect to cash-out refinancings. In addition, inflation which may result from increases in asset prices and stronger economic growth (leading to higher consumer confidence) typically should generate more purchase-focused transactions requiring loans and greater opportunities for home equity loans, which we expect may offset, at least in part, any decline in rate and term refinancings in a rising interest rate environment.integrated our digital platform into existing product channels.

Key Performance Indicators

We manage and assess the performance of our business by evaluating a variety of metrics. Selected key performance metrics include loan originations and sales and servicing metrics.

Loan Origination and Sales

Loan originations and sales by volume and units are a measure of how successful we are at growing sales of mortgage loan products and a metric used by management in an attempt to isolate how effectively we are performing. We believe that

originations and sales are an indicator of our market penetration in mortgage loans and that this provides useful information because it allows investors to better assess the ~~underlying growth rate~~strength of our core business. Loan originations and sales include brokered loan originations not funded by ~~the Company.~~us. We enter into IRLCs to originate loans, at specified interest rates, with customers who have applied for a mortgage and meet certain credit and underwriting criteria. We believe the volume of our IRLCs is another measure of our ~~growth in originations.~~overall market share.

Gain on sale margin represents the ~~sum~~total of (i) gain on ~~sale~~origination and ~~origination~~sale of loans, net, and (ii) origination income, net, divided by ~~total~~ loan ~~originations for the~~origination volume during period.

Pull through weighted gain on sale margin represents the total of (i) gain on origination and sale of loans, net, and (ii) origination income, net, divided by the pull through weighted rate lock volume. Pull through weighted rate lock volume is the ~~unpaid~~ principal balance of loans subject to interest rate lock commitments, net of a pull-through factor for the loan funding probability.

Servicing Metrics

Servicing metrics include the unpaid principal balance of our servicing portfolio and servicing portfolio units, which represent the number of mortgage loan customers we service. We believe that the net additions to our portfolio and number of units are indicators of the growth of our mortgage loans serviced and our servicing income, but may be offset by sales ~~from time to time,~~ of servicing rights.

Three Months Ended
March 31,
(Dollars in thousands) 2021 2020
Financial statement data
Total revenue $ 1,316,008 $ 486,121
Total expenses 869,878 397,125
Net income 427,853 88,996
Earnings per share of Class A and Class D common stock:
Basic $ 0.36 N/A
Diluted $ 0.36 N/A
Non-GAAP financial measures(1)
Adjusted total revenue $ 1,241,256 $ 500,240
Adjusted net income 319,391 78,599
Adjusted EBITDA 457,913 126,184
Adjusted Diluted EPS 0.98 N/A
Loan origination and sales
Loan originations by channel:
Retail $ 33,427,789 $ 11,677,343
Partner 8,051,362 3,498,244
Total $ 41,479,151 $ 15,175,587
Loan originations by purpose:
Purchase $ 7,916,512 $ 4,393,856
Refinance 33,562,639 10,781,731
Total $ 41,479,151 $ 15,175,587
Loan originations (units) 111,400 50,459

4134


		Three Months Ended March 31,						Three Months Ended September 30,					Nine Months Ended September 30,
(Dollars in thousands)	(Dollars in thousands)	2021			2020				(Dollars in thousands)	2023			2022			2023			2022
Licensed loan officers:
Retail		2,568			2,127
Partner		239			201
Total		2,807			2,328

IRLCs									IRLCs	$	8,295,935		$	12,032,026		$	25,738,036		$	61,620,241
IRLCs (units)									IRLCs (units)	26,888			38,569			83,916			188,444
Pull through weighted lock volume									Pull through weighted lock volume	$	5,685,209		$	8,755,082		$	17,067,876		$	40,968,021
Pull through weighted gain on sale margin									Pull through weighted gain on sale margin	2.93			2.03			2.69			1.92
Loan originations by purpose:									Loan originations by purpose:
Purchase									Purchase	$	4,337,476		$	6,938,408		$	12,403,166		$	24,469,338
Refinance									Refinance	1,745,667			2,911,519			4,897,857			22,926,375
Total loan originations									Total loan originations	$	6,083,143		$	9,849,927		$	17,301,023		$	47,395,713
Gain on sale margin									Gain on sale margin	2.74		%	1.80		%	2.66		%	1.66		%
Loan originations (units)									Loan originations (units)	20,593			29,795			58,188			142,057
Licensed loan officers									Licensed loan officers	1,598			2,319			1,598			2,319
Loans sold:	Loans sold:								Loans sold:
Servicing retained	Servicing retained	$	37,435,791		$	8,831,907			Servicing retained	$	4,175,126		$	6,604,979		$	11,396,678		$	34,296,344
Servicing released	Servicing released	2,492,886			6,439,801				Servicing released	2,092,762			5,132,350			6,345,660			18,220,561
Total		$	39,928,677		$	15,271,708
Total loans sold									Total loans sold	$	6,267,888		$	11,737,329		$	17,742,338		$	52,516,905
Loans sold (units)	Loans sold (units)	108,687			50,589				Loans sold (units)	21,188			34,613			58,976			154,624

Gain on sale margin		2.71		%	3.50		%
Gain on sale margin - retail		3.25			3.67
Gain on sale margin - partner		1.85			1.42

Pull through weighted gain on sale margin		3.35			2.99

IRLCs		$	45,762,661		$	27,037,271
IRLCs (units)		131,551			87,757

Servicing metrics	Servicing metrics								Servicing metrics
Total servicing portfolio (unpaid principal balance)	Total servicing portfolio (unpaid principal balance)	$	129,709,892		$	42,445,155			Total servicing portfolio (unpaid principal balance)	$	143,959,705		$	139,709,633		$	143,959,705		$	139,709,633
Total servicing portfolio (units)	Total servicing portfolio (units)	414,540			168,320				Total servicing portfolio (units)	490,191			463,471			490,191			463,471
60+ days delinquent ($)		$	2,125,573		$	425,407
60+ days delinquent ($)(1)									60+ days delinquent ($)(1)	$	1,235,443		$	1,365,774		$	1,235,443		$	1,365,774
60+ days delinquent (%)	60+ days delinquent (%)	1.64		%	1.00		%		60+ days delinquent (%)	0.86		%	0.98		%	0.86		%	0.98		%
Servicing rights at fair value, net(2)	Servicing rights at fair value, net(2)	$	1,766,088		$	431,864			Servicing rights at fair value, net(2)	$	2,038,654		$	2,013,269		$	2,038,654		$	2,013,269
Weighted average servicing fee		0.30		%	0.34		%
Multiple(3)		4.7			3.9
Weighted average servicing fee (3)									Weighted average servicing fee (3)	0.29		%	0.29		%	0.29		%	0.29		%
Multiple(3) (4)									Multiple(3) (4)	5.2			5.2			5.2			5.2

(1)~~Refer~~The UPB of loans that are 60 or more days past due as of September 30, 2023, according to the ~~section titled “Non-GAAP Financial Measures” for a discussion and reconciliation of our Non-GAAP financial measures.~~contractual due date, or are in foreclosure.

(2)Amount represents the fair value of servicing rights, net of servicing liabilities, which are included in accounts payable, accrued expenses, and other liabilities in the consolidated balance ~~sheet.~~sheets.

(3)Agency only.

(4)Amounts represent the fair value of servicing rights, net, divided by the weighted average annualized servicing fee.

Results of Operations

~~Description of Components of Results of Operations~~

~~Our primary sources of revenue include gain on~~The following table sets forth our consolidated financial statement data for the ~~origination and sale of loans, loan origination income, and servicing fee income. Changes in~~three months ended September 30, 2023 compared to the fair value of our LHFS, servicing rights, and derivatives also impact our revenues. Other income reflects the pro rata share of net earnings from our joint ventures and fee income from title, escrow, and settlementthree months ended September 30, 2022.

4235

~~services performed~~


	Three Months Ended September 30,				Change $	Change %
(Dollars in thousands)	2023		2022
	(Unaudited)



REVENUES:


Net interest income	$	2,611	$	9,794			$	(7,183)	(73.3)	%
Gain on origination and sale of loans, net	148,849		156,300				(7,451)		(4.8)
Origination income, net	17,740		21,268				(3,528)		(16.6)
Servicing fee income	118,783		113,544				5,239		4.6
Change in fair value of servicing rights, net	(35,688)		(38,479)				2,791		7.3
Other income	13,366		11,765				1,601		13.6
Total net revenues	265,661		274,192				(8,531)		(3.1)


EXPENSES:
Personnel expense	141,432		218,819				(77,387)		(35.4)
Marketing and advertising expense	33,894		42,940				(9,046)		(21.1)
Direct origination expense	15,749		19,463				(3,714)		(19.1)
General and administrative expense	46,522		83,412				(36,890)		(44.2)
Occupancy expense	5,903		9,889				(3,986)		(40.3)
Depreciation and amortization	10,592		10,243				349		3.4
Servicing expense	8,532		14,221				(5,689)		(40.0)
Other interest expense	42,504		36,138				6,366		17.6

Total expenses	305,128		435,125				(129,997)		(29.9)

Loss before income taxes	(39,467)		(160,933)				121,466		75.5

Income tax benefit	(5,205)		(23,451)				18,246		77.8

Net loss	(34,262)		(137,482)				103,220		75.1

Net loss attributable to noncontrolling interests	(17,663)		(77,401)				59,738		77.2

Net loss attributable to loanDepot, Inc.	$	(16,599)	$	(60,081)			$	43,482	(72.4)

The decrease in net loss of $103.2 million was primarily due to a $130.0 million decrease in total expenses. This decline was driven by a combination of volume-related declines and optimization efforts aligned with our ~~consolidated subsidiary, LDSS.~~ Vision 2025 Plan. The $8.5 million decrease in total net revenues was caused by reduced mortgage origination volume due to declining demand from rising interest rates in 2022 and throughout 2023. Additionally, net interest income declined due to higher cost of funds relative to interest income on LHFS, and lower average balances. However, servicing fee income rose due to an increase in ancillary income from higher interest rates and a higher average UPB in our servicing portfolio.

Revenues

Net Interest Income. Net interest income ~~is interest~~represents the income earned on ~~our~~ LHFS, ~~net of~~offset by interest ~~expense~~expenses on amounts borrowed under warehouse and other lines of credit to finance ~~such~~these loans until they are sold.

Our ~~primary expenses include those for personnel, marketing~~LHFS are generally tied to longer-term interest rates while our warehouse lines of credit are tied to short-term interest rates. Therefore our net interest income is impacted by the term structure of market interest rates. The decrease in net interest income was due to higher cost of funds, partially offset by lower average balances of warehouse lines. The average cost of warehouse lines increased by 342 basis points, while the average yield on LHFS increased 111 basis points. The average balance on warehouse lines decreased by $1.5 billion, and ~~advertising, direct origination, subservicing fees paid to subservicers~~the average balance of ~~our MSR portfolio, and other general and administrative expenses such as professional fees, data processing, and communication expenses.~~

~~The following table sets forth our consolidated results of operations for the periods indicated:~~

Three Months Ended
March 31, Change
$ Change
%
(Dollars in thousands) 2021 2020
(Unaudited)
REVENUES:
Net interest income (expense) $ 1,233 $ 2,360 $ (1,127) (47.8) %
Gain on origination and sale of loans, net 1,020,646 492,485 528,161 107.2
Origination income, net 101,599 38,613 62,986 163.1
Servicing income 82,568 36,563 46,005 125.8
Change in fair value of servicing rights, net 69,294 (100,287) 169,581 (169.1)
Other income 40,668 16,387 24,281 148.2
Total net revenues 1,316,008 486,121 829,887 170.7
EXPENSES:
Personnel expense 603,735 240,199 363,536 151.3
Marketing and advertising expense 109,626 57,312 52,314 91.3
Direct origination expense 46,976 26,503 20,473 77.2
General and administrative expense 51,317 29,630 21,687 73.2
Occupancy expense 9,988 9,892 96 1.0
Depreciation and amortization 8,454 9,372 (918) (9.8)
Subservicing expense 26,611 13,247 13,364 100.9
Other interest expense 13,171 10,970 2,201 20.1
Total expenses 869,878 397,125 472,753 119.0
Income before income taxes 446,130 88,996 357,134 401.3
Provision for income taxes 18,277 — 18,277 n/m
Net income 427,853 88,996 338,857 380.8
Net income attributable to noncontrolling interests 382,978 88,996 293,982 330.3
Net income attributable to loanDepot, Inc. $ 44,875 $ — $ 44,875 n/m

LHFS decreased $1.4 billion.

4336

~~Three Months Ended March 31, 2021 Compared to Three Months Ended March 31, 2020~~

Net income was $427.9 million for the three months ended March 31, 2021, an increase of $338.9 million, compared to a net income of $89.0 million for the three months ended March 31, 2020. Total originations were $41.5 billion for the three months ended March 31, 2021, as compared to $15.2 billion for the three months ended March 31, 2020, representing an increase of $26.3 billion or 173.3%. Of the total originations for the three months ended March 31, 2021, our Retail and Partner Channels originated $33.4 billion and $8.1 billion, respectively, as compared to $11.7 billion and $3.5 billion, respectively, for the three months ended March 31, 2020. We generated additional revenue and net income growth related to increased IRLCs and mortgage loan originations across all business channels. Our operating results were positively influenced by an attractive mortgage loan origination market during the three months ended March 31, 2021 during which interest rates remained low as a result of the COVID-19 global pandemic. The low interest rate environment resulted in an increase in IRLCs and mortgage loan origination volumes from the comparable 2020 period.

~~Revenues~~

Gain on Origination and Sale of Loans, Net. Gain on origination and sale of loans, net, was ~~$1.0 billion for~~comprised of the ~~three months ended March 31, 2021, as compared to $492.5 million for the three months ended March 31, 2020, representing an increase of $528.2 million or 107.2%.~~ following:



	Three Months Ended September 30,				Change $		Change %
(Dollars in thousands)	2023		2022
Discount from loan sales	$	(64,973)	$	(83,312)	$	18,339	22.0	%
Fair value of servicing rights additions	80,068		124,244		(44,176)		(35.6)
Fair value losses on IRLC and LHFS	(39,162)		(203,519)		164,357		80.8
Fair value gains from Hedging Instruments	86,946		274,185		(187,239)		(68.3)

Discount points, rebates and lender paid costs	83,772		57,634		26,138		45.4

Recovery of (provision for) loan loss obligation for loans sold	2,198		(12,932)		15,130		117.0
Total gain on origination and sale of loans, net	$	148,849	$	156,300	$	(7,451)	(4.8)

Gain on origination and sale of loans, net ~~was comprised~~includes several key components. The estimated change in value of a loan from the time we enter into a commitment to lend to the borrower (IRLC) to the closing of the ~~following components:~~loan (LHFS) up until its eventual sale is recorded in “Fair value gains or losses on IRLC and LHFS.” Various factors, such as mortgage volume, the duration a loan remains at stages in the origination process, and shifts in interest rates, influence fair value changes on IRLC and LHFS. We utilize a hedge strategy to manage the impact of interest rate changes in IRLC and LHFS, "Fair value gains or losses from Hedging Instruments" represents the unrealized gains or losses on Hedging Instruments. When a loan is sold, the difference between proceeds received and the UPB is included in “Premium or discount from loan sales.” Additionally, “Discount points, rebates, and lender paid costs” are recognized at closing of the loan. The fair value of servicing rights retained on loan sales is included in “Fair value of servicing rights additions.” The "Provision for loan loss obligation for loans sold” is established to cover potential losses from a breach of representation or warranty made to purchasers or insurers of the sold loans.

Three Months Ended
March 31,
(Dollars in thousands) 2021 2020
Premium from loan sales $ 470,572 $ 376,829
Servicing rights 529,544 114,118
Unrealized (losses) gains from derivative assets and liabilities - IRLCs (400,268) 186,528
Unrealized gains (losses) from Hedging Instruments 609,654 (156,547)
Realized gains (losses) from Hedging Instruments 715,297 (210,908)
Discount points, rebates and lender paid costs (114,855) (18,871)
Mark to market (loss) gain on loans held for sale (178,844) 54,519
Provision for loan loss obligation for loans sold (800) (9,730)
$ 1,020,646 $ 492,485

~~Changes~~The $7.5 million or 4.8% decrease in ~~the components of~~ gain on origination and sale of loans, net ~~during the three months ended March 31, 2021 and 2020 were comprised of the following:~~

• $470.6 million in net premiums realized upon the sale of loans to investors for the three months ended March 31, 2021, as compared to $376.8 million for the three months ended March 31, 2020, representing an increase of $93.7 million or 24.9%. The increase in net premiums realized upon the sale of loans to investors was a result of the increased origination and sale volume between periods;

• $529.5 million in retained servicing rights from loans sold to investors on a servicing-retained basis for the three months ended March 31, 2021, as compared to $114.1 million for the three months ended March 31, 2020, representing an increase of $415.4 million or 364.0%, which was driven by ~~an increase in~~lower IRLC volume ~~of loans sold~~from

higher rates, partially offset by higher margins on a servicing-retained basis to $37.4 billion during the three months ended March 31, 2021, as compared to $8.8 billion for the three months ended March 31, 2020 and increases in estimated servicing multiples and servicing fees between periods;

• $400.3 million of unrealized losses from IRLCs for the three months ended March 31, 2021, as compared to $186.5 million of unrealized gains for the three months ended March 31, 2020, representing a decrease of $586.8 million or 314.6%.that volume. The decrease was primarily due to rising interest rates that reduced the value of IRLCs as well as increased funding volume during the three months ended March 31, 2021, as compared to a decline in interest rates that increased the value of IRLCs during the three months ended March 31, 2020;

• $1.3 billion of realized and unrealized gains from Hedging Instruments for the three months ended March 31, 2021, as compared to $367.5 million of realized and unrealized losses for the three months ended March 31, 2020. The increase in realized and unrealized gains was primarily due to the increases in interest rates during the first quarter of 2021 that resulted in an increase in the value of our Hedging Instruments along with increased notional amounts for Hedging Instruments from increased origination volumes during the three months ended March 31, 2021 as compared to the three months ended March 31, 2020;

• $114.9 million of rebates paid to borrowers and lender paid costs, net of discount points collected from borrowers for the origination of loans for the three months ended March 31, 2021, as compared to $18.9 million for the three months ended March 31, 2020, representing an increase of $96.0 million or 508.6%. The increase is related to the increase in origination volumes between periods;

• $178.8 million of fair value losses on LHFS for the three months ended March 31, 2021, as compared to $54.5 million of fair value gains for the three months ended March 31, 2020. The increase is primarily attributable to increasing interest rates for the three months ended March 31, 2021, as compared to the three months ended March 31, 2020 coupled with a higher average balance of LHFS during the three months ended March 31, 2021 as compared to the three months ended March 31, 2020; and

• $0.8 million of provision for loan loss obligations recorded for loans sold during the three months ended March 31, 2021, as compared to $9.7 million for the three months ended March 31, 2020, representing a decrease of $8.9 million or 91.8%. The provisionrecovery for loan loss obligations for the ~~three months ended March 31, 2021 reflects an $8.0 million reversal due~~period is a result of fewer loans subject to ~~a decrease in~~ repurchase ~~requests~~ and ~~a decrease in severity~~partially mitigated the impact of losses for repurchased loans. The provision for loan loss obligations for the three months ended March 31, 2020 reflects an addition of $5.0 million for the COVID pandemic and decreased pricing on repurchased loans.other volume-related decreases.

Origination Income, Net. Origination income, net, ~~was $101.6 million~~reflects the fees that we earn, net of lender credits we pay, from originating loans. Origination income includes loan origination fees, processing fees, underwriting fees, and other fees collected from the borrower at the time of funding. Lender credits typically include rebates or concessions to borrowers for ~~the three months ended March 31, 2021, as compared to $38.6 million for the three months ended March 31, 2020, representing an increase of $63.0~~certain loan origination costs.The $3.5 million or ~~163.1%. The~~16.6% decrease in origination income was the result of a 38.2% decrease in loan origination volumes, partially offset by an increase in origination income ~~net, between periods was primarily~~from the ~~result~~launch of ~~an increase in loan origination and other loan fees attributable to the growth in loan origination volumes.~~our HELOC product.

Servicing Fee Income. Servicing fee income ~~was $82.6 million for~~reflects contractual servicing fees and ancillary and other fees (including late charges) related to the ~~three months ended March 31, 2021, as compared to $36.6 million for the three months ended March 31, 2020, representing an~~servicing of mortgage loans. The increase of ~~$46.0~~$5.2 million or ~~125.8%. The~~4.6% reflects higher ancillary income from the cash balances held on behalf of our customers due to higher interest rates and a $0.2 billion increase in ~~servicing fee income between periods was the result of an increase of$73.1 billion in the~~ average UPB of our servicing portfolio due to an increase in servicing-retained loan sales. Our average servicing portfolio increased to $112.3 billion for the three months ended March 31, 2021, as compared to $39.2 billion for the three months ended March 31, 2020.portfolio.

Change in Fair Value of Servicing Rights, Net. Change in fair value of servicing rights, net was a gain of $69.3 million for the three months ended March 31, 2021, as compared to a loss of $100.3 million for the three months ended March 31, 2020, representing an increase of $169.6 million or 169.1%. The change inincludes (i) fair value gains or losses net of Hedging Instrument gains or losses; (ii) collection/realization of cash flows, which includes principal amortization and prepayments; and (iii) realized gains or losses on the sales of servicing rights. The $2.8 million increase was driven by gains on the sale of servicing rights ~~net was the result~~ of ~~the increase in size~~$17.0 million and lower prepayments of ~~our servicing portfolio which contributed to:~~

~~• $187.5~~$11.0 million, partially offset by a decrease of $25.2 million in ~~unrealized~~ fair value gains, net of hedging ~~losses, on servicing rights for~~losses.

Expenses

Personnel Expense. Personnel expense includes salaries, commissions, incentive compensation, benefits, and other employee costs.The $77.4 million or 35.4% decrease in personnel expense included volume-related declines in commissions of $23.4 million. The remaining decrease of $54.0 million was attributable to lower salaries & benefits from the ~~three months ended March 31, 2021, as~~26.0% decrease in headcount related to previously announced cost savings initiatives. As of September 30, 2023, we had 4,532 employees compared to ~~losses~~6,121 employees as of $67.1 million, net of hedging gains for the three months ended March 31, 2020, primarily due to a decrease in prepayment speed assumptions resulting from increased interest rates during the three months ended March 31, 2021 compared to the declining rate environment for the three months ended March 31, 2020;

• $118.1 million in realized losses resulting from fallout and decay of the portfolio during the three months ended March 31, 2021 compared to $33.0 million for the three months ended March 31, 2020; and

• $0.1 million in realized losses on sales of servicing rights associated with the sale of $6.7 million in UPB during the three months ended March 31, 2021, as compared to a $0.1 million loss associated with the sale of $19.5 million in UPB during the three months ended March 31, 2020.

~~Other Income.~~ Other income was $40.7 million for the three months ended March 31, 2021, as compared to $16.4 million for the three months ended March 31, 2020, representing an increase of $24.3 million or 148.2%. The increase between periodsSeptember 30, 2022.

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~~was primarily the result of an increase of $24.2 million in escrow and title fee income due to increased mortgage loan settlement services.~~

~~Expenses~~

~~Personnel Expense.~~ Personnel expense was $603.7 million for the three months ended March 31, 2021, as compared to $240.2 million for the three months ended March 31, 2020, representing an increase of $363.5 million or 151.3%. The increase between periods was primarily the result of an increase of $174.9 million in commissions due to the increases in loan origination volumes, coupled with increases in salaries and benefits expense due to the increase in headcount associated with the growth of our lending operation to support the increased loan origination volumes. As of March 31, 2021, we had 11,037 employees, as compared to 6,932 employees as of March 31, 2020, representing a 59.2% year-over-year increase.

Marketing and Advertising Expense. Marketing and advertising expense was $109.6 million for the three months ended March 31, 2021, as compared to $57.3 million for the three months ended March 31, 2020, representing an increase of $52.3The $9.0 million or ~~91.3%. The increase between periods was primarily~~21.1% decrease in marketing expense reflects lower lead aggregators from a decline in the result of additional acquired leads, national television campaigns, and partnerships with Major League Baseball (MLB) and the Miami Marlins to increase brand awareness. During the three months ended March 31, 2021, loanDepot was named the presenting sponsor of the American and National League Championship Series and named the Official Mortgage Provider of both MLB and the Miami Marlins. The Company also secured exclusive naming rights for loanDepot park, the home of the Miami Marlins and world-class special events.total addressable market.

Direct Origination Expense. Direct origination expense ~~was $47.0 million for~~reflects the ~~three months ended March 31, 2021, as compared~~unreimbursed portion of direct out-of-pocket expenses that we incur in the loan origination process, including underwriting, appraisal, credit report, loan document and other expenses paid to ~~$26.5 million for the three months ended March 31, 2020, representing an increase of $20.5~~non-affiliates.The $3.7 million or ~~77.2%. The increase between periods~~19.1% decrease in direct origination expense was ~~directly attributable to increased costs for underwriting, credit reports, appraisals,~~the result of decreased loan ~~documents and other loan origination costs associated with increased loan origination volumes~~originations during the period.

General and Administrative Expense. General and administrative expense ~~was $51.3 million for the three months ended March 31, 2021, as compared to $29.6 million for the three months ended March 31, 2020, representing an increase of $21.7~~includes professional fees, data processing expense, communications expense, and other operating expenses. The $36.9 million or ~~73.2%. The increase between periods was primarily the result of~~44.2% decrease in general and administrative expense included a ~~$9.2~~$20.0 million ~~increase~~reduction in impairment and other real estate exit costs and a $9.7 million decrease in professional ~~services~~ and consulting a $4.8 million increase from IPO related expenses, and a $5.0 million increase in office and equipment expense related to data, communication, and software subscriptions associated with increases in personnel.services.

~~Subservicing~~Servicing Expense. ~~Subservicing expense was $26.6 million for~~In early 2023, we completed the ~~three months ended March 31, 2021, as compared to $13.2 million for the three months ended March 31, 2020, representing an increase~~transition of ~~$13.4 million or 100.9%. The increase between periods was the result of the $73.1 billion increase in~~ our ~~average~~ servicing portfolio to ~~$112.3 billion for the three months ended March 31, 2021, as compared~~our in-house platform. The decrease of $5.7 million or 40.0% in servicing expense reflects our shift to ~~$39.2 billion for the three months ended March 31, 2020.~~in-house servicing.

Other Interest Expense. ~~Other~~The $6.4 million or 17.6% increase in other interest expense was $13.2 million for the three months ended March 31, 2021, as compared to $11.0 million for the three months ended March 31, 2020, representing an increase of $2.2 million or 20.1%. The increase between periods was the result of ~~$363.2 million or 66.0% increase in average outstanding debt obligations, from a $1.1 billion increase in Senior Notes,~~higher rates on secured credit facilities, partially offset by a ~~$120.4~~$100.9 million decrease in ~~Secured Credit Facilities, a $250.0 million decrease from repayment of our Unsecured Term Loan,~~average balances and a ~~$75.0~~$1.7 million ~~decrease from repayment~~gain on extinguishment of ~~our Convertible Debt. The increase in average outstanding debt obligations were partially offset by decreases in 30-day LIBOR between periods.~~

~~Provision for Income Taxes.~~ Provision for income taxes was $18.3 million for the three months ended March 31, 2021, as compared to no provision for the three months ended March 31, 2020. Prior to the IPO, income taxes for LD Holdings at the consolidated level were primarily federal, state, and local taxes for ACT, a C Corporation. As part of the completion of the IPO, the Company became a C Corporation subject to federal, state, and local income taxes with respect to its share of net taxable income of LD Holdings.Senior Notes.

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Nine Months Ended September 30, 2023 Compared to Nine Months Ended September 30, 2022


	Nine Months Ended September 30,				Change $	Change %
(Dollars in thousands)	2023		2022
	(Unaudited)
REVENUES:


Net interest income	$	6,659	$	45,668			$	(39,009)	(85.4)	%
Gain on origination and sale of loans, net	411,336		665,993				(254,657)		(38.2)
Origination income, net	48,088		119,449				(71,361)		(59.7)
Servicing fee income	355,482		341,929				13,553		4.0
Change in fair value of servicing rights, net	(126,968)		(140,370)				13,402		9.5
Other income	50,798		53,472				(2,674)		(5.0)
Total net revenues	745,395		1,086,141				(340,746)		(31.4)


EXPENSES:
Personnel expense	440,258		861,382				(421,124)		(48.9)
Marketing and advertising expense	104,520		205,289				(100,769)		(49.1)
Direct origination expense	50,352		106,616				(56,264)		(52.8)
General and administrative expense	157,473		197,089				(39,616)		(20.1)
Occupancy expense	18,083		28,673				(10,590)		(36.9)
Depreciation and amortization	31,339		32,110				(771)		(2.4)
Servicing expense	19,116		46,472				(27,356)		(58.9)
Other interest expense	128,619		83,671				44,948		53.7
Goodwill impairment	—		40,736				(40,736)		NM
Total expenses	949,760		1,602,038				(652,278)		(40.7)
Loss before income taxes	(204,365)		(515,897)				311,532		60.4

Income tax benefit	(28,622)		(63,274)				34,652		54.8

Net loss	(175,743)		(452,623)				276,880		61.2

Net loss attributable to noncontrolling interests	(92,793)		(256,873)				164,080		63.9

Net loss attributable to loanDepot, Inc.	$	(82,950)	$	(195,750)			$	112,800	(57.6)

~~Financial Condition~~

The decrease of $276.9 million, or 61.2% in net loss was primarily due to a $652.3 million decrease in total expenses, partially offset by a $340.7 million decrease in total net revenue. The decline in revenue was driven by the impact of the increased interest rate environment, leading to a decrease in the volume of IRLCs and mortgage loan originations compared to the same period in 2022. The decline in total expense included efforts associated with our Vision 2025 plan, as well as volume-driven declines related to mortgage loan originations.

~~March 31, 2021~~Revenues

Net Interest Income. The decrease in net interest income was predominately driven by higher cost of funds, resulting from increased market rates, partially offset by higher yield on LHFS. The average cost of warehouse lines increased 433 basis points while the average yield on LHFS increased 217 basis points.

Gain on Origination and Sale of Loans, Net. Gain on origination and sale of loans, net was comprised of the following components:



	Nine Months Ended September 30,				Change $		Change %
(Dollars in thousands)	2023		2022
Discount from loan sales	$	(108,289)	$	(756,602)	$	648,313	85.7	%
Fair value of servicing rights additions	215,229		574,459		(359,230)		(62.5)
Fair value gains (losses) on IRLC and LHFS	10,725		(501,053)		511,778		102.1
Fair value gains from Hedging Instruments	81,291		1,268,271		(1,186,980)		(93.6)

Discount points, rebates and lender paid costs	222,332		189,468		32,864		17.3

Provision for loan loss obligation for loans sold	(9,952)		(108,550)		98,598		90.8
	$	411,336	$	665,993	$	(254,657)	(38.2)

The decrease in gain on origination and sale of loans, net reflects higher market rates during the nine months ended September 30, 2023 leading to reduced loan origination volumes, partially offset by higher margins on that volume and increased discount points. The reduced provision for loan loss obligations on loan sold is a result of fewer loans subject to repurchase, partially offset by lower market values for those loans.

Origination Income, Net. The decrease in origination income, net, of $71.4 million or 59.7% is consistent with the decrease in loan origination volumes.

Servicing Fee Income. The $13.6 million or 4.0% increase was the result of higher ancillary income from the increase in interest rates, partially offset by lower volume from the decrease of$9.1 billion in the average UPB of our servicing portfolio.

Change in Fair Value of Servicing Rights, Net. The increase of $13.4 million reflects a $78.2 million decrease in prepayments due to the rate environment and a $16.6 million increase in gain on sale of servicing rights, partially offset by an $81.5 million decrease in fair value gains, net of hedging losses.

Expenses

Personnel Expense. The decrease of $421.1 million reflects a $182.3 million decrease in commissions due to the decrease in loan originations and a $234.5 million decrease in salaries and benefits due to the 26.0% decrease in headcount.

Marketing and Advertising Expense. The decrease of $100.8 million or 49.1% reflects a reduction in purchased leads and direct mail.

Direct Origination Expense. The $56.3 million or 52.8% decrease in direct origination expense was the result of decreased loan originations during the period.

General and Administrative Expense. The $39.6 million or 20.1% decrease in general and administrative expense included a $24.6 million decrease in impairment and other real estate exit costs and a $6.1 million decrease in professional and consulting services.

Servicing Expense. The decrease of $27.4 million or 58.9% between periods reflects our shift to in-house servicing.

Other Interest Expense. The $44.9 million or 53.7% increase in other interest expense was the result of a $16.4 million increase in average balances, higher rates on secured credit facilities, and an $8.8 million decrease in gain on extinguishment of Senior Notes.

Goodwill Impairment. During the nine months ended September 30, 2022, there was $40.7 million of impairment recognized on goodwill. There was no similar activity for the nine months ended September 30, 2023.

Income Tax Expense (Benefit). The decrease in benefit for income taxes of $34.7 million reflects lower net losses, partially offset by non-deductible impairment of goodwill and other intangible assets for the nine months ended September 30, 2022.

Balance Sheet Highlights

September 30, 2023 Compared to December 31, ~~2020~~2022

The following table sets forth our consolidated balance ~~sheet~~sheets as of the dates indicated:


(Dollars in thousands)	September 30, 2023		December 31, 2022		Change $		Change %
	(Unaudited)
ASSETS
Cash and cash equivalents	$	717,196	$	863,956	$	(146,760)	(17.0)	%
Restricted cash	114,765		116,545		(1,780)		(1.5)
Accounts receivable, net	53,845		145,279		(91,434)		(62.9)
Loans held for sale, at fair value	2,070,748		2,373,427		(302,679)		(12.8)
Derivative assets, at fair value	86,622		39,411		47,211		119.8
Servicing rights, at fair value	2,053,359		2,037,447		15,912		0.8
Trading securities, at fair value	89,334		94,243		(4,909)		(5.2)
Property and equipment, net	76,762		92,889		(16,127)		(17.4)
Operating lease right-of-use assets	32,558		35,668		(3,110)		(8.7)
Prepaid expenses and other assets	124,756		155,982		(31,226)		(20.0)
Loans eligible for repurchase	639,806		634,677		5,129		0.8
Investments in joint ventures	18,778		20,410		(1,632)		(8.0)



Total assets	$	6,078,529	$	6,609,934	$	(531,405)	(8.0)

LIABILITIES & EQUITY
Warehouse and other lines of credit	$	1,897,859	$	2,146,602	$	(248,743)	(11.6)
Accounts payable, accrued expenses and other liabilities	462,521		488,696		(26,175)		(5.4)
Derivative liabilities, at fair value	49,742		67,492		(17,750)		(26.3)
Liability for loans eligible for repurchase	639,806		634,677		5,129		0.8
Operating lease liability	53,579		61,675		(8,096)		(13.1)
Debt obligations, net	2,206,087		2,289,319		(83,232)		(3.6)
Total liabilities	5,309,594		5,688,461		(378,867)		(6.7)
Total equity	768,935		921,473		(152,538)		(16.6)
Total liabilities and equity	$	6,078,529	$	6,609,934	$	(531,405)	(8.0)

(Dollars in thousands) March 31,
2021 December 31,
2020 Change
$ Change
%
(Unaudited)
ASSETS
Cash and cash equivalents $ 630,457 $ 284,224 $ 346,233 121.8 %
Restricted cash 121,389 204,465 (83,076) (40.6)
Accounts receivable, net 84,047 138,122 (54,075) (39.2)
Loans held for sale, at fair value 8,787,756 6,955,424 1,832,332 26.3
Derivative assets, at fair value 760,519 647,939 112,580 17.4
Servicing rights, at fair value 1,772,099 1,127,866 644,233 57.1
Property and equipment, net 91,007 85,002 6,005 7.1
Operating lease right-of-use asset 63,207 66,433 (3,226) (4.9)
Prepaid expenses and other assets 84,804 77,241 7,563 9.8
Loans eligible for repurchase 842,970 1,246,158 (403,188) (32.4)
Investments in joint ventures 17,332 17,528 (196) (1.1)
Goodwill and intangible assets, net 42,698 42,826 (128) (0.3)
Total assets $ 13,298,285 $ 10,893,228 $ 2,405,057 22.1
LIABILITIES & EQUITY
Warehouse and other lines of credit $ 8,309,450 $ 6,577,429 $ 1,732,021 26.3
Accounts payable, accrued expenses and other liabilities 890,826 446,370 444,456 99.6
Derivative liabilities, at fair value 95,188 168,169 (72,981) (43.4)
Operating lease liability 80,804 86,023 (403,188) (32.4)
Liability for loans eligible for repurchase 842,970 1,246,158 (5,219) (6.1)
Debt obligations, net 1,305,089 712,466 592,623 83.2
Total liabilities 11,524,327 9,236,615 2,287,712 24.8
Equity 1,773,958 1,656,613 117,345 7.1
Total liabilities and equity $ 13,298,285 $ 10,893,228 $ 2,405,057 22.1

~~Assets~~

Cash and Cash Equivalents. ~~Cash~~The$146.8 million or 17.0% decrease in cash and cash equivalents ~~were $630.5 million as~~relates to net losses for the year and repayment of March 31, 2021, as compared to $284.2 million as of December 31, 2020, representing an increase of $346.2 million or 121.8%. The increase between periods was primarily the result of net income generated in the three months ended March 31, 2021 from increased loan origination and sale volumes, net proceeds from warehouse borrowing and other lines of credit and debt ~~obligations, partially offset by dividends, and distributions.~~obligations.

~~Restricted Cash.~~ Restricted cash was $121.4 million as of March 31, 2021, as compared to $204.5 million as of December 31, 2020 representing a decrease of $83.1 million or 40.6%. The decrease between periods was primarily the result of decreases in restricted cash pledged as collateral for our warehouse lines.

~~Accounts Receivable, Net.~~ Accounts receivable, net, was $84.0 million as of March 31, 2021, as compared to $138.1 million as of December 31, 2020, representing a decrease of $54.1 million or 39.2%. The decrease between periods was primarily due to a decrease in margin call receivable.

Loans Held for Sale, at Fair Value. Loans held for sale, at fair value, ~~were $8.8 billion as of March 31, 2021, as compared~~are primarily fixed and variable rate, 15- to ~~$7.0 billion as of December 31, 2020, representing an increase of $1.8 billion~~30-year term first-lien loans that are secured by residential property. The $302.7 million or ~~26.3%. The increase during the three months ended March 31, 2021 was primarily the result of originations of loans totaling $41.5 billion, offset by $39.9~~12.8% decrease reflects $17.7 billion in ~~sales.~~

~~Derivative Assets, at Fair Value.~~ Derivative assets, at fair value, were $760.5 million as of March 31, 2021, as compared to $647.9 million as of December 31, 2020, representing an increase of $112.6 million or 17.4%. The increase between periods was primarily the result of a $441.7 million increase in Hedging Instruments entered into as a result of increased loan ~~commitments associated with the growth in our lending operation and increased interest rates during the first quarter of 2021,~~sales, partially offset by ~~a $335.6 million decrease~~$17.3 billion in ~~IRLCs. At March 31, 2021, derivative assets included IRLCs with fair values~~loan originations and ~~notional amounts of $311.8 million and $18.5 billion, respectively, compared to $647.3 million and $31.4 billion, respectively, at December 31, 2020.~~

~~Servicing Rights, at Fair Value.~~ ~~Servicing rights, at fair value, were $1.8 billion as of March 31, 2021, as compared to $1.1 billion as of December 31, 2020, representing~~ an increase ~~of $644.2 million or 57.1%. The increase between periods was primarily the result of $529.5 million~~ in ~~capitalized servicing rights from the sale of loans on a servicing retained basis, a $231.0 million increase in estimated~~ fair value due to a decrease in prepayment speed assumptions resulting from increased interest rates during the first quarter of 2021 compared to the fourth quarter of 2020, partially offset by a $0.7 milliondecrease in servicing rights from the sale of $6.7 million in UPB of servicing rights, and a $118.1 million decrease due to principal amortization and prepayments during the three months ended March 31, 2021.

~~Loans Eligible for Repurchase.~~ Loans eligible for repurchase were $0.8 billion as of March 31, 2021, as compared to $1.2 billion as of December 31, 2020, representing a decrease of $403.2 million or 32.4%. The decrease between periods was due to repurchases of Ginnie Mae serviced loans that were 90 days or more delinquent that totaled $472.5 million.

~~Liabilities and Equity~~

~~Warehouse and Other Lines of Credit.~~ Warehouse and other lines of credit were $8.3 billion as of March 31, 2021, as compared to $6.6 billion as of December 31, 2020, representing an increase of $1.7 billion or 26.3%. The increase between periods was primarily the result of loan originations outpacing sales by $1.6 billion during the three months ended March 31, 2021. For the three months ended March 31, 2021, we originated and sold $41.5 billion and $39.9 billion, respectively, in loans. Our borrowing capacity under our Warehouse Lines increased to $10.3 billion at March 31, 2021 from $8.1 billion at December 31, 2020.

~~Accounts Payable, Accrued Expenses and Other Liabilities~~. Accounts payable, accrued expenses and other liabilities were $890.8 million as of March 31, 2021, as compared to $446.4 million as of December 31, 2020, representing an increase of $444.5 million or 99.6%. The increase between periods was primarily the result of a $203.9 million deferred tax liability related to temporary differences in the book basis as compared to the tax basis of loanDepot, Inc.’s investment in LD Holdings as a result of the IPO and a $285.1 million increase in margin call payable.

~~Derivative Liabilities, at Fair Value.~~ ~~Derivative liabilities, at fair value, were $95.2 million as of March 31, 2021, as compared to $168.2 million as of December 31, 2020, representing a decrease of $73.0 million or 43.4%.~~The decrease reflects a decline in forward commitment liabilities due to the rising rate environment during the first quarter of 2021, partially offset by increases in interest rate lock liabilities and option future liabilities. At March 31, 2021, the notional value and fair value of forward loan sale commitments was $1.5 million and $2 thousand, compared to $54.4 billion and $163.6 million at December 31, 2020.

~~Liability for Loans Eligible for Repurchase.~~ Liability for loans eligible for repurchase was $0.8 billion as of March 31, 2021, as compared to $1.2 billion as of December 31, 2020, representing a decrease of $403.2 million or 32.4%. The decrease between periods was due to repurchases of Ginnie Mae serviced loans that were 90 days or more delinquent that totaled $472.5 million.

value.

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~~Debt Obligations.~~Servicing Rights, at Fair Value. ~~Debt obligations were $1.3 billion as of March 31, 2021, as compared to $712.5 million as of December 31, 2020, representing an increase of $592.6~~The $15.9 million or ~~83.2%. The~~0.8% increase ~~between periods was primarily due to the $600.0~~included $215.2 million of capitalized servicing rights from servicing-retained loan sales and a $73.4 million increase in fair value, partially offset by a $171.2 millionreductionfrom ~~issuance~~the sale of $164.7 million in UPB and $114.8 million from principal amortization and prepayments.

Warehouse and Other Lines of Credit. The decrease of$248.7 million or 11.6% is consistent with the ~~2028~~decrease in loans held for sale.

Debt Obligations, net. The decrease of $83.2 million or 3.6% included a decrease in secured credit facilities of $81.0 million and $5.4 million repurchase of Senior Notes.

Equity. Total equity was ~~$1.8 billion~~$768.9 million and ~~$1.7 billion at March 31, 2021~~$921.5 million as of September 30, 2023 and December 31, ~~2020,~~2022, respectively. The ~~$117.3 million or 7.1% increase reflects~~decrease was attributed to net ~~income~~loss of ~~$427.9~~$175.7 million and ~~stock based compensation~~the repurchase of ~~$59.5~~treasury shares, at cost of $2.3 million to net settle and withhold tax on vested RSUs, partially offset by ~~distributions totaling $166.6~~stock-based compensation of $15.6 million and ~~reductions~~an increase to additional paid in capital of ~~$203.7~~$7.3 million ~~for~~primarily related to deferred ~~tax liabilities and other tax adjustments associated with the IPO and reorganization transaction.~~taxes.

Liquidity and Capital Resources

Liquidity

Our liquidity reflects our ability to meet our current obligations (including our operating expenses and, when applicable, the retirement of our debt and margin calls relating to our Hedging Instruments, warehouse lines and Secured Credit Facilities), fund new originations and purchases, meet servicing requirements, and make investments as we identify them.potential cash requirements. We forecast the need to have adequate liquid funds available to operate and grow our business. As of ~~March 31, 2021,~~September 30, 2023, unrestricted cash and cash equivalents were ~~$630.5~~$717.2 million and committed and uncommitted available capacity under our warehouse and other lines of credit was ~~$2.0~~$1.8 billion.

We fund substantially all of the mortgage loans we close through borrowings under our warehouse lines. Given the broad impact of the COVID-19 pandemic on the financial markets, our future ability to borrow money to fund our current and future loan production is unknown. Our mortgage origination liquidity could also be affected as our lenders reassess their exposure to the mortgage origination industry and either curtail access to uncommitted mortgage warehouse financing capacity or impose higher costs to access such capacity. Our liquidity may be further constrained as there may be less demand by investors to acquire our mortgage loans in the secondary market. Even if such demand exists, we face a substantially higher repurchase risk as a result of the COVID-19 pandemic stemming from our clients inability to repay the underlying loans. In response to the COVID-19 pandemic, we have increased our cash position and total loan funding capacity with our current and new lending partners.

As a servicer, we are required to advance principal and interest to the investor for up to four months on GSE backed mortgages and longer on other government agency backed mortgages on behalf of clients who have entered a forbearance plan. As of March 31, 2021, approximately 1.4%, or $1.9 billion UPB, of our servicing portfolio was in active forbearance compared to 2.4%, or $2.4 billion as of December 31, 2020. While these advance requirements may be significant at higher levels of forbearance, we believe we are very well-positioned in terms of our liquidity. In September 2020, we entered into a variable funding note facility for the financing of servicing advance receivables with respect to residential mortgage loans serviced by us on behalf of Fannie Mae and Freddie Mac. We will continue evaluating the capital markets as well, which would further supplement our liquidity should the need arise.

~~Sources and Uses of Cash~~

Our primary sources of liquidity have been as follows: (i) funds obtained from our warehouse ~~lines;~~and other lines of credit; (ii) proceeds from debt obligations; (iii) proceeds received from the sale and securitization of loans; (iv) proceeds from the sale of servicing rights; (v) loan fees from the origination of loans; (vi) servicing fees; (vii) title and escrow fees from settlement services; (viii) real estate referral fees; and (ix) interest income from LHFS.

Our primary uses of funds for liquidity have included the following: (i) funding mortgage loans; (ii) funding loan origination costs; (iii) payment of warehouse line haircuts required at loan origination; (iv) payment of interest expense on warehouse ~~lines;~~and other lines of credit; (v) payment of interest expense under debt obligations; (vi) payment of operating expenses; (vii) repayment of warehouse ~~lines;~~and other lines of credit; (viii) repayment of debt obligations; (ix) funding of servicing advances; (x) margin calls on warehouse and other lines of credit or Hedging Instruments; (xi) ~~payment of distributions and other amounts due to the holders of common units; (xii) payments of cash dividends subject to the discretion of our board of directors, (xiii)~~ repurchases of loans under representation and warranty breaches; ~~(xiv) earnout payments from acquisitions;~~ and ~~(xv)~~(xii) costs relating to ~~subservicing.~~

We rely on the secondary mortgage market as a source of long-term capital to support our mortgage lending operations. Approximately 93% of the mortgage loans that we originated during the three months ended March 31, 2021 were sold in the

secondary mortgage market to Fannie Mae or Freddie Mac or, in the case of MBS guaranteed by Ginnie Mae, are mortgage loans insured or guaranteed by the FHA or VA. We also sell loans to many private investors.servicing.

At this time, we currently believe that ~~there are no material market trends that would affect~~ our ~~access to long-term or short-term borrowings~~cash on hand, as well as the sources of liquidity described above, will be sufficient to maintain our current operations ~~or that would likely cause us to cease to be in compliance with applicable covenants for our indebtedness or that would inhibit our ability to~~and fund our loan ~~operations~~originations and capital commitments for the next twelve months. However, ~~should those trends change,~~ we ~~believe we could retain less or sell additional servicing rights, scale back growth or take other actions~~will continue to ~~mitigate any significant increase~~review our liquidity needs in ~~demands on our liquidity.~~

~~Warehouse Lines~~light of current and ~~Debt Obligations~~

Warehouse lines are discussed in Note 9- Warehouse and Other Lines of Credit and debt obligations are discussed in Note 10- Debt Obligations of the Notes to Consolidated Financial Statements contained in Item 1.

We finance most of our loan originations on a short-term basis using our warehouse lines. Under our warehouse lines, we agree to transfer certain loans to our counterparties against the transfer of funds by them, with a simultaneous agreement by the counterparties to transfer the loans back to us at the date loans are sold, or on demand by us, against the transfer of funds from us. We do not recognize these transfers as sales for accounting purposes. We typically repurchase the loans within 6 to 15 days of funding. Our warehouse lines are short-term borrowings which mature in less than one year with the exception of our securitization facilities which have terms of two and three years. We utilize both committed and uncommitted loan funding facilitiesanticipated mortgage market conditions and we ~~evaluate~~have taken various steps to align our ~~needs under these facilities based on forecasted volume of loan originations~~cost structure with current and ~~sales.~~expected mortgage origination volumes.

As of March 31, 2021, we had $10.3 billion of capacity under our warehouse lines, of which $3.4 billion was committed. Our $10.3 billion of capacity as of March 31, 2021 was comprised of $8.7 billion with maturities staggered throughout 2021, $600.0 million maturing in 2022, $500.0 million maturing in 2023, and $500.0 million maturing in 2024. As of March 31, 2021, we maintained warehouse lines with fourteen counterparties. Our warehouse lines typically have terms of one year and are routinely renewed annually. As of March 31, 2021, we had $8.3 billion of borrowings outstanding under these facilities and $2.0 billion of additional availability under our facilities.

When we draw on the warehouse lines, we must pledge eligible loan collateral and make a capital investment, or “haircut,” upon financing the loans, which is generally determined by the type of collateral provided and the warehouse line terms. Our warehouse line providers require a haircut based on product types and the market value of the loans. The haircuts are normally recovered from sales proceeds. With the expected future increase in loan origination volumes, we will be required to use additional capital for haircuts and increase our restricted cash balances with our warehouse lenders. As of March 31, 2021, we had $69.8 million in restricted cash posted as additional collateral with our warehouse lenders and securitization facilities, as compared to $190.6 million as of December 31, 2020.

Interest on our warehouse lines varies by facility and depends on the type of loan that is being financed or the period of time that a loan is transferred to our warehouse line counterparty. As of March 31, 2021, interest expense under our warehouse lines was generally based on 30-day LIBOR plus a margin and in some cases a minimum interest rate and certain commitment and utilization fees apply. 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.Financial Covenants

Our ~~warehouse lines~~lenders require us to comply with various financial covenants including tangible net worth, liquidity, leverage ratios and ~~net income.~~profitability. As of ~~March 31, 2021,~~September 30, 2023, we were in full compliance with all ~~of our warehouse lending~~financial covenants. Although these financial covenants limit the amount of indebtedness that we may incur and affect our liquidity through minimum cash reserve requirements, we believe that these covenants currently provide us with sufficient flexibility to ~~successfully~~ operate our business and obtain the financing necessary to achieve that purpose.

Seller/Servicer Financial Requirements

~~Secured debt obligations as~~As seller and servicer, we are subject to minimum net worth, liquidity and other financial requirements. In 2022, both FHFA and Ginnie Mae revised these requirements. Effective from September 30, 2023, minimum net worth requirements for FHFA and Ginnie Mae include a base of ~~March 31, 2021 totaled $222.5~~$2.5 million plus percentages of the seller/servicer’s residential first lien mortgage servicing UPB serviced for each agency and a percentage of other non-agencies servicing UPB. Base liquidity for the agencies depends on the remittance type and includes specific percentages of the seller/servicer's residential first lien mortgage servicing UPB for each agency, along with a percentage for other non-agencies servicing UPB. Large non-depositories require a liquidity buffer based on UPB for FHFA and Ginnie Mae. The capital ratio for FHFA and Ginnie Mae requires tangible net worth/total assets to be equal to or greater than 6% for both agencies. As of $1.9 million of deferred financing costs, as compared to $221.2 million net of $2.4 million of deferred financing costs as of December 31, 2020. Secured debt obligations as of March 31, 2021 and December 31, 2020 included our 2020-VF1 Notes, GMSR VFN, and Term Notes. The 2020-VF1 Notes are secured by loanDepot.com, LLC’s rights to reimbursement for advances made pursuant to Fannie Mae and FreddieSeptember 30, 2023, we were in compliance with these financial requirements.

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Revised FHFA and Ginnie Mae seller servicer minimum financial eligibility requirements effective December 31, 2023 include origination liquidity and third-party ratings. FHFA also requires an annual capital and liquidity plan effective March 31, 2024, and Ginnie Mae is implementing a risk-based capital requirement effective December 31, 2024. We are assessing the impact of these upcoming requirements but anticipate no significant change in our ability to meet financial eligibility requirements.

Warehouse and Other Lines of Credit

We primarily finance mortgage loans through borrowings under our warehouse and other lines of credit. Under these facilities, we transfer specific loans to our counterparties and receive funds from them. Simultaneously, there is an agreement in place where the counterparties commit to transferring the loans back to us, either at the date the loans are sold or upon our request, and we provide the funds in return. We do not recognize these transfers as sales for accounting purposes. During the three months ended September 30, 2023, our loans remained on warehouse lines for an average of 18 days. Our warehouse facilities are generally short-term borrowings with original maturities between one and two years and our securitization facility is a three year term. We utilize both committed and uncommitted loan funding facilities and we evaluate our needs under these facilities based on forecasted volume of loan originations and sales. Our liquidity could be affected as lenders may reassess their exposure to the mortgage origination industry and potentially limit access to uncommitted mortgage warehouse financing or increase associated costs. Moreover, there may be reduced demand from investors to acquire our mortgage loans in the secondary market, further impacting our liquidity. Approximately 76% of the mortgage loans that we originated during the nine months ended September 30, 2023 were sold in the secondary mortgage market either directly to Fannie Mae and Freddie Mac ~~requirements~~or securitized into MBS guaranteed by Ginnie Mae. We also sell loans to many private investors.

As of September 30, 2023, we maintained revolving lines of credit with nine counterparties providing warehouse and ~~mature~~securitization facilities with borrowing capacity totaling $3.9 billion of which $1.3 billion was committed. Our $3.9 billion of capacity as of September 30, 2023 was comprised of $3.4 billion with maturities staggered throughout September 2024 and $0.5 billion maturing in October 2024. As of September ~~2021 (unless earlier redeemed~~30, 2023, we had $1.9 billion of borrowings outstanding and $1.8 billion of additional availability under our facilities. Warehouse and other lines of credit are further discussed in ~~accordance~~Note 8- Warehouse and Other Lines of Credit.

When we draw on our warehouse and securitization facilities we must pledge eligible loan collateral. Our warehouse line providers require us to make a capital investment, or “haircut.” upon financing the loan, which is generally based on product types and the market value of the loans. The haircuts are normally recovered from sales proceeds. As of September 30, 2023, we had a total of $17.9 million in restricted cash posted as collateral with ~~their terms).~~our warehouse and securitization facilities, of which $4.3 million was the minimum requirement.

Debt Obligations

MSR facilities and Term Notes provide financing for our servicing portfolio investments. As of September 30, 2023 the outstanding balance of our MSR facilities was $925.1 million net of $0.4 million deferred financing costs. The ~~GMSR VFN is~~outstanding balance of Term Notes was $200.0 million. MSR facilities are secured by Ginnie Mae, ~~mortgage servicing rights~~Fannie Mae, or Freddie Mac MSRs, which amounted to $1.4 billion as of September 30, 2023 and ~~matures in October 2021. The~~ Term Notes are secured by ~~certain~~specific participation certificates relating to Ginnie Mae mortgage servicing rights pursuant to the terms of a base indenture and mature in October 2023. The 2020-VF1 Notes, GMSR VFN, and Term Notes accrue interest at 30-day LIBOR plus a margin per annum. Our secured debt obligations require us to satisfy certain financial covenants and we were in compliance with all such covenantsMSRs totaling $621.4 million as of ~~March 31, 2021~~the same date.

Securities financing facilities provide financing for the retained interest securities associated with our securitizations. As of September 30, 2023 there were outstanding securities financing facilities of $76.3 million, secured by trading securities with a fair value of $89.3 million.

Servicing advance facilities provide financing for our servicing agreements. As servicer, we are required to fulfill contractual obligations such as principal and ~~December 31, 2020.~~

interest payments for certain investor as well as taxes, insurance, foreclosure costs, and other necessities to preserve the serviced assets. For GSE-backed mortgages, this obligation extends up to four months, and for other government agency-backed mortgages, it may extend even longer, especially for clients under forbearance plans. The size of servicing advance balances is influenced by delinquency rates and prepayment speeds. As of September 30, 2023 the outstanding balance on our servicing advance facilities was $16.0 million secured by servicing advance receivables totaling $54.9 million.

Unsecured debt obligations as of ~~March 31, 2021 totaled $1.1~~September 30, 2023 consisted of Senior Notes totaling $1.0 billion net of ~~$17.4~~$8.4 million of deferred financing ~~costs, as compared~~costs. Periodically, and in accordance with applicable laws and regulations, we may take actions to ~~$491.3 million, net~~reduce or

repurchase our debt. These actions can include redemptions, tender offers, cash purchases, prepayments, refinancing, exchange offers, open market or privately-negotiated transactions. The decision on amount of ~~$8.7~~debt to be reduced or repurchased depends on several factors, including market conditions, trading levels of our debt, our cash positions, compliance with debt covenants, and other relevant considerations. During the third quarter of 2023, we repurchased $5.3 million of ~~deferred financing costs as~~Senior Notes at 67.62% of ~~December 31, 2020. Unsecured debt~~par which resulted in a $1.7 million gain on extinguishment of debt. Debt obligations ~~as of March 31, 2021 and December 31, 2020 consisted of our Senior Notes. The increase~~are further discussed in ~~unsecured debt obligations was due to the issuance~~Note 9- Debt Obligations of the ~~2028 Senior Notes.~~

Notes to Consolidated Financial Statements contained in Item 1.

Dividends and Distributions

~~During the three months ended~~As part of our balance sheet and capital management strategies, we suspended our regular quarterly dividend effective March 31, ~~2021, we paid dividends~~2022 and ~~distributions of $166.6 million.~~

~~On April 21, 2021, we declared a special cash dividend on our Class A common stock and Class D common stock. LD Holdings,, a subsidiary of~~for the Company declared a simultaneous special cash dividend on its units. The aggregate amount of the special dividend to be paid by the Company and LD Holdings is $200.0 million, or $0.612 per share or $0.615 per unit, as applicable (the “Special Dividend”). The Special Dividend will be paid on May 18, 2021 to the Company’s stockholders and LD Holdings’ members of record as of the close of business on May 3, 2021.foreseeable future.

Cash dividends are subject to the discretion of our board of directors and our compliance with applicable law, and depend on, among other things, our results of operations, financial condition, level of indebtedness, capital requirements, contractual restrictions, including the satisfaction of our obligations under the TRA, restrictions in our debt agreements, business prospects and other factors that our board of directors may deem relevant.

Our ability to pay dividends depends on our receipt of cash dividends from our operating subsidiaries, which may further restrict our ability to pay dividends as a result of the laws of their jurisdiction of organization or agreements of our subsidiaries, including agreements governing our indebtedness. Future agreements may also limit our ability to pay dividends.

~~Margin Calls~~

Our warehouse lines, secured credit facilities, and certain derivative financial instruments contain margin call provisions that, under specific market conditions and terms, require us to transfer cash or, in some instances, additional assets in an amount sufficient to eliminate any margin deficit. Under our warehouse lines, secured credit facilities and certain derivative financial instruments, a margin deficit will generally result from any decline in the market value (as determined by the applicable lender) of the assets subject to the related financing agreement. Upon notice from the applicable lender, we will generally be required to satisfy the margin call on the day of such notice or within one business day thereafter, depending on the timing of the notice.

Contractual Obligations and Commitments

Our estimated contractual obligations as of ~~March 31, 2021~~September 30, 2023 are as follows:

Payments Due by Period(1)
(Dollars in thousands) Total Less than 1 Year 1-3 years 3-5 Years More than
5 Years
Warehouse lines $ 8,309,450 $ 6,709,450 $ 1,600,000 $ — $ —
Secured credit facilities 224,401 24,401 200,000 — —
Operating lease obligations 95,495 28,187 39,128 18,702 9,478
Naming and promotional rights agreements 136,827 24,720 44,168 39,939 28,000
Total contractual obligations $ 1,556,723 $ 77,308 $ 283,296 $ 558,641 $ 637,478


	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	$	1,897,859	$	1,397,859	$	500,000	$	—	$	—
Debt obligations (1)
Secured credit facilities	1,017,833		692,261		325,572		—		—
Term Notes	200,000		—		200,000		—		—
Senior Notes	997,125		—		497,750		499,375		—

Operating lease obligations (2)	61,853		20,659		27,401		13,550		243
Naming and promotional rights agreements	78,621		24,743		28,378		12,000		13,500
Total contractual obligations	$	4,253,291	$	2,135,522	$	1,579,101	$	524,925	$	13,743

(1) Amounts exclude deferred financing costs.

(2) Represents lease obligations for office space under non-cancelable operating lease agreements.

In addition to the above contractual obligations, we also ~~had~~have interest rate lock commitments ~~to originate loans of $24.5 billion as of March 31, 2021.~~and forward sale contracts. Commitments to originate loans do not necessarily reflect future cash requirements as some commitments are expected to expire without being drawn upon and, therefore, those commitments have been excluded from the table above. Refer to Note 5- Derivative Financial Instruments and Hedging Activities and Note 14- Commitments & Contingencies of the Notes to Consolidated Financial Statements contained in Item 1 for further discussion on derivatives and other contractual commitments.

Off-Balance Sheet Arrangements

As of ~~March 31, 2021,~~September 30, 2023, we were party to mortgage loan participation purchase and sale agreements, pursuant to which we have access to uncommitted facilities that provide liquidity for recently sold MBS up to the MBS settlement date. These facilities, which we refer to as gestation facilities, are a component of our financing strategy and are off-balance sheet ~~arrangements.~~arrangements provided by certain warehouse lenders.

Critical Accounting Policies and Estimates

We prepare our consolidated financial statements in accordance with GAAP, which requires us to make judgments, estimates and assumptions that affect: (i) the reported amounts of our assets and liabilities; (ii) the disclosure of our contingent assets and liabilities at the end of each reporting period; and (iii) the reported amounts of revenues and expenses during each reporting period. We continually evaluate these judgments, estimates and assumptions based on our own historical experience, knowledge and assessment of current business and other conditions and our expectations regarding the future based on available information which together form our basis for making judgments about matters that are not readily apparent from other sources. Since the use of estimates is an integral component of the financial reporting process, our actual results could differ from those estimates. Some of our accounting policies require a higher degree of judgment than others in their application. Our accounting policies are described in Note 1 to the consolidated financial statements included in the Company's ~~2020~~2022 Form 10-K. At December 31, ~~2020,~~2022, the most critical of these significant accounting policies were policies related to the fair value of ~~financial instruments,~~ loans held for sale, servicing rights, and derivative financial ~~instruments, and loan repurchase reserve.~~instruments. As of the date of this report, there have been no significant changes to the Company's critical accounting policies or estimates.

When reading our consolidated financial statements, you should consider our selection of critical accounting policies, the judgment and other uncertainties affecting the application of such policies and the sensitivity of reported results to changes in conditions and assumptions.

~~Recent Accounting Pronouncements~~

~~Refer to Note 2 – Recent Accounting Pronouncements to the consolidated financial statements included elsewhere in this report for a discussion of recently issued accounting guidance.~~

Reconciliation of Non-GAAP Measures

To provide investors with information in addition to our results as determined by GAAP, we disclose ~~Adjusted Total Revenue, Adjusted Net Income, Adjusted Diluted EPS, and Adjusted EBITDA as~~certain non-GAAP ~~measures.~~measures to assist investors in evaluating our financial results. We believe ~~Adjusted Total Revenue, Adjusted Net Income, Adjusted Diluted EPS, and Adjusted EBITDA~~these non-GAAP measures provide useful information to investors regarding our results of operations because each measure assists both investors and management in analyzing and benchmarking the performance and value of our business. They facilitate company-to-company operating performance comparisons by backing out potential differences caused by variations in hedging strategies, changes in valuations, capital structures (affecting ~~net~~ interest ~~expense)~~expense on non-funding debt), taxation, the age and book depreciation of facilities (affecting relative depreciation expense), and ~~the amortization of intangibles, which may vary for different companies for reasons unrelated to operating performance, as well as certain historical~~other cost ~~(benefit)~~or benefit items which may vary for different companies for reasons unrelated to operating performance. These non-GAAP measures ~~are not~~include our Adjusted Total Revenue, Adjusted Net Income (Loss), Adjusted Diluted Earnings (Loss) Per Share (if dilutive), and Adjusted EBITDA (LBITDA). We exclude from these non-GAAP financial measures calculated in accordance with GAAP and should not be considered as a substitute for revenue, net income, or any other operating performance measure calculated in accordance with GAAP, and may not be comparable to a similarly titled measure reported by other companies.

We define “Adjusted Total Revenue” as total revenues, net of the change in fair value of servicing rights and the related hedging gains and losses. We define “Adjusted Net Income” as tax-effected earnings before change in fair value of contingent consideration, stock compensation expense and management fees, IPO expense, and the change in fair value of MSRs ~~net of the~~and related hedging gains and losses as they add volatility and are not indicative of the ~~tax effects~~Company’s operating performance or results of ~~those adjustments.~~operation. We ~~define “Adjusted Diluted EPS”~~also exclude stock-based compensation expense, which is a non-cash expense, gains or losses on extinguishment of debt and disposal of fixed assets, non-cash goodwill impairment, and other impairment charges to intangible assets and operating lease right-of-use assets as management does not consider these costs to be indicative of our performance or results of operations. Adjusted Net Income divided by the diluted weighted average number of shares of Class A common stock and Class D common stock outstanding for the applicable period, which assumes the pro forma exchange of all outstanding Class C common shares for shares of Class A common stock. We define “Adjusted EBITDA” as earnings beforeEBITDA (LBITDA) includes interest expense ~~and amortization~~on funding facilities, which are recorded as a component of ~~debt issuance costs~~“net interest income (expense)”, as these expenses are a direct operating expense driven by loan origination volume. By contrast, interest expense on our non-funding debt ~~income taxes, depreciation~~is a function of our capital structure and amortization, change in fair value of MSRs, net of the related hedging gains and losses, change in fair value of contingent consideration, stock compensation expense and management fees, and IPO expenses.is therefore excluded from Adjusted EBITDA (LBITDA). Adjustments for income taxes are made to reflect historical results of operations on the basis that it was taxed as a corporation under the Internal Revenue Code, and therefore subject to U.S. federal, state and local income taxes. ~~We exclude from each~~Adjustments to Diluted Weighted Average Shares Outstanding assumes the pro forma conversion of ~~these~~weighted average Class C shares to Class A common stock. These non-GAAP measures the change in fair value of MSRs and related hedging gains and losses as this represents a non-cash non-realized adjustment to our total revenues, reflecting changes in assumptions including discount rates and prepayment speed assumptions, mostly due to changes in market interest rates, which is not indicative of our performance or results of operations. We also exclude stock compensation expense, which is a non-cash expense, management fees and IPO expenses as management does not consider these costs to be indicative of our performance or results of operations. Adjusted EBITDA includes interest expense on funding facilities, which are recorded as a component of “net interest income (expense),” as these expenses are a direct operating expense driven by loan origination volume. By contrast, interest and amortization expense on non-funding debt is a function of our capital structure and is therefore excluded from Adjusted EBITDA.

~~Adjusted Total Revenue, Adjusted Net Income, Adjusted Diluted EPS, and Adjusted EBITDA~~ have limitations as analytical tools, and ~~you~~ should not ~~consider them~~be considered in isolation or as a substitute for ~~analysis of our results as~~revenue, net income, or any other operating performance measure calculated in accordance with GAAP, and may not be comparable to a similarly titled measure reported ~~under U.S. GAAP.~~by other companies. Some of these limitations are:

•they do not reflect every cash expenditure, future requirements for capital expenditures or contractual commitments;

•Adjusted EBITDA (LBITDA) does not reflect the significant interest expense or the cash requirements necessary to service interest or principal payment on our debt;

•although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced or require improvements in the future, and Adjusted Total Revenue, Adjusted Net Income (Loss), and Adjusted EBITDA (LBITDA) do not reflect any cash requirement for such replacements or improvements; and

•they are not adjusted for all non-cash income or expense items that are reflected in our statements of cash flows.

Because of these limitations, Adjusted Total Revenue, Adjusted Net Income (Loss), Adjusted Diluted ~~EPS,~~Earnings (Loss) Per Share, and Adjusted EBITDA (LBITDA) are not intended as alternatives to total revenue, net income (loss), net income (loss) attributable to the Company, or Diluted ~~EPS~~Earnings (Loss) Per Share or as an indicator of our operating performance and should not be considered as measures of discretionary cash available to us to invest in the growth of our business or as measures of cash that will be available to us to meet our obligations. We compensate for these limitations by using Adjusted Total Revenue, Adjusted Net Income (Loss), Adjusted Diluted ~~EPS,~~Earnings (Loss) Per Share, and Adjusted

EBITDA (LBITDA) along with other comparative tools, together with U.S. GAAP measurements, to assist in the evaluation of operating performance. See below for a reconciliation of these non-GAAP measures to their most comparable U.S. GAAP measures.

Reconciliation of Total Revenue to Adjusted Total Revenue (Dollars in thousands)
(Unaudited):
Three Months Ended
March 31, 2021 March 31, 2020
Total net revenue $ 1,316,008 $ 486,121
Change in fair value of servicing rights(1)
(231,208) 86,186
Net losses (gains) from derivatives hedging servicing rights 43,527 (19,171)
Realized and unrealized losses (gains) from derivative assets and liabilities(2)
112,929 (52,896)
Change in fair value of servicing rights net of hedging gains and losses(3)
(74,752) 14,119
Adjusted total revenue $ 1,241,256 $ 500,240

~~(1)Included in change in fair value of servicing rights, net in the Company’s consolidated statements of operations.~~

~~(2)Included in gain on origination and sale of loans, net in the Company’s consolidated statements of operations, as shown below:~~

(Dollars in thousands)
(Unaudited): Three Months Ended
March 31, 2021 March 31, 2020
Unrealized gains from derivative assets and liabilities $ 209,386 $ 29,981
Less: Unrealized gains (losses) from derivative assets and liabilities—IRLC and LHFS 328,322 (20,517)
Unrealized (losses) gains from derivative assets and liabilities—servicing rights (118,936) 50,498
Realized gains (losses) from derivative assets and liabilities 105,643 (54,361)
Less: Realized gains (losses) from derivative assets and liabilities—IRLC and LHFS 99,636 (56,759)
Realized gains (losses) from derivative assets and
liabilities—servicing rights 6,007 2,398
Realized and unrealized (losses) gains from derivative assets and liabilities - servicing rights $ (112,929) $ 52,896


Reconciliation of Total Revenue to Adjusted Total Revenue (Dollars in thousands) (Unaudited):	Three Months Ended				Nine Months Ended
	September 30, 2023		September 30, 2022		September 30, 2023		September 30, 2022
Total net revenue	$	265,661	$	274,192	$	745,395	$	1,086,141
Change in fair value of servicing rights net, of hedging gains and losses(1)	702		(24,529)		22,868		(58,601)
Adjusted total revenue	$	266,363	$	249,663	$	768,263	$	1,027,540

~~(3)~~(1)Represents the change in the fair value of servicing rights ~~attributable~~due to changes in valuation inputs or assumptions, net of gains or losses from derivatives hedging ~~gains and losses.~~servicing rights.

Reconciliation of Net Income to Adjusted Net Income
(Dollars in thousands)
(Unaudited):
Three Months Ended
March 31, 2021 March 31, 2020
Net income attributable to loanDepot, Inc. $ 44,875 $ —
Net income from the pro forma conversion of Class C common shares to Class A common shares(1)
382,978 88,996
Net income 427,853 88,996
Adjustments to the provision for income taxes(2)
(101,221) (22,907)
Tax-effected net income 326,632 66,089
Change in fair value of servicing rights, net of hedging gains and losses(3)
(74,752) 14,119
Change in fair value - contingent consideration — — 2,507
Stock compensation expense and management fees 60,076 220
IPO expenses 4,834 —
Tax effect of adjustments(4)
2,601 (4,336)
Adjusted net income $ 319,391 $ 78,599
46


Reconciliation of Net Income (Loss) to Adjusted Net Income (Loss) (Dollars in thousands) (Unaudited):	Three Months Ended				Nine Months Ended
	September 30, 2023		September 30, 2022		September 30, 2023		September 30, 2022
Net loss attributable to loanDepot, Inc.	$	(16,599)	$	(60,081)	$	(82,950)	$	(195,750)
Net loss from the pro forma conversion of Class C common shares to Class A common shares(1)	(17,663)		(77,401)		(92,793)		(256,873)
Net loss	(34,262)		(137,482)		(175,743)		(452,623)
Adjustments to the benefit for income taxes(2)	4,845		20,124		25,054		66,787
Tax-effected net loss	(29,417)		(117,358)		(150,689)		(385,836)
Change in fair value of servicing rights, net of hedging gains and losses(3)	702		(24,529)		22,868		(58,601)

Stock-based compensation expense	3,940		4,773		15,619		11,794

Gain on extinguishment of debt	(1,651)		—		(1,690)		(10,528)
Loss on disposal of fixed assets	93		11,026		1,105		11,026
Goodwill impairment	—		—		—		40,736
Other impairment	129		9,149		470		15,112
Tax effect of adjustments(4)	(655)		93		(9,140)		9,196
Adjusted net loss	$	(26,859)	$	(116,846)	$	(121,457)	$	(367,101)

(1)Reflects net ~~income~~loss to Class A common stock and Class D common stock from the pro forma exchange of Class C common ~~stock as of March 31, 2021.~~stock.

(2)loanDepot, Inc. is subject to federal, state and local income taxes. Adjustments to income tax ~~(benefit)~~benefit reflect the effective income tax rates below, and the pro forma assumption that loanDepot, Inc. owns 100% of LD Holdings.

Three Months Ended
March 31, 2021 March 31, 2020
Statutory U.S. federal income tax rate 21.00 % 21.00 %
State and local income taxes (net of federal benefit) 5.43 4.74
Effective income tax rate 26.43 % 25.74 %


	Three Months Ended				Nine Months Ended
	September 30, 2023		September 30, 2022		September 30, 2023		September 30, 2022
Statutory U.S. federal income tax rate	21.00	%	21.00	%	21.00	%	21.00	%
State and local income taxes (net of federal benefit)	6.43		5.00		6.00		5.00
Effective income tax rate	27.43	%	26.00	%	27.00	%	26.00	%

(3)~~Amounts represent~~Represents the change in the fair value of servicing rights ~~attributable~~due to changes in valuation inputs or assumptions, net of gains or losses from derivatives hedging ~~gains and losses.~~servicing rights.

(4)Amounts represent the income tax effect of (a) change in fair value of servicing rights, net of hedging gains and losses, (b) change in fair value of contingent consideration (c) stock compensation expense and management fees, and (d) IPO expense atusing the aforementioned effective income tax ~~rates.~~rates, excluding certain discrete tax items.


Reconciliation of Adjusted Diluted Weighted Average Shares Outstanding to Diluted Weighted Average Shares Outstanding (Dollars in thousands except per share) (Unaudited)	Three Months Ended				Nine Months Ended
	September 30, 2023		September 30, 2022		September 30, 2023		September 30, 2022
Net loss attributable to loanDepot, Inc.	$	(16,599)	$	(60,081)	$	(82,950)	$	(195,750)
Adjusted net loss	(26,859)		(116,846)		(121,457)		(367,101)

Share Data:
Diluted weighted average shares of Class A and Class D common stock outstanding	175,962,804		162,464,369		173,568,986		151,803,928
Assumed pro forma conversion of weighted average Class C shares to Class A common stock	147,171,089		156,677,534		148,741,661		167,796,888
Adjusted diluted weighted average shares outstanding	323,133,893		319,141,903		322,310,647		319,600,816

~~Reconciliation of Adjusted Diluted Weighted Average Shares Outstanding to Diluted Weighted Average Shares Outstanding~~ ~~(1)~~

~~($ in thousands except per share)~~

~~(Unaudited)~~

~~Three Months Ended~~

March 31,
2021

~~Net income attributable to loanDepot, Inc.~~

~~44,875~~

~~Adjusted net income~~

~~319,391~~

~~Share Data:~~

~~Diluted weighted average shares of Class A and Class D common stock outstanding~~

~~125,772,797~~

~~Assumed pro forma conversion of Class C shares to Class A common stock~~ ~~(2)~~

~~198,537,418~~

~~Adjusted diluted weighted average shares outstanding~~

~~324,310,215~~

~~Diluted EPS~~

~~0.36~~

~~Adjusted Diluted EPS~~

~~0.98~~

~~(1)This non-GAAP measures was not applicable for the three months ending March 31, 2020 as the IPO and reorganization transaction had not yet occurred.~~

~~(2)Reflects the assumed pro forma conversion of all outstanding shares of Class C common stock to Class A common stock.~~47

Reconciliation of Net Income to Adjusted EBITDA
(Dollars in thousands)
(Unaudited):
Three Months Ended
March 31, 2021 March 31, 2020
Net income $ 427,853 $ 88,996
Interest expense — non-funding debt (1)
13,171 10,970
Income tax expense 18,277 —
Depreciation and amortization 8,454 9,372
Change in fair value of servicing rights, net of hedging gains and
losses (2)
(74,752) 14,119
Change in fair value - contingent consideration — 2,507
Stock compensation expense and management fees 60,076 220
IPO expenses 4,834 —
Adjusted EBITDA $ 457,913 $ 126,184


Reconciliation of Net Income (Loss) to Adjusted EBITDA (LBITDA) (Dollars in thousands) (Unaudited):	Three Months Ended				Nine Months Ended
	September 30, 2023		September 30, 2022		September 30, 2023		September 30, 2022
Net loss	$	(34,262)	$	(137,482)	$	(175,743)	$	(452,623)
Interest expense — non-funding debt(1)	42,504		36,138		128,619		83,671
Income tax benefit	(5,205)		(23,451)		(28,622)		(63,274)
Depreciation and amortization	10,592		10,243		31,339		32,110
Change in fair value of servicing rights, net of hedging gains and losses(2)	702		(24,529)		22,868		(58,601)

Stock-based compensation expense	3,940		4,773		15,619		11,794

Loss on disposal of fixed assets	93		11,026		1,105		11,026
Goodwill impairment	—		—		—		40,736
Other impairment	129		9,149		470		15,112
Adjusted EBITDA (LBITDA)	$	18,493	$	(114,133)	$	(4,345)	$	(380,049)

(1)Represents other interest expense, which ~~include~~includes gain on extinguishment of debt and amortization of debt issuance costs, in the ~~Company's~~Company’s consolidated statement of operations.

(2)Represents the change in the fair value of servicing rights ~~attributable~~due to changes in valuation inputs or assumptions, net of gains or losses from derivatives hedging ~~gains and losses.~~servicing rights.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

In the normal course of business, we are exposed to various risks which can affect our business, results and operations. The primary market risks to which we are exposed include interest rate risk, credit risk, prepayment risk and inflation risk.

We manage our interest rate risk and the price risk associated with changes in interest rates pursuant to the terms of an Interest Rate Risk Management Policy which (i) quantifies our interest rate risk exposure, (ii) lists the derivatives eligible for use as Hedging Instruments and (iii) establishes risk and liquidity tolerances.

Interest Rate Risk

Our principal market exposure is to interest rate risk as our business is subject to variability in results of operations due to fluctuations in interest rates. We anticipate that interest rates will remain our primary benchmark for market risk for the foreseeable future. Changes in interest rates affect our assets and liabilities measured at fair value, including LHFS, IRLCs, servicing rights and Hedging Instruments. In a declining interest rate environment, we ~~would~~ expect ~~our results of operations to be positively impacted by~~ higher loan origination volumes, ~~and~~higher loan ~~margins. However, we would expect our results of operations to be negatively impacted by higher actual and projected loan prepayments related to our loan servicing portfolio and a decrease~~margins, increases in the value of our ~~servicing rights. As interest rates decline, our~~ LHFS and IRLCs, ~~generally increase~~and decreases in the value ~~while~~of our Hedging Instruments ~~utilized to hedge against interest rate risk decrease in value.~~and servicing rights. In a rising interest rate environment, we ~~would~~ expect ~~a negative impact on the results of operations of our production activities and a positive impact on the results of operations of our servicing activities (principally through an increase~~lower loan origination volumes, lower loan margins, decreases in the ~~fair~~ value of ~~our servicing rights). As interest rates increase,~~ our LHFS and IRLCs, ~~generally decrease~~and increases in the value ~~while~~of our Hedging Instruments ~~typically increase in value.~~and servicing rights. The interaction between the results of operations of our various activities is a core component of our overall interest rate risk strategy. ~~See “—Sensitivity Analysis” for tabular analysis on the impact of changes in interest rates on our financial assets and liabilities measured at fair value.~~

IRLCs represent an agreement to extend credit to a potential customer, whereby the interest rate on the loan is set prior to funding. Our LHFS, which are held in inventory awaiting sale into the secondary market, and our IRLCs, are subject to changes in interest rates from the date of the commitment through the sale of the loan into the secondary market. Accordingly, we are exposed to interest rate risk and related price risk during the period from the date of the lock commitment through (i) the lock commitment cancellation or expiration date, or (ii) the date of sale into the secondary mortgage market. ~~Loan~~The average term for outstanding interest rate lock commitments ~~generally range between 10 and 60~~at September 30, 2023 was 44 days; and our average holding period of the loan from funding to sale was ~~13.2~~30 days ~~during~~for the ~~three~~nine months ended ~~March 31, 2021.~~September 30, 2023.

We manage the interest rate risk associated with our outstanding IRLCs, LHFS and servicing rights by entering into Hedging Instruments. Management expects these Hedging Instruments will experience changes in fair value opposite to changes in fair value of the IRLCs and LHFS, thereby reducing earnings volatility. We take into account various factors and strategies in determining the portion of IRLCs, LHFS, and servicing rights that we want to economically hedge. Our expectation of how many of our IRLCs will ultimately close is a key factor in determining the notional amount of Hedging Instruments used in hedging the position. ~~See “Item 1A. Risk Factors—Risks Related to Our Business—Our hedging strategies may not be successful in mitigating our risks associated with changes in interest rates.”~~

Credit Risk

We are subject to credit risk in connection with our loan sale transactions. While our contracts vary, we provide representations and warranties to purchasers and insurers of the mortgage loans sold that typically are in place for the life of the loan. In the event of a breach of these representations and warranties, we may be required to repurchase a mortgage loan or indemnify the purchaser, and any subsequent loss on the mortgage loan may be borne by us. The representations and warranties require adherence to applicable origination and underwriting guidelines (including those of Fannie Mae, Freddie Mac, and Ginnie Mae), 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.

We record a provision for losses relating to such representations and warranties as part of our loan sale transactions. The level of the liability for losses from representations and warranties is difficult to estimate and requires considerable management judgment. The level of loan repurchase losses is dependent on economic factors, trends in property values, investor repurchase demand strategies, and other external conditions that may change over the lives of the underlying loans. We evaluate the adequacy of our liability for losses from representations and warranties based on our loss experience and our assessment of incurred losses relating to loans that we have previously sold and which remain outstanding at the balance sheet date. As our portfolio of loans sold subject to representations and warranties grows and as economic fundamentals change, such adjustments can be material. However, we believe that our current estimates adequately approximate the losses incurred on our sold loans subject to such representations and warranties.

Additionally, we are exposed to credit risk associated with our ~~customers from our LHFS as well as credit risks related to our counterparties including our subservicer, Hedging Instrument~~borrowers, counterparties, and other significant vendors. Our ability to operate profitably is dependent on both our access to capital to finance our assets and our ability to profitably originate, sell, and service loans. Our ability to hold loans pending sale and/or securitization depends, in part, on the availability to us of adequate financing lines of credit at suitable interest rates and favorable advance rates.

In general, we manage such risk by selecting only counterparties that we believe to be financially strong, dispersing the risk among multiple counterparties, placing contractual limits on the amount of unsecured credit extended to any single counterparty and entering into netting agreements with the counterparties, as appropriate. During the ~~three~~nine months ended ~~March 31, 2021~~September 30, 2023 and ~~2020,~~2022, we incurred no losses due to nonperformance by any of our counterparties.

Prepayment Risk

Prepayment risk is affected by interest rates (and their inherent risk) and borrowers’ actions relative to their underlying loans. To the extent that the actual prepayment speed on the loans underlying our servicing rights differs from what we projected when we initially recognized them and when we measured fair value as of the end of each reporting period, the carrying value of our investment in servicing rights will be affected. In general, an increase in prepayment expectations will decrease our estimates of the fair value of the servicing right, thereby reducing expected servicing income. We monitor the servicing portfolio to identify potential refinancings and the impact that would have on associated servicing rights.

~~Inflation Risk~~

Almost all of our assets and liabilities are interest rate sensitive in nature. As a result, interest rates and other factors will influence our performance more than inflation. Changes in interest rates do not necessarily correlate with inflation rates or changes in inflation rates. Additionally, our financial statements are prepared in accordance with GAAP and our activities and balance sheet are measured with reference to historical cost and/or fair value without considering inflation.

5749

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Our management, with the participation of our CEO and CFO, has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), as of the end of the period covered by this Form 10-Q. Based on such evaluation, our CEO and CFO have concluded that as of ~~March 31, 2021,~~September 30, 2023, our disclosure controls and procedures are designed at a reasonable assurance level and are effective to provide reasonable assurance that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the rules and forms of the SEC, and that such information is accumulated and communicated to our management, including our CEO and CFO, as appropriate, to allow timely decisions regarding required disclosure.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting identified in management’s evaluation pursuant to Rules 13a-15(d) or 15d-15(d) of the Exchange Act during the period covered by this Form 10-Q that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Limitations on Effectiveness of Controls and Procedures

In designing and evaluating the disclosure controls and procedures and internal control over financial reporting, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply judgment in evaluating the benefits of possible controls and procedures relative to their costs.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

From time to time, we and certain of our subsidiaries are involved in various lawsuits in state or federal courts regarding violations of state or federal statutes, regulations or common law related to matters arising out of the ordinary course of business. ~~We are not currently subject to any other~~For a further discussion of our material legal ~~proceedings. See~~proceedings, see Note 1614 - Commitments and Contingencies of the Notes to Consolidated Financial Statements included in “Item 1 Financial Statements.” Additionally, below we have described certain other significant legal proceedings.

Securities Class Action Litigation

Beginning in September 2021, two putative class action lawsuits were filed in the United States District Court for the Central District of California asserting claims under the U.S. securities laws against the Company, certain of its directors, and certain of its officers regarding certain disclosures made in connection with the Company’s IPO. The two actions were consolidated in May 2022. A consolidated amended complaint was filed in June 2022, which, in addition to challenging disclosures made in connection with the IPO, alleges that certain disclosures made after the IPO were false and/or misleading. The Company’s motion to dismiss was filed on August 24, 2022. On January 24, 2023, the Court granted, in part, and denied, in part, the Company’s motion to dismiss. The Company’s answer to the consolidated amended complaint was filed on March 3, 2023. On June 26, 2023, the parties reached an agreement in principle to settle the action. On July 26, 2023, plaintiffs filed a motion for preliminary approval of the settlement with the Court, which is pending approval.

Stockholder Derivative Litigation

Beginning in October 2021, four shareholder derivative complaints were filed in the United States District Court for the Central District of California against certain of the Company’s directors and officers, alleging, among things, that these defendants breached their fiduciary duties by causing the Company to make the disclosures being

challenged in the putative securities class action described above and seeking unspecified monetary damages for the Company and that the Company make certain changes to its corporate governance. These derivative actions subsequently were consolidated into a single action (the “California Federal Action”). The California Federal Action currently is stayed. Beginning in March 2022, two substantially similar shareholder derivative complaints were filed in the United States District Court for the District of Delaware, and then were consolidated into a single action (the “Delaware Federal Action”). The Delaware Federal Action currently is stayed. Beginning in June 2023, three substantially similar shareholder derivative complaints were filed in the Delaware Court of Chancery. Two of the derivative actions were subsequently consolidated into a single action (the “Delaware Chancery Actions”). The third action was voluntarily dismissed. The Company’s response to the Delaware Chancery Action is due on December 13, 2023. The Company believes these lawsuits are without merit. The Company does not believe that a loss is probable or that the amount of loss is reasonably estimable in this matter at this time.

Item 1A. Risk Factors

There have been no material changes ~~or updates to~~in the risk factors ~~that were previously disclosed in~~discussed under Part I. "Item 1A. Risk Factors" of our ~~2020~~2022 Form 10-K filed with the SEC on March 16, ~~2021.~~2023.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

~~In connection~~Shares of the Company's Class B common stock or Class C common stock may each be converted, together with a corresponding Holdco Unit, as applicable, at any time and from time to time at the ~~consummation~~option of the holder of such share of Class B common stock or Class C common stock, as applicable, for one fully paid and non-assessable share of Class A common stock. Each share of the Company’s ~~initial public offering~~Class D common stock may be converted into one fully paid and non-assessable share of Class A common stock at any time at the ~~Company issued to~~option of the ~~Parthenon Stockholders 121,368,600 shares~~holder of such share of Class D common stock. There is no cash or other consideration paid by the holder converting such shares and, accordingly, there is no cash or other consideration received by the Company. The shares of Class A common stock ~~$0.001 par value per share in exchange of LD Investment Holdings, Inc.’s equity interests in LD Holdings. Additionally,~~issued by the Company in such conversions are exempt from registration pursuant to Section 3(a)(9) of the Securities Act.

On July 3, 2023, we issued ~~201,422,212~~to stockholders 337,513 shares of Class A common stock upon the conversion of the same number of shares of our Class C common stock $0.001 par value per share to certain of the continuing members under the LLC Agreement. The issuances in this paragraph were made in reliance on Section 4(a)(2) of the Securities Act of 1933, as amended.and corresponding Holdco Units held by such stockholders.

On August 1, 2023, we issued to stockholders 429,303 shares of Class A common stock upon the conversion of the same number of shares of our Class C common stock and corresponding Holdco Units held by such stockholders.

On September 1, 2023, we issued to stockholders 202,320 shares of Class A common stock upon the conversion of the same number of shares of our Class C common stock and corresponding Holdco Units held by such stockholders.

Item 3. Defaults Upon Senior Securities

Not applicable.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

Not applicable.

Item 6. Exhibits

The following documents are filed as a part of this report:


Exhibit No.			Description
3.1			Amended and Restated Certificate of Incorporation of loanDepot, Inc., dated February 11, 2021(incorporated herein by reference to exhibit 3.1 to the Company’s Current Report on Form 8-K filed on February 16, 2021).
3.2			Amended and Restated Bylaws of loanDepot, Inc., ~~dated February 11, 2021~~effective November 10, 2022 (incorporated herein by reference to ~~exhibit 3.2~~Exhibit 3.1 to the Company’s Current Report on Form 8-K filed on ~~February 16, 2021)~~November 15, 2022).
~~4.1~~10.1+			~~Registration Rights~~Amended and Restated Credit Agreement, dated ~~February 16, 2021,~~as of August 25, 2023, by and among ~~loanDepot, Inc., LD Holdings Group~~loanDepot.com, LLC, as borrower, Goldman Sachs Bank USA, as Administrative Agent for the financial institutions that may from time to time become parties as Lenders, and ~~certain holders identified therein~~the Lenders (incorporated herein by reference to ~~exhibit 4.1 to~~Exhibit 10.1 of the Company’s Current Report on Form 8-K filed on ~~February 16, 2021)~~August 31, 2023).
~~4.2~~10.2+			Amendment No. 5 to Series 2020-VF1 Indenture Supplement, dated as of ~~March 26, 2021,~~September 22, 2023, by and among ~~LD Holdings Group~~loanDepot Agency Advance Receivables Trust, as issuer, Citibank, N.A., as indenture trustee, calculation agent, paying agent, custodian and securities intermediary, loanDepot.com, LLC as servicer and administrator, JPMorgan Chase Bank, N.A., as administrative agent, and consented to by JPMorgan Chase Bank, N.A., as noteholder of the ~~guarantors party thereto and Wilmington Trust, National Association, as trustee (Form of 6.125% Senior Notes due 2028 included as Exhibit A thereto).~~Series 2020-VF1 Variable Funding Notes. (incorporated herein by reference to ~~exhibit 4.1 to~~Exhibit 10.1 of the Company’s Current Report on Form 8-K filed on ~~April 1, 2021)~~September 28, 2023).
~~10.1~~10.3+			~~Stockholders~~Amendment No. 5, dated September 25, 2023, by and between Bank of America, N.A. and loanDepot.com, LLC to the Second Amended and Restated Mortgage Loan Purchase Agreement, dated as of February 16, 2021, by and among loanDepot, Inc., Parthenon Investors III, L.P., PCap Associates, Parthenon Capital Partners Fund, L.P., Parthenon Investors IV, L.P., Parthenon Capital Partners Fund II, L.P. PCP Managers, L.P., The JLSSAA, Trust established September 4, 2014, JLSA, LLC, Trilogy Mortgage Holdings, Inc., Trilogy Management Investors Six, LLC, Trilogy Management Investors Seven, LLC and Trilogy Management Investors Eight, LLC2, 2022 (incorporated herein by reference to ~~exhibit 10.1 to~~Exhibit 10.2 of the Company’s Current Report on Form 8-K filed on ~~February 16, 2021)~~September 28, 2023).
~~10.2~~10.4+			~~Tax Receivable~~Amendment No. 7, dated September 25, 2023, by and among Bank of America, N.A., loanDepot BA Warehouse, LLC and loanDepot.com, LLC to the Second Amended and Restated Master Repurchase Agreement, dated as of ~~February 16,~~August 20, 2021 ~~by and among loanDepot, Inc., LD Holdings Group LLC and the other parties thereto~~ (incorporated herein by reference to ~~exhibit 10.2 to~~Exhibit 10.3 of the Company’s Current Report on Form 8-K filed on ~~February 16, 2021)~~September 28, 2023).
~~10.3~~10.5+			~~Fourth~~Amendment No. 2 to the Amended and Restated ~~Limited Liability Company~~Mortgage Loan Participation Sale Agreement, ~~of LD Holdings, LLC,~~ dated ~~as of February 11, 2021,~~September 27, 2023, by and among ~~LD Holdings Group~~loanDepot.com, LLC, as seller, and ~~the other parties thereto~~JPMorgan Chase Bank, National Association, as purchaser (incorporated herein by reference to ~~exhibit 10.3 to~~Exhibit 10.1 of the Company’s Current Report on Form 8-K filed on ~~February 16, 2021)~~October 3, 2023).
~~10.4+~~10.6+			~~Employment~~Second Amendment to First Amended and Restated Master Repurchase Agreement, dated ~~as of February 16, 2021,~~September 29, 2023 by and between ~~loanDepot, Inc.~~loanDepot.com, LLC, as seller, and ~~Patrick Flanagan~~JPMorgan Chase Bank, N.A., as buyer (incorporated herein by reference to ~~exhibit 10.4 to~~Exhibit 10.2 of the Company’s Current Report on Form 8-K filed on ~~February 16, 2021)~~October 3, 2023).
~~10.5+~~10.7+			~~Employment~~The Joinder to the Amended and Restated Security Agreement, dated ~~as of February 16, 2021,~~September 29, 2023, by and ~~between loanDepot, Inc.~~among loanDepot.com, LLC, as borrower, and ~~Anthony Hsieh~~Flagstar Bank, National Association, as administrative agent on behalf of the lenders (incorporated herein by reference to ~~exhibit 10.5 to~~Exhibit 10.3 of the Company’s Current Report on Form 8-K filed on ~~February 16, 2021)~~October 3, 2023).
~~10.6+~~10.8			~~Employment~~ Addendum, dated as of October 23, 2023, to Second Amended and Restated Master Repurchas e Agreement, dated as of ~~February 16,~~August 20, 2021, by and ~~between~~among Bank of America, N.A, loanDepot ~~Inc.~~BA Warehouse, LLC, and ~~Jeff DerGurahian~~loanDepot.com, LLC (incorporated herein by reference to ~~exhibit 10.6 to~~Exhibit 10.1 of the Company’s Current Report on Form 8-K filed on ~~February 16, 2021)~~October 27, 2023).
10.9+			Joint Omnibus Amendment No. 4, dated as of November 1, 2023, to the Series 2017-VF1 Repurchase Agreement, Amendment No. 2 to the Series 2021-PIAVF1 Repurchase Agreement, Amendment No. 3 to the Series 2021-SAVF1 Repurchase Agreement, Amendment No. 6 to the Series 2017-VF1 Pricing Side Letter, Amendment No.4 to the Series 2021-PIAVF1 Pricing Side Letter and the Series 2021-SAVF1 Pricing Side Letter by and among Atlas Securitized Products, L.P. as administrative agent, Nexera Holding LLC, as the buyer, and loanDepot, Inc., as seller (incorporated herein by reference to Exhibit 10.1 of the Company’s Current Report on Form 8-K filed on November 8, 2023.).
31.1*			Certification of Principal Executive Officer .
31.2*			Certification of Principal Financial Officer.

5952


~~10.7+~~	Employment Agreement, dated as of February 16, 2021, by and between loanDepot, Inc. and Jeff Walsh (incorporated herein by reference to exhibit 10.7 to the Company’s Current Report on Form 8-K filed on February 16, 2021).
~~10.8+~~Exhibit No.		~~2021 Omnibus Incentive Plan (incorporated herein by reference to Exhibit 10.1 to the Company's Form S-8 (Registration No. 333-253172) filed on February 16, 2021).~~
~~10.9~~Description		Amendment No. 6, dated March 1, 2021, by and among Credit Suisse First Boston Mortgage Capital LLC, Credit Suisse AG, a company incorporated in Switzerland, acting through its Cayman Island Branch, Alpine Securitization LTD., and loanDepot.com, LLC to the Master Repurchase Agreement, dated as of March 10, 2017 (incorporated herein by reference to exhibit 10.1 to the Company’s Current Report on Form 8-K filed on March 4, 2021).
~~10.1~~		Twenty Third Amendment, dated as of March 2, 2021, by and between TIAA, FSB and loanDepot.com, LLC to the Master Repurchase and the Pricing Letter, dated as of March 20, 2014 (incorporated herein by reference to exhibit 10.2 to the Company’s Current Report on Form 8-K filed on March 4, 2021).
~~10.1~~		Eighth Amendment, dated as of March 2, 2021, by and between TIAA, FSB and loanDepot.com, LLC to the Sixth Amended and Restated Loan and Security Agreement, dated November 28, 2018 (incorporated herein by reference to exhibit 10.3 to the Company’s Current Report on Form 8-K filed on March 4, 2021).
~~10.1~~		Indenture dated as of April 23, 2021, by and among Mello Warehouse Securitization Trust 2021-2, loanDepot.com, LLC and U.S. Bank National Association (incorporated herein by reference to exhibit 10.1 to the Company’s Current Report on Form 8-K filed on April 28, 2021).
~~10.1~~		Master Repurchase Agreement dated as of April 23, 2021, by and between loanDepot.com, LLC and Mello Warehouse Securitization Trust 2021-2 (incorporated herein by reference to exhibit 10.2 to the Company’s Current Report on Form 8-K filed on April 28, 2021).
~~10.1~~		Guaranty dated as of April 23, 2021, by LD Holdings Group LLC in favor of Mello Warehouse Securitization Trust 2021-2 (incorporated herein by reference to exhibit 10.3 to the Company’s Current Report on Form 8-K filed on April 28, 2021).
31.1*		~~Certification of Principal Executive Officer~~.
31.2*		~~Certification of Principal Financial Officer~~.
32.1**		Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of ~~2002~~.2002.
32.2**		Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.0		~~XBRL~~iXBRL Document
101.INS		~~XBRL~~iXBRL 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		~~XBRL~~iXBRL Taxonomy Extension Schema Document.
101.CAL		~~XBRL~~iXBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF		~~XBRL~~iXBRL Taxonomy Extension Definition Linkbase Document.
101.LAB		~~XBRL~~iXBRL Taxonomy Extension Label Linkbase Document.
101.PRE		~~XBRL~~iXBRL Taxonomy Extension Presentation Linkbase Document.
104.0		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

* Filed herewith

** Furnished herewith

+ Confidential information has been omitted because it is both (i) not material and (ii) is the type of information that the Company treats as private or confidential pursuant to Item 601(b)(10) of Regulation S-K. Certain schedules, exhibits and similar attachments have been omitted pursuant to Item 601(a)(5) of Regulation S-K or constitutes a clearly unwarranted invasion of personal privacy pursuant to Item 601(a)(6) of Regulation S-K. A copy of any omitted schedule or exhibit will be furnished supplementally to the staff of the Securities and Exchange Commission upon request.

# Management contract or compensatory plan or ~~arrangement~~arrangement.

* Filed herewith

6053

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


	LOANDEPOT, INC.


Dated: ~~May 10, 2021~~November 9, 2023	By:	/s/ ~~Anthony Hsieh~~Frank Martell
	Name:	~~Anthony Hsieh~~Frank Martell
	Title:	President and Chief Executive Officer

Dated: ~~May 10, 2021~~November 9, 2023	By:	/s/ ~~Patrick Flanagan~~David Hayes
	Name:	~~Patrick Flanagan~~David Hayes
	Title:	Chief Financial Officer

6154


	Common shares issued		Common shares $			Additional paid-in capital			Retained Earnings		Noncontrolling Interests			Total Equity
	Class A	Class C	Class D	Class A				Class C					Class D
Balance at December 31, 2019	—	—	—	$	—	$	—		$	—	$	—		$	—	$	375,885	$	375,885

Repurchase	—	—	—	—		—			—		—			—		(220)		(220)

Equity-based compensation	—	—	—	—		—			—		—			—		(65)		(65)
Dividends	—	—	—	—		—			—		—			—		(1,914)		(1,914)


Net income	—	—	—	—		—			—		—					88,996		88,996
Balance at March 31, 2020	—	—	—	$	—	$	—		$	—	$	—		$	—	$	462,682	$	462,682

Balance at December 31, 2020	0	0	0	$	0	$	0		$	0	$	0		$	0	$	1,656,613	$	1,656,613
Distributions prior to the reorganization transaction	—	—	—	—		—			—		—			—		(160,617)		(160,617)
Equity compensation prior to the reorganization transaction	—	—	—	—		—			—		—			—		338		338
Net income prior to the reorganization transaction	—	—	—	—		—			—		—			—		294,598		294,598
Deferred taxes and other tax adjustments associated with the Reorganization and IPO	—	—	—	—		—			—		(203,741)			—		—		(203,741)
Effect of the reorganization transaction	2,215,687	181,789,329	121,368,600	2		182			121		740,629			0		(740,934)		0
Effect of the IPO	3,850,000	(2,394,000)	(1,456,000)	4		(2)			(2)		—			—		—		—
Effect of the Greenshoe	577,500	(359,100)	(218,400)	1		(1)			—		—			—		—		—
Vested Class C shares	—	709,961	—	—		1			—		(1)							—
Net income subsequent to the reorganization and IPO	—	—	—	—		—			—		—			44,875		88,380		133,255
Stock based compensation subsequent to the reorganization transaction	—	—	—	—		—			—		24,607			—		34,872		59,479
Distributions for state taxes on behalf of shareholders, net	—	—	—	—		—			—		—			(2,463)		(3,504)		(5,967)
Balance at March 31, 2021	6,643,187	179,746,190	119,694,200	$	7	$	180		$	119	$	561,494		$	42,412	$	1,169,746	$	1,773,958


	December 31, 2020
	Carrying Amount		Estimated Fair Value
			Level 1		Level 2		Level 3

Assets
Cash and cash equivalents	$	284,224	$	284,224	$	0	$	0
Restricted cash	204,465		204,465		0		0
Loans held for sale, at fair value	6,955,424		0		6,955,424		0
Derivative assets, at fair value	647,939		483		107		647,349
Servicing rights, at fair value	1,127,866		0		0		1,127,866

Loans eligible for repurchase	1,246,158		0		1,246,158		0

Liabilities
Warehouse and other lines of credit	$	6,577,429	$	0	$	6,577,429	$	0
Derivative liabilities, at fair value	168,169		4,299		163,566		304
Servicing rights, at fair value (1)	3,564		0		0		3,564

Debt obligations:

2020-VF1 Notes	7,571		0		8,593		0
GMSR VFN	15,000		0		15,000		0
Term notes	198,640		0		200,000		0


Senior notes	491,255		0		518,245		0
Liability for loans eligible for repurchase	1,246,158		0		1,246,158		0


	Three Months Ended March 31, 2021
	Interest Rate Lock Commitments(1)		Servicing Rights, net(2)

Balance at beginning of period	$	647,045	$	1,124,302


Total net gains or losses included in
earnings (realized and unrealized)	388,548		642,421
Sales and settlements
Purchases	0		0
Sales	0		(635)
Settlements	(593,703)		0
Transfers of IRLCs to closed loans	(195,112)		0
Balance at end of period	$	246,778	$	1,766,088


	Three Months Ended March 31, 2020
	Interest Rate Lock Commitments(1)		Servicing Rights, net(2)		Contingent Consideration

Balance at beginning of period	$	128,208	$	444,443	$	(2,374)


Total net gains or losses included in
earnings (realized and unrealized)	555,067		(5,300)		(2,507)
Sales and settlements
Purchases	0		0		0
Sales	0		(7,279)		0
Settlements	(259,455)		0		0
Transfers of IRLCs to closed loans	(109,083)		0		0
Balance at end of period	$	314,737	$	431,864	$	(4,881)


	March 31, 2021		December 31, 2020
Current loans	$	127,255,772	$	100,358,713
Loans 30 - 89 days delinquent	570,091		709,946
Loans 90 or more days delinquent or in foreclosure	1,884,029		1,862,599
Total servicing portfolio (1)	$	129,709,892	$	102,931,258


	March 31, 2021
	Net carrying amount of total assets		Carrying amount of total liabilities		Maximum exposure to loss in non-consolidated VIEs
Consolidated variable interest entities
Mortgage loans & restricted cash	$	2,214,663	$	2,200,000	N/A
GNMA mortgage servicing rights	355,565		213,791		N/A
	$	2,570,228	$	2,413,791
Non-consolidated variable interest entities
Joint Ventures	$	10,414	$	7,439	$	17,332


	March 31, 2021		December 31, 2020
Amounts (payable) receivable from joint ventures	$	(3,909)	$	2,196


	Three Months Ended March 31,
	2021
	Shares	Weighted Average Grant Date Fair Value


Unvested - beginning of period	0	$	0
Granted	2,925,000	26.45
Vested	(2,215,687)	26.45

Unvested - end of period	709,313	26.45


	Payments Due by Period(1)
(Dollars in thousands)	Total		Less than 1 Year		1-3 years		3-5 Years		More than 5 Years
Warehouse lines	$	8,309,450	$	6,709,450	$	1,600,000	$	—	$	—
Secured credit facilities	224,401		24,401		200,000		—		—


Operating lease obligations	95,495		28,187		39,128		18,702		9,478
Naming and promotional rights agreements	136,827		24,720		44,168		39,939		28,000
Total contractual obligations	$	1,556,723	$	77,308	$	283,296	$	558,641	$	637,478


(Dollars in thousands) (Unaudited):	Three Months Ended
	March 31, 2021		March 31, 2020
Unrealized gains from derivative assets and liabilities	$	209,386	$	29,981
Less: Unrealized gains (losses) from derivative assets and liabilities—IRLC and LHFS	328,322		(20,517)
Unrealized (losses) gains from derivative assets and liabilities—servicing rights	(118,936)		50,498
Realized gains (losses) from derivative assets and liabilities	105,643		(54,361)
Less: Realized gains (losses) from derivative assets and liabilities—IRLC and LHFS	99,636		(56,759)
Realized gains (losses) from derivative assets and liabilities—servicing rights	6,007		2,398
Realized and unrealized (losses) gains from derivative assets and liabilities - servicing rights	$	(112,929)	$	52,896