loanDepot narrows Q2 net loss as home equity lifts margins

loanDepot reported a sharply narrower net loss in the second quarter as the lender expanded its home equity business, increased loan production and improved operating leverage.

The company posted a net loss of $6.6 million for the second quarter ended June 30, compared with a loss of $54.9 million in the first quarter. Revenue increased 18% from the prior quarter to $337.3 million, while loan origination volume rose 4% to nearly $8 billion.

The company’s earnings results for Q2 2026 closely follow a call from retail activist investment firm Randian Capital for loanDepot’s board of directors to launch a formal review of strategic alternatives. In an open letter to the board, Randian cited that loanDepot’s stock has declined more than 90% since the company went public in February 2021 at $14 per share and said that broader economic conditions do not explain loanDepot’s “prolonged underperformance.”

loanDepot previously told HousingWire it had no comment and its leadership has framed 2025 and 2026 as a multi-quarter rebuild. And despite its stock performance, the company recently announced plans to expand its physical footprint, saying it would open a Miami corporate center in September that will house technology, marketing, recruiting and other support teams.

In its earnings report, the company said its expansion into home equity lending helped drive a 25% increase in loan units from the first quarter. The company’s pull-through weighted gain-on-sale margin increased 74 basis points to 3.45%, supported by a greater mix of higher-margin home equity and government loans.

“When I returned as full-time CEO one year ago, I set a clear transformation agenda to position loanDepot for profitable market share growth in any macro environment,” founder and CEO Anthony Hsieh said during the company’s earnings call. “We have moved decisively to reshape the business and are starting to see signs of our progress.”

He continued, “In the second quarter, revenue increased, operating leverage improved, and our net loss narrowed substantially, even as interest rates rose meaningfully, beginning in March.”

The company’s expenses increased less than 1% from the first quarter to $343.9 million. loanDepot said cost management and a more efficient product mix contributed to improved operating leverage.

Adjusted EBITDA increased to $20.5 million from $14.3 million in the prior quarter. The company reported an adjusted net loss of $29.2 million, compared with an adjusted net loss of $33.6 million in the first quarter, which Chief Financial Officer David Hayes attributed during the call “primarily to higher adjusted revenue, while limiting expense growth to primarily volume‑related costs.”

Home equity lending has become a central part of loanDepot’s growth strategy as higher mortgage rates have limited traditional refinance opportunities. The company said home equity products allow qualified homeowners to access liquidity without replacing an existing first mortgage with a higher-rate loan.

loanDepot also continued to expand its core mortgage business through additional builder partnerships and retail branch locations. Purchase loans accounted for 57% of total originations during the quarter, up from 41% in the first quarter.

The company’s servicing portfolio grew to $123.4 billion in unpaid principal balance, up 2.2% from the first quarter and 5% from a year earlier. The portfolio included 465,089 loans at the end of June.

Hayes said loanDepot monetized approximately $10 billion in mortgage servicing rights after the quarter ended as part of its effort to maintain liquidity.

“The benefits of our product mix shift were evident in higher revenue, stronger pull-through weighted gain on sale margin and an improved bottom line,” he said in a statement. “We also continue to evaluate opportunities to optimize our capital structure. Addressing the Company’s bond maturities remains a high priority for management, and we are evaluating a range of options with the support of retained advisors.”

During the quarter, loanDepot repurchased $16 million of senior notes at an average price equal to 90% of par value. After the quarter ended, it repurchased an additional $27 million of notes at an average price of 86% of par through July 30.

For the third quarter, loanDepot expects loan origination volume of $6.25 billion to $8.25 billion and pull-through weighted gain-on-sale margins of 3.60% to 3.90%.