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LoanDepot executives say they’re in a better position to grow after restructuring debt and boosting second-quarter revenue to the highest level since the start of the 2022 market downturn.

But $27 million in expenses tied to the pending settlement of a January cybersecurity attack affecting nearly 17 million clients weighed on second-quarter earnings, with the Irvine, California-based lender posting a $65.8 million net loss Tuesday.

That’s down 8 percent from the $71.5 million net loss loanDepot racked up in Q1, with net revenue growing 19 percent to $265.4 million. Excluding a $12.6 million write-down in the fair value of loanDepot’s mortgage servicing rights portfolio, adjusted total revenue rose to $278 million — the highest mark in two years.

“During the second quarter, by most measures, we delivered our strongest operational results since the beginning of the market downturn that began in the first quarter of 2022,” loanDepot President and CEO Frank Martell said in a statement. “As we near the completion of our Vision 2025 strategic plan, which was launched in July 2022, we have dramatically improved our operational results while positioning the company for long-term success.”

Shares in loanDepot, which in the last year have traded for as little as $1.14 and as much as $3.47, were up 4 percent to $2.15 in after-hours trading following Tuesday’s earnings release.

LoanDepot mortgage originations by purpose

Source: LoanDepot earnings reports. 

At $6.09 billion, loanDepot’s Q2 mortgage originations were essentially unchanged from a year ago. But purchase lending picked up 33 percent from Q1, to $4.38 billion, and refinancing grew 35 percent to $1.71 billion.

“This quarter, the company continued to build our in-market retail franchise, which contributed to our expanded margins and market share growth,” Martell said. “In addition, we believe the company is increasingly well positioned to capitalize on the record levels of home equity available to homeowners for debt consolidation and home improvement, as well as the inevitable increase in rate and term refinance volume as mortgage interest rates are expected to decrease.”

LoanDepot reduced its debt load by $137 million and extended its maturity to 2027 through a tender and exchange of $500 million of corporate notes that were due in the fourth quarter of 2025.

It accomplished that feat in part by selling $29 billion in mortgage servicing rights (MSRs), leaving loanDepot with a $114.3 billion MSR portfolio as of June 30, a 20 percent drop from March 31. The nation’s largest mortgage lender, United Wholesale Mortgage, is pursuing a similar strategy on an even larger scale, trimming its MSR portfolio by $110 billion this year.

LoanDepot nevertheless continues to collect monthly mortgage payments on 403,302 loans on behalf of investors, earning $125 million in Q2 servicing fee income.

Trimming its MSR portfolio and restructuring its debt left loanDepot with a stronger balance sheet, including $533 million in cash.

The $26.94 million in expenses related to the January cyberattack recognized by loanDepot in Q2 bring the total cost of the attack to $41.6 million after factoring out expected insurance recoveries. Those expenses include the cost to investigate and remediate the incident, costs of customer notifications and identity protection, professional fees including legal expenses, litigation settlement costs and commission guarantees.

During the second quarter, the company set aside $25 million in connection with an expected settlement of a class action lawsuit related to the cyberattack.

David Hayes

LoanDepot reached “a settlement in principle” and is currently negotiating the terms of a settlement agreement that’s expected to be submitted for court approval later in the third quarter, Chief Financial Officer David Hayes said.

“We believe the settlement will remove significant uncertainty for our stakeholders going forward,” Hayes said in a statement.

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An unusual, bulletproof Ohio home, left as part of the $54 million estate of the late Trudy Stranahan, is now under contract after multiple offers, the New York Post has reported.

Jon Modene of RE/MAX Masters has the listing.

The home was first listed for $399,900 over two weeks ago. Modene refers to the home as having “the strangest and greatest potential I have ever seen” — not surprising given the property’s features or lack thereof.

The single-family home sits on a 5.08-acre lot with $100,000 worth of fencing and over $300,000 worth of concrete. The property is windowless, and although there is no security system, every surface of the home is covered in Lexan, a material said to be both bulletproof and fireproof.

Modene told Realtor.com that the home is located in a low-crime neighborhood.

According to the New York Post, Stranahan belonged to the prominent family who founded the Champion Spark Plug Company in Toledo, Ohio. Stranahan spent much of her time alone at the compound, as she was said to have had no children, friends or pets.

The compound, located at 1360 Old Trail Road in Maumee, Ohio, was built by architect Ralph J. Copper in 1953. Prior to her death from cancer in 2023, Stranahan poured thousands of dollars into the compound. She left behind a $54 million estate.

In a statement to the New York Post, Modene stated that the home stands on an “amazing lot,” with perks including a “private shared lake.”

The compound stands right outside of Toledo, Ohio, on Silver Lake, bordering Metropark. The home itself stretches 3,355 square feet with three bedrooms and two bathrooms, one of which is mirrorless. Other features include two outbuildings, one of which is a spacious home gym where Stranahan spent most of her time.

There was also an Olympic-sized backyard swimming pool that Stranahan had filled in.

Modene told Realtor.com that many of the people who expressed interest in the house said they would likely tear it down or remodel it upon purchase.

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Divorce proceedings can be complex and exhausting as every financial move is scrutinized and each asset evaluated. Amid all the details, credit reports can be a powerful and often underutilized tool that can distinguish between a fair conclusion and a financial disaster. They are a fundamental part of financial transparency and fairness and provide information that can alter case decisions.

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For real estate agents, understanding the financial situation post-divorce is needed to facilitate better your client’s needs with property sales, new living situations, etc. As an expert, it’s a best practice for agents to recognize that professionals best handle all financial matters, and to point the clients in the right direction in the early stages of discovery in divorce legal proceedings. 

Insights revealed by credit reports

Credit reports offer a wealth of valuable insights. They can reveal hidden debts, distinguish between marital and separate debt, show violations of court-ordered payments and provide assessments of someone’s creditworthiness. Credit reports can also provide an overview of a person’s financial history, including details like revolving credit accounts, installment loans, bankruptcies, unpaid child or spousal support, and collection accounts. This provides a holistic understanding of both party’s finances, ensuring fair asset division and post-divorce financial planning.

Hidden debts, for instance, can often go undetected and are liabilities that can significantly impact the division of assets and finances after a divorce. Uncovering debts early on provides a more accurate assessment of each spouse’s financial obligation and ensures a more fair and transparent negotiation process. 

In many marriages, couples have joint accounts and debts. Credit reports can help unravel these intertwined financial commitments, clarifying each party’s obligations and facilitating fair resolution. This includes determining responsibility for joint debts and ensuring equitable distribution of shared assets.

The distinction between marital and separate debt provided by credit reports is also crucial for a fair split. With this information, clients can be confident they are only assuming responsibility for debts gained during the marriage and are not burdened with pre-existing liabilities. 

Financial disclosure requirements

Many jurisdictions require parties in divorce proceedings to disclose their financial information fully, like many U.S. states, including California, Florida and Texas. Credit reports serve as a vital component of this disclosure process, providing objective data on debts, assets and financial history. By adhering to these disclosure requirements and presenting accurate financial information, clients can uphold their legal obligations and promote transparency.

Prevalence of unauthorized credit activity

One of the main reasons clients need to monitor their credit reports during the divorce process is the prevalence of unauthorized credit activity. It’s not uncommon for someone to receive credit in their spouse’s name without their knowledge. Consistent credit monitoring provides early detection of suspicious or unauthorized transactions. By doing this, clients can prevent financial harm and protect their credit during a divorce.

Monitoring credit reports with National Credit Bureaus

Clients should monitor their credit reports with all three national credit bureaus — Experian, Equifax and TransUnion — as not all creditors report to every bureau. Platforms like AnnualCreditReport.com offer free access to credit reports from each bureau annually. Signing up for credit monitoring services can also provide continuous monitoring and alerts for suspicious activity or changes to a credit report. Setting up fraud alerts with credit bureaus can add an additional layer of protection by notifying clients if there is a request for new credit in their name. 

Following these steps can help clients stay vigilant and proactive in monitoring their credit health and detect any issues early on. 

Safeguarding against unauthorized access

Unfortunately, it’s not uncommon for the opposing party in a divorce case to attempt unauthorized access to their spouse’s credit report, even though this is illegal. This can lead to the misuse of sensitive financial information to open unauthorized accounts, obtain loans or even identity theft.

To safeguard against this, real estate agents can recommend their clients take proactive steps, such as freezing their credit reports. This prevents new creditors from accessing information without explicit permission. 

Empowering clients and ensuring fair outcomes

Credit reports serve as invaluable tools not only during divorce proceedings but also in empowering clients to navigate their financial landscape post-divorce with clarity and confidence. Gaining a holistic understanding of their financial standing enables clients to strategically plan for their future, setting them up to secure loans, effectively manage debts and improve their credit. 

Integrating credit reports into divorce proceedings isn’t just advisable; it’s essential. Shedding light on hidden debts and detecting unauthorized activity ensures fairness and transparency in negotiations. They also empower clients to make informed decisions about their financial future and pave the way for a brighter monetary outlook beyond the conclusion of their marriage. 

Lindsey Harn’s results-driven approach, work ethic, integrity, and honesty have earned her top-producer status. Connect with Lindsey on Instagram and Linkedin.