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Losses continue to mount at beleaguered mortgage lender loanDepot, which posted a $157.8 million fourth-quarter loss Wednesday despite cutting its payroll by more than 6,000 employees last year.
For the full year, loanDepot racked up a $610.4 million 2022 net loss as rising mortgage rates cut into the company’s lucrative refinancing business and revenue plummeted 66 percent to $1.26 billion. Although loanDepot managed to trim expenses by 36 percent from 2021 to 2022 to $1.95 billion, that was still far less money than came in the door.
“The size of our targeted reductions and the bias for speed of implementation reflect just how unique and sizable this market downturn has been,” loanDepot president and CEO Frank Martell said in a statement.
The Irvine, California-based lender ended the year with 5,200 employees, about 6,100 fewer than the 11,300 it started with. Continued staffing cuts — the company trimmed about 900 jobs from the payroll during the final three months of the year — and reduced spending on marketing helped loanDepot slash $91.4 million in expenses during the fourth quarter, a 21 percent reduction.
Frank Martell
“We believe that the mortgage market will remain challenged in 2023 and we must remain vigilant and respond quickly to unfavorable changes in the market,” Martell said. “We plan to continue to reduce our costs and optimize our operating model. With a sizable cash balance, we believe we are positioned to continue to invest in our people and platforms, as we benefit from ongoing industry consolidation.”
LoanDepot, which is engaged in a proxy battle with founder Anthony Hsieh, finished the year with an $864 million cash balance. The company’s leadership team projects it will originate between $3 billion and $5 billion in loans during the first three months of 2023 — a surprisingly wide range given that the first quarter will be over in about three weeks.
LoanDepot mortgage originations, by purpose
Source: loanDepot regulatory filings.
During the last three months of 2023, loanDepot originated $6.4 billion in loans, down 35 percent from the third quarter. Purchase loans accounted for 76 percent of loanDepot’s fourth-quarter loan production, up from 70 percent during the third quarter and 34 percent during the fourth quarter of 2021.
Shares in loanDepot, which have traded for as little as $1.25 and as much as $4.47 over the last 52 weeks, were essentially unchanged from Wednesday’s closing price of $1.89 in after-hours trading following the company’s earnings release.
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