loanDepot (LDI) 8 Aug 212021 Q2 Earnings call transcript

Good morning and welcome, everyone, to loanDepot's Second Quarter Conference Call. All lines have been placed on mute to prevent any background noise. [Operator Instructions] I would now like to turn the call over to Gerhard Erdelji, Senior Vice President, Investor Relations. Please go ahead.

Good morning, everyone, and thank you for joining our call. Relations at Investor Erdelji, Gerhard Officer loanDepot. here I'm second we will results. loanDepot's discuss Today, quarter

to financial share highlights excited are We our quarter you. of results with the other and

this loanDepot, and like webcast Before a and I operating posted Events website are A SEC. and as future the statements to our based conference answer will in and Investor company's and call Founder, performance investors.loandepot.com These Financial an remind regarding your call we Anthony the at of Presentations may Chief question. provide to would everyone periods. outlook, begin, financial be on forward-looking include company's and Officer, that tab. statements with the that from the Relations results are financial these well Factors our company's available and periods future and expectations of Flanagan, have or transcript Risk for On the this other CEO, our in information. risks as today's described to overview Actual factors Hsieh; our statements operational results, the section under on we quarter call, forward-looking filings differ current Patrick due to materially may of Chairman

turn markets also after our Analytics prepared Jeffrey joined are Chief things questions might started. have chief Walsh, to any the you Anthony? I'll capital over get by us John to our remarks. our Jeff We with Chief Lee; Officer, DerGurahian; officer, Anthony Officer, Revenue our and help to that, with And

I mortgage XXXX. my XXXX, What answering of Thank you the pandemic, in of of the arguably questions. everyone. look Thank the unique fueled us. by you, today. in on to circumstances you was the the and the I'm be pleased joining sharing your call strongest history, comments to in ended quarter forward all market second morning, good and Gerhard, for with

diversified, in what This While other purpose-built is for see moment was a opportunity at-scale like shine. loanDepot see loanDepot will marketing this time. we headwinds, powerhouse precisely because

continuing machine us In XX.X% contacts in one share market and time impressions for year-over-year a like leaving and go to It's and Our also purchase joint Slam, Based the are this period, increases get aggressively designed offerings efficiencies achieved loan attractive operational the Mortgage interest in on recruit result X.X%, business our customer our are and that rates and marketing are just succeeding increase models to to on to growth from we of investing new And model volume, X.X% us focusing was launch on XX new when grow capitalize evidenced of the after do Bankers market science data learning It loanDepot as the quarter-over-quarter and fat. Grand ventures and while top-of-funnel all easy additional to product to high of changing Association, backbone. by powerful market year model landscape. officers, as reach. past volume our low, is the took widened future. dramatically technology our our is share to margins to the over years same data in year. we look and the

a scale, brand, markets technology precisely model. in not offerings when that's market reach, will when originations suite And delivering be we interest margins and origination service However, shareholder vanish. with share exposed. that like rise, weaknesses successful Companies of When shift, or shrink rates our gain and customer are diversified value. brand, and diversified

increased from the overcapacity lower gain-on-sale of particularly in margins wholesale mortgage channel. we resulting Looking across providers, partner in pressure, competitive the see landscape

markets shifts. have proven We the consolidate will noted industry toward previously as that leaders

some fact, in competitive that we withstand pressure can the apply will actually to landscape. We and, pressure

of relatively our to versatility nimbleness it, can. Our any we compression particular that our a advantage share. it's affording a scale leverage channel, power, competitive profitably at purposely margin and marketing us Because against demonstrate few massive fully us diversified origination ability take model and guards to market

Our lending market of partner marketing and officers machine is as one direct loan feed our end and our well teams. as successfully greatest able assets to our

today. become have we nimbly Home drove Everything low our popular increase successfully mortgage helping balance X% XX% Recognition in Our past second it quarter. organic in deliberately the purchase and ability over transaction quarter, increased Complementing in over and recognized traffic an website the which to year-over-year XX% brand, quarter our is Means way our invested the customer Campaign, industry acquisition our brand brand. volume. of this our our Thanks in skill increased and quarter-over-quarter most has XXX% production that to

XXX In We broadcast League quarter. Major million break. our impressions passed second Baseball our national addition over served the in just with the campaigns, to all-star partnership

so real home bundled Championship later with buyer Disruption additional that seller without simplify transaction. cost. the our or the better series a And stressful with market year, substantially easy-to-navigate this expect is estate today to complex approaching about all and Lead recognition brand serving we grow services the in

To While with powered others assets to announced our the loanDepot purposeful a the by cannot of service that and Slam real strategic side, bundled mellohome. industry-leading, that have our Grand of customers of the end, most we power we our use our competitors launch create for and top-of-the-funnel touch. simply companies recently and sister the approached loanDepot this digital estate other scale from marketing power

As estate companies through most a and of you services umbrella. mellohome sit constellation mortgage underneath services We through loanDepot. real know, provide important loanDepot of

years increases executed and title, organic and of has services Act increase escrow into for addition, and the points, with one in are on their our This customers interaction touch experience Grand journey. This our homeownership bundles top-of-funnel all transaction. we is Constant wheel package revenue simplify and our easy We're to Today, many complete provide to these digital also our CUSA through services entire journey a of items, acquisitions each each velocity. of throughout necessary and us customers insurance commerce company. more greater and the companies, and spend. serving build. ultimately strategic committed of and a throughout delight loanDepot strategy which return company for In homeownership mellohome. The will homeownership leverage customer's Slam with for provide closing been mortgage the via effect closing fly multiple than loanDepot to through and marketing our

homeowner And significant here so statements true can trusted we vision a after in represents to We're loanDepot long remaining our value very exceptional transaction customers. to home intentions, The financing is complete. growing and fulfillment world. loanDepot. and enthusiasm the provide and become our deliver ways we toward an and reason are and the uniquely return energy Slam will our abilities, company positioned our us a at public step Grand to do, which most in the the they about There's for to initial

we that the proud of we progress, While much are just our fact getting started. our derived of is are from energy

for Pat? our new CFO, to our you We ultimately, further accelerate looking what that, our am always take will our more future I detail. Pat team, are shareholders. results holds over opportunities customers, through and With and for long-term financial in Flanagan, strategy. about our I'll grow our to who things the excited turn

and everyone. good morning, Anthony, Thanks,

since company, and proud commitment thanks what We hard our are of coming and in achieved our Team work of IPO we've this I'm both a to continuous our during mark period of time excited on six-month public February, loanDepot. and short up as

$XXX total we reality. is per revenue the million, lower $X.XX, industry quarter, share volumes of overall origination reported per earnings adjusted of which and and reflecting This diluted gain-on-sale diluted reflective of of share $X.XX, earnings loan margins,

origination loan from quarter, second volume billion, decrease of the in XXXX. a of XX% So was quarter first $XX.X the

strategies Partner $XX.X loan and of delivered of originations refinance Retail Our that period. loan and $XX.X purchased billion originations billion during

technology originations accounted as well process, channel the contributions to channel loan accounted customer relationships the both over of across originations. The underwrite, built loans have retail channels broker the partners mortgage customer of platform and our partner and mello time exceptional with XX% our of our for experience. we Our delivering innovative in-house for both signify to our our mortgage XX% fund originated and and while effectiveness as strong loan consistent

billion the is of first of trend industry, mortgage loan lower from that's broader the volume second to resulted $XXX leading Our margins. total a result The of $XX.X XX% decrease the revenue revenue quarterly industry lock rate decrease quarter in gain-on-sale of quarter. for million, represented a which origination in and in the volumes

quarter. second of decreased lower variable incurred the for quarter expenses from quarter by of origination XXXX in the IPO-related total first due first expenses primarily XX% volume loan and the expenses Our to XXXX, on

have cost-cutting implemented which results primarily realized initiatives, also we of the XXXX. second to expected half in of We be

capabilities. operational allow composition adjust processes by our originations during to technology-driven to demonstrated or market our as quarter, changing expenses adjust loan in pipeline our purchased balance increase load conditions our the to Our us

entire prepayment So, -- customers this complements grew $XX.X unpaid now of the of ensures not XXXX, as hedging during record the by our billion $XXX.X value of serve of we to Also, rights This high fully interest can growing experienced $XXX.X portfolio sale servicing expense rates. level quarter. portfolio to of origination servicing mortgage journey. unpaid quarter. principal was This of a offset strategy amortization our XX, of the fell level is balance gross balance low and to billion rate in change completed billion higher levels in instruments mortgage a volatility. higher principal from rates perfectly our growth longer-term a our The first continuing was that interest compared environment the as servicing of inclusive our June in of fair our through result

these recapture quarter of XX% to Fortunately, increased to highlighting direct retain strength we customers the refinance rate the were for organic XXXX many to as relationships. of of as customer able our consumer compared our first XX%

was primarily on $XXX.X progress reported the compared of million and in-house of We relatively adjusted quarter-over-quarter $XX.X million was and driven EBITDA subservicing backdrop this first The gain-on-sale relying margins of income rate volume. million servicing because net quarter in third-party portfolio our and against XXXX. $XXX.X of of the of decrease very proud million less growth are the and for to growing decline partners. our good as We lock by $XXX.X

decline through smaller reflecting of a net than business. strength exhibited income, EBITDA our adjusted core the Importantly,

look interest volumes, and rates, rate third company and July material building our our officers lock recent assuming competitive in and quarter growth addition landscape, rates changes strong decrease on interest the the production billion, partners. we $XX Anthony out the As and to of in between no ahead and the venture and billion joint expects that have laid volume loan of reflecting strategies $XX

expect between also and we margins $XX gain-on-sale of volume. origination XXX and of between $XX quarter We XXX loan expect origination third billion volume billion, points basis and

closing me Anthony over it Now, to comments. let for turn some back

Thank you, Pat.

a just our take we results proud and before say team quarter. the want So, that and moment turn questions, I'm to this to I of

or our and will loanDepot win. exceptional to adjacent service, accomplished has and through companies never diversified and confident expansive selling our and homeownership proprietary to of customers of remain strategy and loanDepot services. serve proprietary As our as one power, journey, will all we thanks even strategy, am our marketing buying I on real its deliver, our choices experience, stage reimagine with estate-related as the on very and technology, services suited satisfied uniquely proud non-mortgage technology and and powerful We loan customer that how through that we laurels. as and is set to is an origination loanDepot offering and customers that capabilities focused robust what company services continue a ancillary data, affiliated acquisition home I top-of-the-funnel our more will am of providing of about products will rest analytical every be

diverse and and sophisticated capabilities some the the assets of in today. most are industry Our

wisdom, and drive, collective delight what shareholder value. about unending curiosity our We also our subsequently, and our stream continue relentless is and customers to offerings use revenue and diversify possible to deliver employees,

will grow we we recruiting During our growing to vision our long-term our loan in focus continue share. officers this our and our we offering brand, year, technology continue market public initial earlier in told to aggressively investing as you

years promises in demonstrate see continuing commitment then quarter quarter deliver principles those come. and on our this to the results those to you'll and to Our us

turn Now are it that, back the to ready Q&A. with to for Operator? we operator

the [Operator Instructions] question Harter Your Doug line first comes from of Credit from Suisse.

line Your is open.

a little progressed First how off, quarter July? margins gain-on-sale second of into the throughout have you could talk about just more bit kind hoping

is Pat. Thanks, Doug. This Sure.

because multiple think products in that XXX we're confident So and the between both in of higher we seen by that channels, offer margins. that it's for I of allowing the we the a in recovery us including XXX, flexibility quoted, we've at and our and – And as also that representative factors, different range of in to have stated a expanding and provided we our range June seen significant we retail, partnership that -- guidance product recovery July July the offerings. and combination

just seeing whether talk as of we're how Great. these where And that thoughts rate, we starting of you to and are into kind to refi you're this about today? level putting see rates of at to then, can consumer lower burn response context out

Doug, it's Anthony.

of So questions I a there. think there's couple

rates we increase so our non-rate refinance. in month that some interest with First, company term seen the importantly, or reducing the bit shifted an and But last over refinance have our of demand. more has marketing toward a

and, consumers rate-sensitive, such that home are those So lending. for consolidation, course, as interest out debt improvement less cash of purchase

eleven ever customers amount history. a substantial our our of level So And just -- half from interest than are more there customers. is and XX-year our we year to talking in a

leads developed brand a history. more by our year in that our our seeing and and are being eleven team half We marketing

really there's the of funnel. our at So top plenty

we're It So very still change environment you're happens ultimately, continues a of the of sort expense funnel. a the out will this on and that the return. and to temporary. margins margins The customer as top capacity, during bullish always is are well The to active. as as an very then seeing neutralize and today demands is very margin how industry very, time capacity

you, Anthony. Thank Great.

Of course.

Jefferies. Your Ryan Carr question the next from line of comes from

Hi. for my Good taking question. morning, guys. Thanks

First guidance. one the is on

retail you're shift, in then and touch improvement that an on of is up channels? mix versus in XQ so the of shift for those you trends guiding competitive Thank a the XQ. key guide curious, the much margins so You're channel is caused And seeing I'm mix you. kind two gain-on-sale function across just can dynamics? of on that how

on purchase the this channel Walsh. compositions margins. in as purchase, pipeline the And We're Yes. refi into year end on increase purchase to seeing is that What of of think, Q markets. Jeff market our are the the XX% over ability the we in take higher. watch XX% both volume we're of retail positioned, nature and in see we of is well our Q And we're advantage I over hold seeing kind then -- to year shift to and of because purchase side, margins the transaction

to margin advantage that dynamic And either be so whatever -- the to allows definitely take side. market but able diversification gives retail we're us, us the seeing of the on the of

Ryan, Anthony. Hey, it's

to Jeff's context. on and comments some add just me Let provide

sort So a what the decoupled. on and change distribution that or different kind of is this the is start the first out its is rest today of a I'm trend margins where should and basis. And industry models is through and go-forward seeing trying to the margins

be how product. it's be different You I've and selling channel same others. have one see exact to that from channel not would one it is seen another, the margins before interesting to is sustainable but for versus the it industry decoupled that adjusts when not

percent VA, XX-plus through and still today industry seeing Fannie is FHA, the mortgage the fueled that fundings mind in keep by of we're Freddie. Now that

is that the same margin has product decoupled. So different profiles it been with

vacated XX% share All this the is when post-financial crisis, of fact countrywide new fell. and a market it that

the So grab that substantial market to margin but share, here interesting, land behavior and sustainable. lenders that's not some for our is race category-leading we're decouple mass seeing and

we're that So pretty watching carefully.

the on expense then you. specifically Got side. it. a up, follow And just quick Thank

yourself kind do of for normalized where that, of you volume you as bulk are a a percentage this year Your play? those basis more but -- back within know income expense see XXXX? noted to from a into environment? I of in getting see where so next toward pre-tax do half cuts what year, for think of you And the the going about the you come

Ryan. Yes,

but in the and to allows through So and work where around reducing XXXX back we see sales our out it roll costs next pipeline business savings the we mentioned in and cycles. the going as of as expenses by the with be expense the guidance primarily think the technologies, the processing the into it's in cost and you'll you between the spending but driving of changes the interest continue overtime would provided have we specific the mix we components largely roll appropriately in us technology people. haven't additional variable backlog staffed in to house, primarily expense groups, changes continued people on year in I in the rate variable any reductions focus fulfillment -- year of on to we're is cost very when out volatility of toward of IPO those we focused driven we and to continue see expect half more and process, out particularly during that And reduce and as fulfillment the to this efficiencies efficiencies in yet, side personnel

very much. Thanks

comes Manu question of Srivareerat next Your from the line from UBS.

open. is line Your

guys. on Good everyone? Brock I'm is this How morning, Vandervliet for morning.

good, We're are you? How Manu.

Not volumes bad. I the that's last looks and on your Any [ph] function thoughts share market purchase saw, other that whether in had the a in Not factors like or pressure banks getting a question industry? were on the we who Acknowledging quarter. share share. on quick just bad. it whether of refi it's market

Manu, it's Anthony.

at fact diversified our six years to lot in disciplined year XX the the average months to arguably of the A most in last a our is very We've XX that six diversified on history. contemporary the channel, continue that share origination be to grown market XXX%. months. on compared year-to-date of loanDepot substantially times. we we've we've We've six grown by last months. year first So for this our to as grown of And XX% volume the volume grown

partners. building very and partners, on that, addition officers, We officers, cost. continually consistently loan direct brand helps we've ultimately drive That brand and our to us joint disciplined have And acquisition and in loan broker down our venture lending recognition. mortgage in-market customer been

on think conceding it consolidation are going has consolidate. in for you're capacity And XXXX any buildup consolidating our we beneficiary certainly last to share as going to confident to as continue shifted be see organic a of in market that the months, banks for the believe are I the market continue to that non-bank So nonbanks. channels and of And I to builds in going X we well lenders be community, The started market this very of but is we're massive nonbank aggressive to the to lookout happen. all into that's a acquisition opportunities. look continue while

for Okay, sounds you people willing And, which a quarter, many was to one sell dollar would good. Thank that comment that you [indiscernible] color. for $X.XX. bill be Anthony, that last no

And within quarters this can down that, or this the capacity color -- talking Is road? long my here guess I so any question persist? excess we is how are a are on talking year we the industry

will rest. XX-year It depends on where the

So But purchase that increased got as of mortgage of certainly some of lower kind it, And we result a we've inventory. of market because lack volume some back. had challenges on because of a of volumes.

the So, pressure. we fact like is there that

for $X.XX no thing bills is a companies that don't dollar for selling proper like earnings. these that is that Certainly, one So We likes. good have strategy. away giving the something

share we in the is value amassing However, that create market substantial.

that my think exactly is by how a to it, And massive. is the know the can our margin which, provide way to withstand we tool we my that the significant, cannot market addressable additional way. So guidance is, way, be. is And to much barrier on put amass the pressure. of -- more ultimately, entry competitive over wants temporarily are same is I but on reflection to And all to pressure The and we long-term want of some guidance, you. team a I'm And of we and strategy. sort of market think very that as lenders competitors total our share it that then provide against the use, I to

long, in nine-inning and of a the long bottom This to very, the So ways we are game, a first and very this is go. inning, temporary. there's is

guidance guys. the won't I well. that do Thanks for appreciate time as I -- the the Got this morning, you. Appreciate color. say I

welcome. You're

next Barker from comes Kevin from Piper Your the line of question Sandler.

Your open. line is

my margin, that? guidance, weighted not Good I is regard morning. the taking on margin. clarify clarify wanted the for Thanks that gain-on-sale gain-on-sale right, Could In you pull-through gain-on-sale questions. to stated to X.XX just

Kevin, funded lot is a that on pull-through not [ph]. origination, loan

to So you have $XXX million, it right? $XXX $XXX up the to million going from million,

correct. That's

focused hedging that this margins the originators what quarter retail XX that caused there then quarter over mostly And points went seen ones occurred on just that in anything OK. retail basis other on it? or than volume, that from which may weight? retail any Was with down that a there -- additional impacted quarter like the of channel. are the seems drop or And gain-on-sale funded heavier pull-through have may was particular something have we've

No.

of that quarter I what carried the in is loan funded over was that between think locks volumes into were prior reflective difference that from the more the quarter. current

But So release, X.XX for look not press the when gain-on-sale pull-through we breakout? the at during was at margin quarter. that there when in show variability blocks channel it do you occurred on -- the the -- less sure, we give weighted I'm

think artificially it's I the largely differences low that -- that be lower. show timing or it So, -- to was

Okay.

look the weighted like If relative X.XX? a to size to that right on basis, what guidance would margin you pull-through the were gain-on-sale

and handy circle back we'll back say but the I we've the So, trend as that of we're pipeline seeing can have the now overcome majority I that get to don't that. backlog.

representative the -- you be So in the the volume of see the of be what of level in. reflective that result funded should quarter should blocks

the gain so difference on rate sale see on tighter. And funded become you're pull-through between and going locked sale gain to

with an basis origination expect of that total on a that way could Okay. expenses? should up your And as percentage whether there absolute or of volume total that initiatives, the you operating then on we cost-cutting is any size that it's sort

change the acquire headcount manufacture of representative cost would expenses to so leverage cost to we're technology add through loan alone and the quarter grow operating this will to and increase. creating I and be continuing to add But workflow. and in the officers, to of expect in the the our We're dollars overall

my Okay. Thank you for taking question.

the Your JMP Securities. comes Cranston from next from Trevor of question line

Your line is open.

All morning. right. Thanks. Good

on focusing term the guys refinancing the outside. cash non-rate going on forward You more and opportunities mentioned so more

I of and of volume seen you've kind So, and provide could cash in of how you Was the Thanks. going terms growth how in in was opportunity if around trends success the growing think some What of refi cash-out wondering much there XQ? you color a out? business is forward? much

we handy. get I'm We're that XX% out looking now, details so that right to and if of quite Trevor, for back up But not cash -- of have that sure all Trevor. you. if don't not, certainly purchase. have we was going we but this you, Yes, quarter volume

those So, you of we details some definitely can offline. get just

I And of portions cash rate-sensitive they're those less together the as purchase business. and we out think couple interest

it. Got

sense. Thank comments. that makes Okay, the Appreciate you.

the Your question Blair. comes line from from Stephen William of Sheldon next

is line open. Your

Hi, thanks continuing volumes. for taking my questions. It to sounds like strong you're lead see

supplement versus noted driven through channels to is rely the that you to being wanted that leads? strong you're brand much you're some on more guess, now loanDepot's I so with third-party up have of volume to the organically? side getting are generating kind awareness volume on sources, opened third-party increasing on your the you've how lead lead organic the needing not especially where I you or of of So relying And enough organically ask, third-party

This Lee. question. That's a is I'll great that. John cover

up performance first year, increase lead over on impacting quarter website this We're quarter. outperform of is We've seen organic really market a response also and through channels. seeing up It's the our same digitally direct XX% XXX% actually reach So volume organic as versus in period. we're top-of-funnel ability seeing large to our very half visitors, other our very strong last XXXX. it's and lead growth

really -- the a purchase marketing -- big and Most of transaction at is at well. level impact the importantly, on the top though, the our impact as an So brand having it's marketing organic is having funnel.

So transactions company. into for the our brand more awareness is converting

third-party it much it's see on And investment what And way at the of just was, of we the in I of want an how to with dollars increase brand much those So the that. I measure happens because question third-party? that I is is And channels. think we we just to on that of how to is want is marketing organic, -- Anthony, all look return performance on our recognition. lead conversion add

develop So this add slide producing conversion brand as where the awareness and of of understanding organically, seeing wheel we're greater brand this of through at spend, more our funnel company top the to our to leads and effect funnel. comment we're that seeing lead marketing I that higher because commerce want the creating -- we're digital we partners my make awareness. because that is and velocity a of And is that last the brand sure top of

get is the a And not the customer model. our further ability As our have assets we at a competitors increase on marketing add mortgage an of our differentiation between the adjacent further important to to that this us homebuyer, same top do increase And loanDepot back spend. leverage legacy products or business and also embedded many and is products which revenue is and cost of core of marketing we homeowner of they services, base, allows point have these paid an marketing. by adding adjacent and the services,

That's helpful. really Got it.

going potential kind the the implications? As if a should or it utilized via investors Slam line wanted more by then financial just think of a time follow-up, be about just gradual Grand the how consumers, rollout? national it ask more geography the I the And Is to becomes highly available. to on to for rollout, it about package, be detail some there of

adding and So for been the we've so this adjacent hard is assets many, these services many future, at products years. and work adding on

the of Xst. company. we participating X,XXX have So this throughout mellohome, country agents And sister that estate is on product is our is available which October performance top real through the

around be states? wrong, is to Jeff, going XX title -- I'm me Our if now available correct

Yes.

rolling They we professional. brand never of estate customer participating not which looking and our transfer mellohome the to it, introduction us As mello the or -- that as allow we to homebuyers. that a real and top-of-the-funnel are a agent. and has flow, as roll to this are result come the warranty bundled out for is through coming and lead us service, to prequalified, real well a And out create buy substantial initiate many price insurance do the by free a we low as Grand home as loanDepot they opportunity to to to and consumer, will us, utilize pay customers gives as component provide home, guaranteed consumer. cash $X,XXX our And that looking they providing our here yet they that Slam. a rebate important they're to actually estate have for the a a get will back What's a to utilizing do, more

only and they that a some all but costs $X,XXX save of the money, moving their fuel products or and improve to not they single-branded of those the and some have have adjacent then service, So bundled a encompasses of together. property, services do cost approach to that

Great. Thank you.

of the next Faucette comes line Your James Stanley. from question from Morgan

we on market, step morning. what's back, it if etc., good. still the the good Hey, a is little My bit question quite but odd take given going seems a maybe market in

and settle amount where point, point the realities kind more things good there'll Anthony, of to generating in cash. still into that's current be will some obviously of You're economically, back of probably making fair making adjustments of kind something economics. sustainable your normalization to money the But a of you're

sense through about uses should Just now. to rationalization war of funds current of of reinvesting? pressure under even the it Or like where where ways event expected? if building at shareholders look Is chest different be to in this cash? of normalization makes So, or takes the time right returns you advantage longer this something can right you how kind the should a is that trying is of to be think think and environment, the take it that the that kind to some we than

the for way against. James. measure run a planning good always constantly, us we Thanks. have right of Hi, And hand, levels are proper at then we we shareholders. we return liquidity looking to capital and It's create and that the And our our metrics for think Obviously, internal on value question. other business. about to

franchise, allocation, we to a well. of origination assets in continuously want which will much how invest the our growing So capital do. question we as then and can invest And in servicing we it growing becomes

But the side outside of As to we've -- factors excess both M&A dividend combination to our special a the we've stated of we in evidenced in use that, looking said value year. if we dividend to or look have also the in and the by we shareholders, non-mortgage returned as return on side. earlier intention any the our payer we can quarterly a tools mortgage -- of basis. before, market, use constant if we're kind and capital, will be actively And

that, And so but continue to value. evaluate shareholder of we'll focus the all growing is on

call. And draw I people this ones, previous how deeper longer this your just on whether you to most been much obviously, you experience? from is can decision-making in probably parallels loanDepot appreciate And on parallels it's least that. a things than and to and or you've now experience anybody in industry a what -- any looking reaction of your you've kind meshed your companies, informing And right Can there -- what the your And, this or you some maybe in with was Anthony, seen call now? for time was at versus there where that? did that

that temporary have the get There's surprise. -- don't difference CEO make our is My highly James, and is will sidetracked that predictable, Consumers very, is Everything as and on past that is founder team to through cycles absolutely the this primary is this not in challenge rodeo. here in certain to of first continue very here certainly this gone past the journey This changing. poised done highly versus we by strategic is all is predictable. been return. the seeing and disruption. the which the digital that are I've some flavors it we're temporary; these really today, little

to the understand to disruption change companies continue how into is to brands. for and differentiators; are it future. not wonderful this have build opportunities better that for a to that technology Those We will invest mousetrap get that the just during creating

purpose So derail that and way. very is the of to we noise focused remain may to not have in temporary allow going our us very, margin any to

during is James, anything nothing, really that different. cycle seen I've this that So

you. that. Appreciate Thank

Mark Barclays. the comes question of DeVries from next Your from line

the than differences there in direct-to-consumer? any material quarter retail versus margins in this Thank gain-on-sale business you. end Were your in market

revenues out lending cycle. that that the we in So, are But I'll adjust this our as And and take two continues have market. Mark, believe, that. decoupled say Yes, markets direct will they really to separated through together I end by don't I versus market this sustainable. that not these is come will closer

Okay.

wholesale more of to you're dynamics impact had competitive say end kind in in an the really channel market safe the than the head-to-head it on where that is competing direct-to-consumer? So

No.

happening here, is we to wholesale the fuel What's -- are originations channel. for really our half competitive, but pressure wholesale of I hear XX% things, that, than XX% partner our and the now is only no. several can the of but to market that channel. like of believe, that's industry continues less continue background going You our right very that be And

pressures that, this through how seeing as as yet. retail pressure margins offers from received that it's brokers, overall mortgage have of the or there's the massively as from but bids they customers we're -- are So, still pricing type continue watch and we certainly current is affecting to saying of not wholesale that

more lines just along we me competitive add. the channel. purpose nature see Let is is it of than Where the by

reach refi in we what the most the and that and think less the in. grow pressure in we market and the four originated is that's pricing to regardless the of purchase, And one toggle actually was competitive of of advantage. and or as the cash reasons where ability XQ, refinance having why and on -- are So to and that rate came out to and the saw customers continuing term the channels broadening -- mentioned, all side it channel a opposite happened purchase, the product we rate-sensitive focusing of we

clarify the covered? that on helpful. the Are you wanted on where home Did that a referring Grand something home Is How few of that you hear premium that's sale warranty? made commission-free going -- correctly, did warranty? to Okay, Slam. is maybe when a work? comments to free word the And use I being you the just -- to is also

that Grand and We charge Slam free product our are that providing grouping to of customers. in

So free. it is

it. got Okay,

rebates that's alluded the And to? effectively that you of part so,

rebate. that's No, addition in to cash the

that we at have So mortgage an look a the lender. to way as cost everyone, embedded that, marketing the is fact

marketing As lender, formula this on a for -- mortgage works return very well us. for

revenue, rebate ability the So earnings revenue those provide really to some as juices and the services add our gives revenue, it and if you customer. title real us that closing of revenue, that back a to marketing estate return, in

Okay, great.

could a warranty rebate? that through come policy both So addition free home to in

correct. That's

interesting. Okay,

Okay, thank you.

You're welcome.

There are this no Anthony you. turn back over at to further I Hsieh, time. questions the call

each and build all you of us rest questions. look our term. Thank with over to to for of great and day. one forward joining every Well, for continuing We thank a the you, have you the long again and your relationship again,

conference This concludes today's call.

now disconnect. You may