loanDepot, Inc.

Previous wording

The following discussion provides an analysis of 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 or outcomes 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 I, Item 1A "Risk Factors" and Part II, Item 7 “Management's Discussion and Analysis of Financial Condition and Results of Operations” in our 2025 Form 10-K and elsewhere in our filings with the SEC. Capitalized terms used but not otherwise defined herein have the meanings set forth in our Form 10-K.

Current wording

The following discussion provides an analysis of 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 or outcomes 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” in this report 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 2025 Form 10-K and elsewhere in our filings with the SEC. Capitalized terms used but not otherwise defined herein have the meanings set forth in our Form 10-K.

Previous wording

We are a customer-centric, technology-empowered residential mortgage platform. Our goal is to be the lender of choice for consumers and the employer of choice by being a company that operates on sound principles of exceptional value, ethics, and transparency. Since our inception we have significantly expanded our origination platform 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 ancillary services.

Current wording

We are a customer-centric, technology-empowered residential mortgage platform. Our goal is to be the lender of choice for consumers and the employer of choice by being a company that operates on sound principles of exceptional value, ethics, and transparency. Since our inception we have significantly expanded our origination platform 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, home equity loans, servicing conventional and government mortgage loans, and providing ancillary services.

Previous wording

During the first half of 2026, mortgage rates remained elevated and, according to FHLMC Primary Mortgage Market Survey, reached a one-year high of 6.66% at the end of July 2026, partly due to geopolitical tensions stemming from the conflict in Iran and higher energy prices driving inflation concerns. The rate environment continued to negatively affect housing affordability and loan qualification of homebuyers, contributed to the “lock-in” effect of borrowers that secured lower long- term interest rates during 2020 and 2021 giving rise to a lack of supply of homes available for sale, and decreased demand for refinancing, taken together resulting in lower demand for mortgage loans.

Current wording

In September 2026, the Federal Reserve increased the Federal Funds rate by 25 basis points to a range of 3.75% to 4.00%. During the third quarter of 2026, mortgage rates remained elevated and, according to FHLMC Primary Mortgage Market Survey, increased to a one-year high of 7.40% in October 2026, partly due to geopolitical tensions stemming from the conflict in Iran and higher energy prices driving inflation concerns. The rate environment continued to negatively affect housing affordability and loan qualification of homebuyers, contributed to the “lock-in” effect of borrowers that secured lower long-term interest rates during 2020 and 2021 giving rise to a lack of supply of homes available for sale, and decreased demand for refinancing, taken together resulting in lower demand for mortgage loans.

Previous wording

In April 2026 we announced our partnership with Figure Technology Solutions (“Figure”) as part of our strategy to meaningfully accelerate our digital transformation and as a component of our planned return to a market leading position. As part of the partnership, we integrated Figure’s proprietary credit and loan underwriting engine into our own proprietary mello® technology platform and point of sale system, enabling us to seamlessly offer a variety of innovative express path home loan products to our customers. Our 5x5 HomeLoan powered by Figure, which delivers approval in as little as five minutes and funding in as few as five days, brings real value to those seeking smart, seamless, and convenient solutions to their financing needs. Integrating this platform across our channels, helped to lower our cost of production, improve the customer experience, close more loans more quickly and contributed to a 26% increase in total unit volume compared to the second quarter of 2025.

Current wording

In April 2026 we meaningfully accelerated our digital transformation by launching our 5x5 HomeLoan HELOC product, which delivers approval in as little as five minutes and funding in as few as five days and brings real value to those seeking smart, seamless, and convenient solutions to their financing needs. Our strategic expansion into higher margin HELOC products is designed to drive volume in a higher interest rate environment as demand for traditional refinance volume declines, and demonstrates the strategic advantage of our Direct Channel by shifting our marketing strategy and product mix to best suit the operating environment. Integrating this product across our channels, helped to lower our cost of production, improve the customer experience, close more loans more quickly and contributed to a 33% increase in total unit volume compared to the third quarter of 2025.

Previous wording

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

Current wording

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

Previous wording

The decrease in net loss of $4.4 million was due to a $67.6 million increase in total net revenues, partially offset by a $50.8 million increase in total expenses and a $12.3 million decrease in income tax benefit primarily attributable to changes in the valuation allowance related to losses generating net operating loss carryforwards. The increase in total revenues was primarily due to an increase in gain on origination and sale of loans, net and origination fee income from higher loan origination volume, an increase in servicing fee income due to an increase in average servicing portfolio balance and a decrease in loss from the change in fair value of servicing rights, net, offset by lower gain on sale margins. The increase in total expenses was driven by an increase in personnel expense driven by an increase in headcount and an increase in commission expense in line with the increase in funded volume, direct origination expense, and general and administrative expense, partially offset by a decrease in marketing and advertising and other interest expense.

Current wording

The increase in net loss of $20.0 million was due to a $16.2 million decrease in total net revenues, a $2.1 million increase in total expenses, and a $1.6 million increase in income tax expense. The decrease in total net revenues was primarily due to a decrease in gain on origination and sale of loans, net and a decrease in other income, partially offset by an increase in origination income, net and a decrease in loss from change in fair value of servicing rights, net. The increase in total expenses was primarily due to an increase in direct origination expense and an increase in personnel expense driven by an increase in headcount and commission expense, offset by decreases in marketing and advertising, other interest expense, and servicing expense.

Previous wording

Origination Income, Net. Origination income, net, 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 certain loan origination costs. The $17.3 million or 49.5% increase in origination income, net, was the result of HELOC volumes increasing 237% from the launch of our 5x5 HomeLoan product during the three months ended June 30, 2026.

Current wording

Origination Income, Net. Origination income, net, 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 certain loan origination costs. The $29.9 million or 85.9% increase in origination income, net, was the result of HELOC volumes increasing from the launch of our 5x5 HomeLoan product during the second quarter of 2026.

Previous wording

Change in Fair Value of Servicing Rights, Net. Change in fair value of servicing rights, net includes (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 increase of $32.8 million or 62.7% reflects a $39.1 million increase in fair value, net of hedge related to improved market pricing from higher mortgage interest rates, decreased investor yield requirements and strong investor demand for lower coupon servicing, offset by a $6.7 million increase in fallout.

Current wording

Change in Fair Value of Servicing Rights, Net. Change in fair value of servicing rights, net includes (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 increase of $8.7 million or 18.8% reflects an $8.1 million increase in fair value, net of hedge related to improved market pricing from higher mortgage interest rates, decreased investor yield requirements and strong investor demand for lower coupon servicing and a $1.7 million decrease in fallout, partially offset by a $1.1 million increase in provision for early payoff losses.

Previous wording

Personnel Expense. Personnel expense includes salaries, commissions, incentive compensation, benefits, and other employee costs. The increase of $26.6 million or 17.3% is primarily due to a $12.8 million volume-related increase in commissions, a $7.8 million increase in salaries and benefits due to an increase in headcount and a $7.5 million increase in stock-based compensation related to forfeitures in the prior year. As of June 30, 2026, we had 4,626 employees compared to 4,509 employees as of June 30, 2025.

Current wording

Personnel Expense. Personnel expense includes salaries, commissions, incentive compensation, benefits, and other employee costs. The increase of $10.4 million or 6.4% is primarily due to a $5.7 million volume-related increase in commissions, a $3.7 million increase in salaries and benefits, and a $2.7 million increase in stock-based compensation related to new grants in the current year and increased forfeitures in the same quarter of prior year, partially offset by a $1.8 million decrease in severance. As of September 30, 2026, we had 4,735 employees compared to 4,553 employees as of September 30, 2025.

Previous wording

Marketing and Advertising Expense. The decrease of $20.4 million or 26.8% primarily reflects a $9.3 million decrease in lead generation, an $8.4 million decrease related to brand marketing expense and a $2.8 million decrease in direct mail spend.

Current wording

Marketing and Advertising Expense. The decrease of $10.0 million or 26.5% primarily reflects a $4.2 million decrease related to brand marketing expense, a $4.0 million decrease in lead generation, and a $3.2 million decrease in direct mail spend, offset by an increase of $1.2 million in website and social media marketing primarily attributable to enhanced marketing effectiveness, including more targeted marketing strategies and improved lead conversion rates.

Previous wording

Direct Origination Expense. Direct origination expense reflects the 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 non-affiliates. The $7.4 million or 36.1% increase in direct origination expense was the result of an increase in loan origination cost related to the volume of our 5x5 HomeLoan product.

Current wording

Direct Origination Expense. Direct origination expense reflects the 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 non-affiliates. The $12.6 million or 57.4% increase in direct origination expense was the result of an increase in loan origination cost related to the volume of our 5x5 HomeLoan product.

Previous wording

Other Interest Expense. The $2.3 million or 2.7% decrease in other interest expense was primarily the result of a $1.2 million gain on debt extinguishment related to the repurchase of senior notes and a $1.2 million decrease in MSR and securities financing interest expense.

Current wording

Other Interest Expense. The $6.3 million or 14.3% decrease in other interest expense was the result of a $6.4 million gain on debt extinguishment and $1.6 million decrease in interest expense related to the repurchase of senior notes and a $0.6 million decrease in interest expense related to a reduction in secured credit financing, offset by a $2.2 million loss on extinguishment related to the refinancing of the MMCA 2024-SD1 securitization.

Previous wording

The following table sets forth our consolidated financial statement data for the six months ended June 30, 2026 compared to the six months ended June 30, 2025.

Current wording

The following table sets forth our consolidated financial statement data for the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025.

Previous wording

The decrease in net loss of $18.7 million was primarily due to a $54.8 million increase in total net revenues, partially offset by a $29.1 million increase in total expenses. The increase in total revenues was primarily due to a decrease in loss from change in fair value of servicing rights, net, an increase in origination income, net, and an increase in servicing fee income. The increase in total expenses was primarily due an increase in personnel expense driven by an increase in headcount and an increase in commission expense in line with the increase in funded volume.

Current wording

The increase in net loss of $15.5 million was due to a $53.0 million increase in total expenses and a $13.9 million decrease in income tax benefit primarily attributable to an increase in the valuation allowance, reflected in the estimated annual effective tax rate, against deferred tax assets for net operating losses generated during 2026, partially offset by a $51.4 million increase in total net revenues. The increase in total expenses was driven by increases in personnel expense, direct origination expense, and general and administrative expense, partially offset by decreases in marketing and advertising expense, and other interest expense. The increase in total revenues was primarily due to an increase in origination fee income from higher loan origination volume and a decrease in loss from the change in fair value of servicing rights, net, offset by a decrease in other income.

Previous wording

The $27.6 million or 8.1% increase in gain on origination and sale of loans, net was primarily driven by a 26.7% increase in pull-through weighted interest rate lock volumes, partially offset by a decrease in pull-through weighted gain on sale margin of 38 basis points.

Current wording

The $14.4 million or 2.6% decrease in gain on origination and sale of loans, net was primarily driven by a decrease in pull-through weighted gain on sale margin of 11 basis points and an increase in provision for loan loss obligations related to an increase in estimated frequency and severity, partially offset by a 9.5% increase in pull-through weighted interest rate lock volumes.

Previous wording

Origination Income, Net. The $24.1 million or 39.6% increase in origination income, net, was the result of origination fees from a 31.4% increase in loan originations and contributions from increased HELOC volumes associated with the launch of our 5x5 HomeLoan product during the three months ended June 30, 2026.

Current wording

Origination Income, Net. The $53.9 million or 56.4% increase in origination income, net, was the result of origination fees from an increase in loan originations and contributions from increased HELOC volumes associated with the launch of our 5x5 HomeLoan product during the nine months ended September 30, 2026.

Previous wording

Servicing Fee Income. The increase of $8.2 million or 3.9% reflects an increase in servicing fee collections due to a 3.7% increase in our servicing portfolio.

Current wording

Servicing Fee Income. The increase of $9.1 million or 2.8% reflects an increase in servicing fee collections due to a 2.7% increase in our servicing portfolio.

Previous wording

Change in Fair Value of Servicing Rights, Net. The increase of $9.6 million or 10.2% reflects an increased gain of $31.1 million in fair value, net of hedge related to improved market pricing from higher mortgage interest rates, decreased investor yield requirements and strong investor demand for lower coupon servicing, partially offset by a $22.0 million increase in fallout.

Current wording

Change in Fair Value of Servicing Rights, Net. The increase of $18.2 million or 13.1% reflects an increased gain of $40.8 million in fair value, net of hedge related to improved market pricing from higher mortgage interest rates, decreased investor yield requirements and strong investor demand for lower coupon servicing, partially offset by a $20.3 million increase in fallout and decay,a $1.6 million increase in MSR sale losses and broker fees, and a $0.7 million increase in provision for early payoff losses related to sales.

Previous wording

Personnel Expense. The increase of $51.8 million or 17.0% is primarily due to a $31.5 million volume-related increase in commissions, a $14.2 million increase in salaries and benefits due to an increase in headcount, and an $8.2 million increase in stock-based compensation related to forfeitures in the prior year. As of June 30, 2026, we had 4,626 employees compared to 4,509 employees as of June 30, 2025.

Current wording

Personnel Expense. The increase of $62.2 million or 13.4% is primarily due to a $37.2 million volume-related increase in commissions, a $16.2 million increase in salaries and benefits due to an increase in headcount and benefits cost primarily attributable to licensed loan officer growth, and a $10.9 million increase in stock-based compensation related to new grants in the current year compared to higher forfeitures in the prior year, partially offset by a $2.2 million decrease in severance. As of September 30, 2026, we had 4,735 employees compared to 4,553 employees as of September 30, 2025.

Previous wording

Marketing and Advertising Expense. The decrease of $11.2 million or 29.5% primarily reflects a $5.9 million decrease in lead generation, a $4.1 million decrease related to brand marketing expense and a $1.7 million decrease in direct mail spend.

Current wording

Marketing and Advertising Expense. The decrease of $30.4 million or 26.7% primarily reflects a $13.7 million decrease in lead generation expense, a $12.7 million decrease related to brand marketing expense, and a $5.9 million decrease in direct mail spend primarily attributable to enhanced marketing effectiveness, including more targeted marketing strategies and improved lead conversion rates.

Previous wording

Direct Origination Expense. The $10.5 million or 24.8% increase in direct origination expense was the result of an increase in loan originations including costs associated with the volume of our 5x5 HomeLoan product.

Current wording

Direct Origination Expense. The $23.1 million or 35.9% increase in direct origination expense was the result of an increase in loan originations including costs associated with the volume of our 5x5 HomeLoan product.

Previous wording

General and Administrative Expense. The $10.5 million or 12.6% increase in general and administrative expense included a $3.6 million increase in office and equipment expenses primarily related to software subscriptions, a $1.5 million loss on disposal of fixed assets, a $1.2 million increase in legal expense due to an insurance recovery in the prior year, a $1.2 million increase in loss contingency, and a $1.0 million increase in compliance fees.

Current wording

General and Administrative Expense. The $10.0 million or 7.7% increase in general and administrative expense included a $3.8 million increase in office and equipment expenses primarily related to software subscriptions, a $3.6 million increase in other general expenses which included a $1.0 million loss on disposal of fixed assets, a $1.7 million increase in legal expense due to an insurance recovery in the prior year, a $1.5 million increase in loss contingency, a $1.1 million increase in compliance fees, and a $1.1 million increase in travel, offset by a $3.1 million decrease in consulting fees.

Previous wording

Other Interest Expense. The $2.1 million or 4.9% decrease in other interest expense was the result of the $1.2 million gain on debt extinguishment related to the repurchase of senior notes and a $1.0 million decrease in MSR interest expense.

Current wording

Other Interest Expense. The $8.6 million or 6.6% decrease in other interest expense was the result of a $7.5 million gain on debt extinguishment related to the repurchase of senior notes and a $1.1 million decrease in related senior note interest expense, offset by a $2.2 million loss on extinguishment related to the refinancing of the MMCA 2024-SD1 securitization.

Previous wording

Cash and Cash Equivalents. The $108.1 million or 32.1% decrease in cash and cash equivalents relates to repurchases of Senior Notes, increases in cash collateral requirements associated with the Company's warehouse lending facilities which resulted in a corresponding increase in restricted cash, increases in retained servicing rights, and additional net losses, partially offset by an increase in debt obligations.

Current wording

Cash and Cash Equivalents. The $122.8 million or 36.4% decrease in cash and cash equivalents relates to repurchases of Senior Notes, paydowns of secured credit facilities, increases in retained servicing rights, and additional net losses, partially offset by proceeds received from the MSR bulk sale.

Previous wording

Restricted Cash. Restricted cash was $70.7 million as of June 30, 2026 compared to $63.8 million as of December 31, 2025 representing an increase of $6.9 million or 10.9%. The increase was primarily the result of increases in prepaid lending commitments and increases in cash collateral associated with warehouse lines and debt obligations, offset by decreases in cash collateral for hedge positions.

Current wording

Restricted Cash. Restricted cash was $119.1 million as of September 30, 2026 compared to $63.8 million as of December 31, 2025 representing an increase of $55.3 million or 86.7%. The increase was primarily the result of increases in prepaid lending commitments and increases in cash collateral associated with warehouse lines and debt obligations, offset by decreases in cash collateral for hedge positions.

Previous wording

Derivative Assets, at Fair Value. The $16.9 million or 39.8% increase reflects a $12.7 million increase in Hedging Instruments and a $4.2 million increase in IRLCs from higher notional balances.

Current wording

Derivative Assets, at Fair Value. The $30.5 million or 71.9% increase reflects a $55.5 million increase in Hedging Instruments, offset by a $25.1 million decrease in IRLCs from higher notional balances.

Previous wording

Loans Eligible for Repurchase. Loans eligible for repurchase were $1.4 billion as of June 30, 2026, as compared to $1.1 billion as of December 31, 2025, representing an increase of $327.4 million or 30.5%. The increase between periods was driven by an increase in loans that were 90 days or more delinquent at June 30, 2026.

Current wording

Loans Eligible for Repurchase. Loans eligible for repurchase were $1.5 billion as of September 30, 2026, as compared to $1.1 billion as of December 31, 2025, representing an increase of $430.2 million or 40.0%. The increase between periods was driven by an increase in loans that were 90 days or more delinquent at September 30, 2026.

Previous wording

Servicing Rights, at Fair Value. The $121.6 million or 7.3% increase was comprised of $185.5 million of capitalized servicing rights from servicing-retained loan sales and a $44.9 million increase in fair value related to improved market pricing from higher mortgage interest rates, decreased investor yield requirements and strong investor demand for lower coupon servicing, partially offset by $101.0 million from principal amortization and prepayments, and a $6.3 million reduction from sales of servicing rights associated with $202.1 million in UPB.

Current wording

Servicing Rights, at Fair Value. The $67.2 million or 4.1% increase was comprised of $264.7 million of capitalized servicing rights from servicing-retained loan sales and a $119.5 million increase in fair value related to improved market pricing from higher mortgage interest rates, decreased investor yield requirements and strong investor demand for lower coupon servicing, partially offset by $143.4 million from principal amortization and prepayments, and a $172.0 million reduction from sales of servicing rights associated with $9.7 billion in UPB.

Previous wording

Warehouse and Other Lines of Credit. The decrease of $458.7 million or 15.8% is consistent with the decrease in loans held for sale during the six months ended June 30, 2026.

Current wording

Warehouse and Other Lines of Credit. The decrease of $1.1 billion or 36.2% is consistent with the decrease in loans held for sale during the nine months ended September 30, 2026.

Previous wording

Derivative Liabilities, at Fair Value. The decrease of $4.4 million or 40.8% reflects a $3.6 million decrease in Hedging Instrument liabilities from higher interest rates and a $0.8 million decrease in IRLCs.

Current wording

Derivative Liabilities, at Fair Value. The increase of $18.7 million or 174.5% reflects a $12.4 million increase in IRLCs and a $6.3 million increase in Hedging Instrument liabilities from higher interest rates.

Previous wording

Equity. Total equity was $333.0 million and $386.0 million as of June 30, 2026 and December 31, 2025, respectively. The decrease was primarily attributed to a net loss of $61.6 million, $2.4 million in repurchases of treasury shares, and a $2.0 million decrease due to conversion-related adjustments to the TRA liability, partially offset by stock-based compensation of $11.7 million and an increase of $1.0 million related to the issuance of common stock through the exercise of stock options.

Current wording

Equity. Total equity was $310.9 million and $386.0 million as of September 30, 2026 and December 31, 2025, respectively. The decrease was primarily attributed to a net loss of $90.3 million, $2.6 million in repurchases of treasury shares, and a $1.7 million decrease due to conversion-related adjustments to deferred taxes and TRA liability, partially offset by stock-based compensation of $18.0 million and an increase of $1.0 million related to the issuance of common stock through the exercise of stock options.

Previous wording

Our liquidity reflects our ability to meet current and potential cash requirements. We forecast the need to have adequate liquid funds available to operate and grow our business. As of June 30, 2026, unrestricted cash and cash equivalents were $229.1 million and committed and uncommitted available capacity under our warehouse and other lines of credit was $1.9 billion.

Current wording

Our liquidity reflects our ability to meet current and potential cash requirements. We forecast the need to have adequate liquid funds available to operate and grow our business. As of September 30, 2026, unrestricted cash and cash equivalents were $214.4 million and committed and uncommitted available capacity under our warehouse and other lines of credit was $2.5 billion.

Previous wording

At this time, we currently believe that our cash on hand, as well as the sources of liquidity described above, will be sufficient to maintain our current loan operations, originations and capital commitments for the next twelve months. However, we will continue to review our liquidity needs in light of current and anticipated mortgage market conditions and we are taking various steps to align our cost structure with current and expected mortgage origination volumes.

Current wording

At this time, we currently believe that our cash on hand, as well as the sources of liquidity described above, will be sufficient to maintain our current loan operations, originations and capital commitments for the next twelve months assuming we are able to refinance the 2027 Senior Notes due in November 2027. However, we will continue to review our liquidity needs in light of current and anticipated mortgage market conditions and we are taking various steps to align our cost structure with current and expected mortgage origination volumes.

Previous wording

Our lenders require us to comply with various financial covenants including tangible net worth, liquidity, leverage ratios and profitability. As of June 30, 2026, we were in full compliance with all 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 operate our business and obtain the financing necessary to achieve that purpose.

Current wording

Our lenders require us to comply with various financial covenants including tangible net worth, liquidity, leverage ratios and profitability. As of September 30, 2026, the Company was in compliance with all covenants. We may amend or obtain waivers in the future in order to maintain compliance with such financial covenants. Our lenders are not required to grant any such amendments or waivers and may determine not to do so. 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 operate our business and obtain the financing necessary to achieve that purpose.

Previous wording

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 June 30, 2026, our loans remained on warehouse lines for an average of 15 days. Our warehouse facilities are generally short-term borrowings with maturities of one year and our securitization facilities have three year terms. 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 69% of the mortgage loans that we originated during the six months ended June 30, 2026 were sold in the secondary mortgage market either directly to Fannie Mae and Freddie Mac or securitized into MBS guaranteed by Ginnie Mae. We also sell loans to other non-Agency investors.

Current wording

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, 2026, our loans remained on warehouse lines for an average of 17 days. Our warehouse facilities are generally short-term borrowings with maturities of one year and our securitization facilities have three year terms. 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 64% of the mortgage loans that we originated during the nine months ended September 30, 2026 were sold in the secondary mortgage market either directly to Fannie Mae and Freddie Mac or securitized into MBS guaranteed by Ginnie Mae. We also sell loans to other non-Agency investors.

Previous wording

As of June 30, 2026, we maintained revolving lines of credit with eleven counterparties, including two loan funding facilities with GSEs, providing warehouse and securitization facilities with borrowing capacity totaling $4.4 billion of which $1.5 billion was committed. Our $4.4 billion of capacity as of June 30, 2026 was comprised of $3.6 billion with staggered maturities within one year, a $300.0 million securitization facility that matures in April 2028, and a $500.0 million securitization facility that matures in April 2029. As of June 30, 2026, we had $2.4 billion of borrowings outstanding and $1.9 billion of additional availability under our facilities. Warehouse and other lines of credit are further discussed in Note 9- Warehouse and Other Lines of Credit of the Notes to Consolidated Financial Statements contained in Item 1.

Current wording

As of September 30, 2026, we maintained revolving lines of credit with eleven counterparties, including two loan funding facilities with GSEs, providing warehouse and securitization facilities with borrowing capacity totaling $4.4 billion of which $1.5 billion was committed. Our $4.4 billion of capacity as of September 30, 2026 was comprised of $3.6 billion with staggered maturities within one year, a $300.0 million securitization facility that matures in April 2028, and a $500.0 million securitization facility that matures in April 2029. As of September 30, 2026, we had $1.9 billion of borrowings outstanding and $2.5 billion of additional availability under our facilities. In October 2026, based on changes in product mix, volume and usage, the Company allowed two warehouse facilities to expire without renewal, and added a new $125.0 million warehouse facility with a maturity date of September 2027. Warehouse and other lines of credit are further discussed in Note 9- Warehouse and Other Lines of Credit of the Notes to Consolidated Financial Statements contained in Item 1.

Previous wording

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 June 30, 2026, we had a total of $16.2 million in restricted cash posted as collateral with our warehouse and securitization facilities, of which $3.5 million was the minimum requirement.

Current wording

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, 2026, we had a total of $36.1 million in restricted cash posted as collateral with our warehouse and securitization facilities, of which $4.0 million was the minimum requirement.

Previous wording

MSR facilities and Term Notes provide financing for our servicing portfolio investments. As of June 30, 2026, our MSR facility secured by Fannie Mae had an outstanding balance of $117.6 million in MSR facilities and $198.2 million in Term Notes, secured by Fannie Mae MSRs totaling $396.9 million. As of June 30, 2026, our MSR facility secured by Freddie Mac had an outstanding balance of $321.8 million, secured by Freddie Mac MSRs totaling $396.7 million. As of June 30, 2026, our MSR facility secured by Ginnie Mae had an outstanding balance of $114.6 million in variable funding notes and $347.2 million in Term Notes, secured by Ginnie Mae MSRs totaling $696.4 million.

Current wording

MSR facilities and Term Notes provide financing for our servicing portfolio investments. As of September 30, 2026, our MSR facility secured by Fannie Mae had an outstanding balance of $106.2 million in MSR facilities and $198.3 million in Term Notes, secured by Fannie Mae MSRs totaling $428.3 million. As of September 30, 2026, our MSR facility secured by Freddie Mac had an outstanding balance of $266.0 million, secured by Freddie Mac MSRs totaling $421.6 million. As of September 30, 2026, our MSR facility secured by Ginnie Mae had an outstanding balance of $130.7 million in variable funding notes and $347.4 million in Term Notes, secured by Ginnie Mae MSRs totaling $582.7 million.

Previous wording

Securities financing facilities provide financing for the retained interest securities associated with our securitizations. As of June 30, 2026 there were outstanding securities financing facilities of $76.1 million, secured by trading securities with a fair value of $82.0 million.

Current wording

Securities financing facilities provide financing for the retained interest securities associated with our securitizations. As of September 30, 2026 there were outstanding securities financing facilities of $66.0 million, secured by trading securities with a fair value of $75.2 million.

Previous wording

Servicing advance facilities provide financing for our servicing agreements. As servicer, we are required to fulfill contractual obligations such as principal and 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 June 30, 2026 the outstanding balance on our servicing advance facilities was $71.1 million secured by servicing advance receivables totaling $93.3 million.

Current wording

Servicing advance facilities provide financing for our servicing agreements. As servicer, we are required to fulfill contractual obligations such as principal and interest payments for certain investors 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, 2026 the outstanding balance on our servicing advance facilities was $71.2 million secured by servicing advance receivables totaling $95.1 million.