LoanDepot expects the mortgage industry to continue facing a challenging environment.
Recent interest rate increases have reduced industry forecasts for market volumes for the year, the company said in a Tuesday (May 7) earnings release.
“Since our last call, the expectations for lower interest rates have been pushed out from early to mid-2024 to later 2024,” Frank Martell, president and CEO of loanDepot, said Tuesday during the company’s quarterly earnings call. “The higher-for-longer stance by the Federal Reserve has been reflected by the recent forecast published by the Mortgage Bankers Association, which lowered their 2024 volume estimates by approximately 10% to $1.8 trillion.”
In response to these challenges, loanDepot continues to focus on pursuing profitable growth and lower costs, according to the release.
The company’s expense reductions in the first quarter came from lower salaries and marketing costs, and other reductions will come from third-party vendor spend, process and organizational efficiencies, and facilities-related expenses, Martell said during the call.
At the same time, the firm will continue to invest in its revenue-generating capabilities and its key operating systems and platforms, Martell said.
“Our markets remain challenging, no doubt, but I believe that loanDepot is positioned to deliver increasing value to all of our stakeholders over the course of this year and in the years to come,” Martell said.
LoanDepot also reported Tuesday that the cybersecurity incident it faced in January cost it $15 million in directly related charges during the quarter ended March 31. In addition, the company estimates that it lost about $22 million in revenue during the time its systems were offline, according to the earnings release.
The firm said in January that it took certain systems offline during the cybersecurity incident.
LoanDepot does not expect further disruptions to its operations from the incident, per the Tuesday earnings release.
“Fortunately, we do not expect this incident to further disrupt our operations, nor do we expect the incident to have a material impact for 2024 as a whole,” Martell said during the call. “Unfortunately, we live in a world where these types of acts are increasingly frequent and sophisticated, and our industry has not been spared.”