loanDepot, Inc.

Good afternoon and welcome to Loan Depot's third quarter 2023 earnings call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, again, press star one. Thank you. I would now like to turn the call over to Gerhard Erdely, Senior Vice President, Investor Relations. Please go ahead.

Good afternoon, everyone, and thank you for joining Loan Depot's third quarter 2023 earnings call. Before we begin, I would like to remind everyone that this conference call may include forward-looking statements regarding the company's operating and financial performance in future periods. All statements other than statements of historical fact are statements that could be deemed forward-looking statements, including but not limited to guidance to our pull-through weighted rate lock volume, origination volume, pull-through weighted gain on sale margin, and expense trends. These statements are based on the company's current expectations and available information. Actual results for future periods may differ materially from these forward-looking statements due to risks, or other factors that are described in the risk factors section of our filings with the SEC. A webcast and a transcript of this call will be posted on the company's investor relations website at investors.loandepot.com under the events and presentations tab. On today's call, we have Loan Depot President and Chief Executive Officer Frank Martell and Chief Financial Officer David Hayes to provide an overview of our quarter as well as our financial and operational results outlook and to answer your questions. We are also joined by our Chief Investment Officer, Jeff DeGurian, and LDI Mortgage President, Jeff Walsh, to help address any questions you might have after our prepared remarks. And with that, I'll turn things over to Frank to get us started. Frank?

Thank you, Gerhard, and thank you all for joining us today. I look forward to sharing my perspective on market conditions and our results. Loan Depot continues to make significant progress against the imperatives we laid out in our Vision 2025 plan back in July of 2022. As you may recall, Vision 2025 focused on four main areas. First, transforming our originations business to drive purchase money transactions with an expanded emphasis on purchase-driven lending. Second, investing in profitable growth-generating initiatives and critical business operating platforms and processes to support operating leverage and best-in-class quality and delivery. Third, aggressively right-sizing our cost structure to address current and future projected market conditions. And fourth and finally, optimizing and simplifying our organizational structure. In the third quarter, our revenues were essentially unchanged from the prior quarter as we modestly increased our market share and improved gain on sale margins. Importantly, we benefited from positive contributions from our servicing platform, builder partnerships, and home equity lending. The company's core mortgage origination revenues were down 3% for the quarter, modestly outperforming the overall market trend during the same period. Higher mortgage interest rates during the third quarter contributed to the modest decline in our revenue trend. David will discuss this area and other results of operations in a few minutes. While in general housing stock remains a short supply, new home construction has been a bright spot this year. In this regard, we continue to work closely with our builder partners, and we believe new home construction will be a critical driver for adding much needed new housing stock in 2024 and beyond. Another bright spot in recent quarters has been our HELOC product, which continues to serve as a powerful financial tool for our customers. Over the past several quarters, our HELOC revenue has grown steadily, and this product is becoming a meaningful, positive contributor to our financial performance. We expect this positive growth trend to continue as homeowners access record levels of home equity. As I discussed on past calls, we believe that homeownership is the bedrock of the American dream, and plays a vital role in helping to build strong and stable communities. Further deepening our support for diverse and first-time homebuyers is a critical component of Vision 2025. As a purpose-driven lender, our team is passionate about making homeownership accessible and achievable for more families. Along these lines, we recently launched our Access Zero program, intended to make homeownership more accessible for aspiring homeowners grappling with the traditional down payment requirement, high interest rates, and rising home prices. With affordability concerns eroding consumers' purchasing power, Access Zero offers up to 5% in down payment assistance. As we continue to unlock new ways for our customers to purchase homes in today's challenging environment, Access Zero helps to address a significant barrier, particularly for first-time homebuyers grappling with the obstacle of saving for the higher down payments that come with rising costs of housing. Through the implementation of Vision 2025, we delivered our third successive quarter of lower operating losses. This important progress has come against the backdrop of continued significant challenges in the mortgage market. The improvements were driven by margin expansion and continued benefits of cost reduction, gains in productivity, and increasing operating leverage. We continue to maintain our disciplined approach to expense management as we reset our cost structure to align with the size of the market. In the third quarter, we lowered total expenses by $25 million or 8%. Since the launch of Vision 2025 in the second quarter of last year, we have reduced our total quarterly expenses by approximately 45%. It's important to note that in addition to becoming more efficient, we're also making investments in the company to position us for leadership as the market emerges from the current downturn. These investments include our primary point of sale and loan production systems, as well as customer contact and management capabilities. As we look forward to 2024, our current expectation is that the market volumes will remain substantially similar to 2023 levels. We believe that the factors that have impacted the industry in 2023, including lack of housing stock for sale, as well as record low affordability, will be with us during 2024. In this volume-constrained environment, we expect to continue to capitalize on our multi-channel go-to-market platform to deliver profitable areas of growth. In addition, we will continue to aggressively drive our productivity plan and become more efficient in our pursuit of reaching profitability. In this regard, we are taking actions over the next several quarters which target an additional $120 million in annualized expense reductions, including $100 million of non-volume-related reductions. David will provide additional details on this plan in a few moments. I'd like to conclude my prepared remarks today by thanking Team Loan Depot and our other key stakeholders for their support. Our markets remain challenging, no doubt, but this is also a very important period of positive change and forward momentum for the company. I believe we're seeing a positive and tangible result of our continued focus on the four pillars of our Vision 2025 strategic plan. With over $700 million of cash on hand, additional cost productivity programs in flight, and consistent contributions from each of our business units, We believe that we are increasingly well positioned to navigate through the present market downturn and emerge as a stronger and more valuable company. With that, I'll now turn the call over to David, who will take us through the financial results in more detail.