Good afternoon, and welcome to loanDepot's First Quarter 2025 Earnings Call. All participants are in a listen-only mode. After the speakers' remarks, we will conduct a question-and-answer session. [Operator Instructions] As a reminder, this conference call is being recorded. I would now like to turn the call over to Gerhard Erdelji, Senior Vice President, Investor Relations. Please go ahead.

Thank you and good afternoon, everyone. Thank you for joining our first quarter 2025 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, strategies, capabilities and financial performance. 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. Our presentation today contains certain non-GAAP financial measures that we believe provide additional insight into analyzing and benchmarking the performance and value of our business and facilitating company-to-company operating performance comparisons. For more details on these non-GAAP financial measures, including reconciliation to the most directly comparable GAAP measures, please refer to today's earnings release, which is available on our website at investors.loandepot.com. A webcast and a transcript of this call will be posted on our website after the conclusion of this call. On today's call, we have loanDepot's Founder and Executive Chairman, Anthony Hsieh; President and Chief Executive Officer, Frank Martell; and Chief Financial Officer, Dave Hayes. They will provide an overview of our quarter as well as our financial and operational results, outlook. We are also joined by Chief Investment Officer, Jeff DerGurahian; and LDI Mortgage President, Jeff Walsh, to help answer your questions after our prepared remarks. And with that I'll turn things over to Frank to get us started. Frank?

Thank you, Gerhard. I appreciate everyone joining us on the call today. As we announced in early March, I plan to step down from my role as CEO and member of the board at our annual meeting of stockholders on June the 4th. For the next month, I will remain active in my role and fully support our Founder, Anthony Hsieh, in his transition back to day-to-day leadership of the company and as he ultimately becomes our interim CEO. Since this is my last earnings call with the company, I would like to share a few heartfelt messages starting with the fact that I'm very proud to have been part of loanDepot and look forward with confidence to the company's future success. I would also like to sincerely thank Team loanDepot for their dedication and support over the past three years. As a team, we address the realities of the market while investing in our critical systems, products and processes that will allow loanDepot to take advantage of our market differentiators in this and upcoming cycles as well as allow us to continue to deliver a best-in-class customer experience, which is the core to loanDepot's service-based DNA. Before I turn the call over to Anthony, I'm pleased to share that Q1 was a quarter of positive momentum for the company with higher volume, margins and ongoing cost discipline, which drove significantly improved results, which David Hayes will elaborate more in detail later in the call. As I close, in the spirit of expressing my gratitude, I'd like to thank our investor community and all those who participated in our quarterly calls. I appreciate your engagement, support and the time you spent evaluating loanDepot. With that, Anthony, the floor is yours.

Thank you, Frank, and hello, everyone. On behalf of the Board and Team loanDepot, I want to express our gratitude for your leadership over the past three years. Frank, you're a man of honor and a servant leader. You care for Team loanDepot and the customers we serve is evident. Now to look forward, first of all, it's great to be back with all of you. We respect the work of the investor community and to echo Frank's comment, recognize your important role in the marketplace. As we move ahead in the coming days and weeks, the team and I will focus on capitalizing upon the things that make loanDepot great, with the expectation being that we expand originations and drive growth. I believe our multi-channel sales model, proprietary mello tech stack, wide product array, powerful brand muscle and our servicing business are foundational areas in which loanDepot can win. By leveraging this unique constellation of assets plus adding to our arsenal with new and emerging technologies and platform refinements, I believe we are well positioned to gain profitable market share and scale our business. To elaborate a bit further, our multichannel origination model is special. We have three distinct channels that serve as the foundation of our business. Our end market retail and joint venture channels primarily serve the home purchase market, while our consumer direct channel primarily features refinance and home equity lending services. Purchase is generally considered to be more stable and consistent part of the mortgage market and forms the foundation of our origination strategy, while our direct channel allows us to scale and grow when interest rates drive increased refinance activity as well as capture home equity volume when customers want to access equity while maintaining their first mortgage interest rate. Our end market retail…

Thanks, Anthony, and good afternoon, everyone. We deeply appreciate all that Frank brought to our company and are energized by Anthony's return. Under Frank's guidance, the first quarter reflected the benefits of our investment in growth-generating initiatives despite the adverse impact of lower servicing revenue stemming from our 2024 MSR bulk sales. We reported an adjusted net loss of $25 million in the first quarter compared to an adjusted net loss of $38 million in the first quarter of 2024 due primarily to higher lock volume and gain on sale margin, offset somewhat by higher expenses. During the first quarter, pull-through weighted rate lock volume was $5.4 billion, which represented a 15% increase from the prior year's volume of $4.7 billion and reflected the impact of our investment in recruiting and developing our loan officers. Pull-through weighted lock volume came in within the guidance we issued last quarter of $4.8 billion to $5.8 billion and contributed to adjusted total revenue of $278 million compared to $231 million in the first quarter of 2024. Our increase in adjusted revenue has accelerated and more than overcame the decrease in servicing revenue stemming from our 2024 bulk MSR sales. Our pull-through weighted gain on sale margin for the first quarter came in at 355 basis points, above our guidance of 320 to 340 basis points and compared to 274 basis points in the prior year. Our higher gain on sale margin primarily benefited from a bigger contribution by our home equity-linked products and a higher proportion of government loans compared to the prior year. Our loan origination volume was $5.2 billion for the quarter, an increase of 14% from the prior year's volume of $4.6 billion. This was also within the guidance we issued last quarter of between $4.5 billion and $5.5 billion.…

Thank you. [Operator Instructions] Our first question comes from Doug Harter from UBS. Please go ahead. Your line is open.

Hi. This is actually Corey Johnson on for Doug. So you had like a wider gain on sale margin this quarter, and you mentioned how home equity-linked products helped you to increase that gain on sale. Can you maybe just talk a little bit about like what the outlook is for home equity business? Like what is that market looking like now? Is it a more – is this is an attractive option than it was perhaps maybe just even a few months ago?

Yes. Hi, Corey. It's Anthony Hsieh. So the second mortgage product really is a proper hedge to the interest rate environment. So as rates stay somewhat elevated, we continue to scale this business by increasing our marketing and looking at cross-sell opportunities, both in terms of our first mortgage marketing leads and our servicing portfolio. As rates continue to adjust and if we hit a rally, you will see first mortgage cash out dominate more so than the home equity market. So in short, we continue to increase our home equity market. There is a very strong demand as a result of it with record home equity out in the country, very low loan-to-value and many of the consumers protecting their 2%, 3% and 4% interest rates. This is the best way for them to leverage their cash flow. And again, as rates decrease, which is more so of when and not if, we'll be in a great opportunity with a cash out refinance.

Great, thank you.

[Operator Instructions]

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

Thank you. On behalf of Frank, Dave, Gerhard, Jeff Walsh, Jeff DerGurahian, the rest of our team, I want to thank you for joining us today. I look forward to sharing our progress again next quarter. I rejoined the company in an active management role with a goal of leveraging our unique assets that compromise compressed loanDepot. Our diversified channel strategy, which is the industry's only at scale model of this type, nationally recognized brand and top-of-funnel customer acquisition experience, in-house servicing business and proprietary mello tech stack allow us to maximize operational leverage, providing the foundation for accelerated growth once the market normalizes. I, along with our leadership team, am committed to house, capture, grow, protect and invest in those assets to continue loanDepot's position as a leader in home mortgage. So thanks again, everybody, and I appreciate your support.

This concludes today's conference call. You may now disconnect.