loanDepot Will Soon Violate Debt Covenants
Mortgage originator to seek additional waivers after posting quarter million dollar loss.
August 13, 2022
To maintain access to certain lines of credit loanDepot (LDI), a mortgage lender, promised to remain profitable. The company lost $223 million in the latest quarter but says it is in full compliance with all financial covenants after seeking and receiving amendments related to remaining profitable.
There’s more trouble ahead though.
With shares down 80.5% in the past year, loanDepot indicated in its latest quarterly filing it expects to once again soon run afoul of its debt covenants:
“We expect that we will need to further amend or obtain waivers during fiscal 2022 in order to maintain compliance with such financial covenants.”
The current amendments limit the amount of debt loanDepot can take on and require a minimum cash reserve. The company finances most of its loan originations and recently fired 6,500 employees.
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