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48 | M R EP O RT SERVICING THE LATEST O R I G I NAT I O N S E R V I C I N G DATA G O V E R N M E N T S E C O N DA R Y M A R K E T Fresh Off IPO, loanDepot Nets $2B in 2020 Launching an IPO and partnering with Major League Baseball are just a few of the steps that loanDepot took to set itself ahead of the pack. D uring the fourth quarter of 2020, loanDepot announced a net income of $547.2 million, down from $728.3 million in Q 3. For the year ending December 31, 2020, the company announced $2 billion in profit, with an adjusted net income of $1.5 billion. "I'm incredibly proud of and humbled by our record-breaking 2020 performance and thank our team members for their passion- ate commitment to our customers during an unprecedented year," loanDepot Founder and CEO Anthony Hsieh said. February was a banner month for the company, launching its initial public offering (IPO) on February 11, 2021, and entering into a multi-year partnership agreement with Major League Baseball (MLB), where loanDepot was named "Official Mortgage Provider" of Major League Baseball. Loan origination volume for Q 4 2020 hit a loanDepot record of $37.4 billion, $10.2 billion or 38% more over the third quarter. Loan origination volume for 2020 totaled $100.8 billion, a 122% rise in loan origination volume over 2019. During the fourth quarter of 2020, loanDepot donated $2 million to support individuals and families impacted by COVID-19, as well as providing support to several key charitable organizations. These donations bring the total amount donated in 2020 to support pandemic-relief and philanthropic efforts to $3 million. The company's mortgage servicing rights increased by 45%, or $347.4 million during the fourth quarter to a record $1.1 billion. This increase was driven by $411.3 million of new additions, partially offset by runoff of $80 million. During the fourth quarter of 2020, servicing retained loan sales increased as a result of the record level of loan originations. Servicing income increased $67.5 million to $185.9 million for 2020, compared to $118.4 million in 2019, and increased $16 million or 33% to $64.4 million for the fourth quarter of 2020, compared to $48.4 million for the third quarter of 2020. Approximately 2.4%, or $2.4 billion, of loanDepot's servicing portfolio was in active forbearance, a decline from 3.4%, or $2.6 billion, at the end of the third quarter of 2020. The company employs more than 2,300 licensed mortgage loan professionals who work in the retail channel, accounting for $29.7 billion, or 79%, of loan originations. For the year ending December 31, 2020, loanDepot's Retail Channel contributed $80.3 billion, or 80%, of loan originations. Mortgage Performance During the COVID-19 Crisis When looking at mortgage loan statistics, the numbers do not tell the full story. W hen the coronavirus pandemic prevented many Americans from working, many wondered what would happen in the housing market. After all, no employment, no paycheck, no paying the mortgage. The Federal Housing Finance Agency (FHFA) says that calculating the number of Americans who are having difficulty paying for their homes may be difficult considering new rules and regulations related to the pandemic response. During 2020, mortgages re- ported to the credit bureaus as delinquent plunged to 1.0%. The percentages over the past year for mortgages that were seriously delinquent and mortgages in the process of foreclosure, bank- ruptcy, or deed-in-lieu remained flat," according to an FHFA press release. "As a result of these trends, the median credit score of mortgage borrowers, as measured by VantageScore on borrowers of active mortgage loans, has actually risen slightly in 2020." Based on that information, it would appear that most bor- rowers aren't having any trouble keeping up with their mortgages. However, the CARES Act (short for Corona Virus Aid, Relief, and Economic Security Act) allowed people to skip payments without damaging their credit scores or having their mortgages flagged as past due on their credit reports. Their mortgage status would remain at whatever it was when the CARES Act passed. Therefore, if they were current on their payments, but then missed one after the act passed, no harm would come to their credit, and their actual status would be dif- ficult to determine. So, when looking at mortgage performance statistics, it's impor- tant to keep all of this in mind. In 2020, mortgages reported 30 to 60 days late fell to 1.0%. Mortgages that were 90 to180 days past due fell to 0.6%. And mortgages that resulted in foreclo- sure, bankruptcy, or deed-in-lieu remained flat at 0.3%. Overall median credit scores for mortgage borrowers rose slightly in 2020, according to VantageScore. If the provisions in the CARES Act were removed, it's likely that by the end of October 2020, past-due mortgages would be three percentage points higher. However, a more accurate as- sessment of how the pandemic impacted mortgages most likely won't be available until after the crisis ends.