Litigation—The Company, among other things, engages in mortgage lending, title and settlement services, and other financial technology services. The Company operates in a highly regulated industry and may be subject to various legal and administrative proceedings concerning matters that arise in the normal and ordinary course of business, including inquiries, complaints, audits, examinations, investigations, employee labor disputes, and potential enforcement actions from regulatory agencies. While the ultimate outcome of these matters cannot be predicted with certainty due to inherent uncertainties in litigation, management accrues for losses when they are probable to occur and such losses are reasonably estimable, and discloses pending litigation if the Company believes a possibility exists that the litigation will have a material effect on its financial results. Legal costs expected to be incurred are accounted for as they are incurred.

The Company is currently a party to pending legal claims and proceedings regarding employee related labor disputes. The disputes allege that the Company has failed to pay certain employees for overtime and is in violation of the Fair Labor Standards Act and labor laws in the State of California. The majority of such legal claims and proceedings are in the early stages and, to the extent applicable, have not yet reached the class certification stage and as such the ultimate outcomes cannot be predicted with certainty due to inherent uncertainties in the legal claims and proceedings.

As part of the disputes and other similar types of legal matters, the Company included an estimated liability of $6.9 million and $8.3 million, as of June 30, 2025 and December 31, 2024, respectively, which is included in accounts payable and accrued expenses on the condensed consolidated balance sheets. During the three and six months ended June 30, 2025, the changes in the liability included a settlement of $1.4 million. No additional expense was accrued for both the three months ended June 30, 2025 and 2024. Refer to Note 20 for additional information.

Regulatory Matters—In the third quarter of 2021, following third-party audits of samples of loans produced during the fiscal years 2018, 2019, and 2021, the Company became aware of certain TILA-RESPA Integrated Disclosure (“TRID”) defects in the loan production process that resulted in the final closing costs disclosed in the closing disclosure, in some instances, being greater than those disclosed in the loan estimate. Some of these defects were outside applicable tolerances under the TRID rule, which resulted in potential overcharges to consumers. As of June 30, 2025 and December 31, 2024, the Company included an estimated liability of $5.0 million and $6.6 million, respectively, within accounts payable and accrued expenses on the condensed consolidated balance sheets. During the three months ended June 30, 2025, the Company recorded an additional accrual for these potential TRID defects of $0.1 million, which is included within loan origination expense in the condensed consolidated statements of operations and comprehensive loss. During the six months ended June 30, 2025, the Company recorded a reduction in the liability for these potential TRID defects of $0.8 million, which is included within loan origination expense in the condensed consolidated statements of operations and comprehensive loss. During the three and six months ended June 30, 2025, the Company had relief of the liability due to payments to customers in the amount of $0.7 million and $0.8 million, respectively.

For the three and six months ended June 30, 2024, the Company recorded an additional accrual for these potential TRID defects of $0.1 million and $0.1 million, respectively, which are included within loan origination expense in the condensed consolidated statements of operations and comprehensive loss. During the three and six months ended June 30, 2024, the Company had relief of the liability due to payments to customers in the amount of $2.1 million and $2.1 million, respectively. This accrual is the Company’s best estimate of potential exposure on the larger population of loans based on the results obtained by the audited sample. The accrued amounts are for estimated refunds potentially due to consumers for TRID tolerance errors for loans produced with the identified defects. The Company is continuing to remediate TRID tolerance defects as necessary.

Loan Commitments—The Company enters into IRLCs to fund mortgage loans, at specified interest rates and within a specified period of time, with potential borrowers who have applied for a loan and meet certain credit and underwriting criteria. As of June 30, 2025 and December 31, 2024, the Company had outstanding commitments to fund mortgage loans in notional amounts of approximately $205.6 million and $129.9 million, respectively. The IRLCs derived from those notional amounts are recorded within derivative assets and liabilities, at fair value as of June 30, 2025 and December 31, 2024, respectively, on the condensed consolidated balance sheets. See Note 15.

Forward Sale Commitments—In the ordinary course of business, the Company enters into contracts to sell existing LHFS or loans committed but yet to be funded into the secondary market at specified future dates. As of June 30, 2025 and December 31, 2024, the Company had outstanding forward sales commitment contracts of notional amounts of approximately $234.0 million and $158.0 million, respectively. The forward sales commitments derived from those notional amounts are recorded within derivative assets and liabilities, at fair value as of June 30, 2025 and December 31, 2024, respectively, on the condensed consolidated balance sheets. See Note 15.

Significant loan purchasers are those which represent more than 10% of the Company’s loan volume. During the three months ended June 30, 2025, the Company had three loan purchasers that accounted for 35%, 12% and 11% of loans sold by the Company. During the three months ended June 30, 2024, the Company had three loan purchasers that accounted for 48%, 27%, and 12% of loans sold by the Company. During the six months ended June 30, 2025, the Company had three loan purchasers that accounted for 34%, 13% and 12% of loans sold by the Company. During the six months ended June 30, 2024, the Company had three loan purchasers that accounted for 51%, 22% and 15% of loans sold by the Company.

Concentrations of credit risk associated with the LHFS carried at fair value are limited due to the large number of borrowers and their dispersion across many geographic areas throughout the United States. As of June 30, 2025, the company originated 12% of its LHFS secured by properties in California. As of December 31, 2024, the Company originated 10% of its LHFS secured by properties in California.

The Company maintains cash and cash equivalent balances at various financial institutions. Cash accounts at each bank are insured by the Federal Deposit Insurance Corporation for amounts up to $0.25 million. As of June 30, 2025 and December 31, 2024, the majority of the Company’s cash and cash equivalent balances are in excess of the insured limits at various financial institutions.

Escrow Payable and Other Customer Accounts—In accordance with its lender obligations, the Company maintains a separate escrow bank account to hold borrower funds pending future disbursement. The Company administers escrow deposits representing undisbursed amounts received for payment of property taxes, insurance and principal, and interest on mortgage loans held for sale. The Company also administers customer deposits in relation to other non-mortgage products and services that the Company offers. These funds are shown as restricted cash and there is a corresponding escrow payable on the consolidated balance sheet, as they are being held on behalf of the borrower or customer. The balance in these accounts as of June 30, 2025 and December 31, 2024 was $0.4 million and $0.1 million, respectively, and are included within escrow payable and other customer accounts on the condensed consolidated balance sheets.

In the normal course of business, companies in the mortgage lending industry encounter certain economic and regulatory risks. Economic risks include credit risk and interest rate risk, in either a rising or declining interest rate environment. Credit risk is the risk of default that may result from the borrowers’ inability or unwillingness to make contractually required payments during the period in which loans are being held for sale by the Company.

Interest Rate Risk—The Company is subject to interest rate risk in a rising interest rate environment, as the Company may experience a decrease in loan production, as well as decreases in the fair value of LHFS, loan applications in process with locked-in rates, and commitments to originate loans, which may negatively impact the Company’s operations. To preserve the value of such fixed-rate loans or loan applications in process with locked-in rates, agreements are executed for best effort or mandatory loan sales to be settled at future dates with fixed prices. These loan sales take the form of short-term forward sales of mortgage-backed securities and commitments to sell loans to loan purchasers.

Alternatively, in a declining interest rate environment, customers may withdraw their loan applications that include locked-in rates with the Company. Additionally, when interest rates decline, interest income received from LHFS will decrease. The Company uses an interest rate hedging program to manage these risks. Through this program, mortgage-backed securities are purchased and sold forward.

The Company currently uses forward sales of mortgage-backed securities, interest rate commitments from borrowers, and mandatory and/or best-efforts forward commitments to sell loans to loan purchasers to protect the Company from interest rate fluctuations. These short-term instruments, which do not require any payments to be paid to the counterparty in connection with the execution of the commitments, are generally executed simultaneously.

Credit Risk—The Company’s hedging program is not designated as formal hedging from an accounting standpoint, contains an element of risk because the counterparties to its mortgage securities transactions may be unable to meet their obligations. While the Company does not anticipate nonperformance by any counterparty, it is exposed to potential credit losses in the event the counterparty fails to perform. The Company’s exposure to credit risk in the event of default by the counterparty is the difference between the contract and the current market price. The Company minimizes its credit risk exposure by limiting the counterparties to well-established banks and securities dealers who meet established credit and capital guidelines.

Loan Repurchase Reserve—The Company sells loans to loan purchasers without recourse. As such, the loan purchasers have assumed the risk of loss or default by the borrower. However, the Company is usually required by these loan purchasers to make certain standard representations and warranties relating to the loan for up to three years post sale. To the extent that the Company does not comply with such representations, or there are early payment defaults, the Company may be required to repurchase the loans or indemnify these loan purchasers for losses. In addition, if loans pay-off within a specified time frame the Company may be required to refund a portion of the sales proceeds to the loan purchasers. The Company repurchased $2.2 million (9 loans) and $1.0 million (5 loans) in unpaid principal balance of loans during the three months ended June 30, 2025 and 2024, respectively, related to its loan repurchase obligations. The Company repurchased $4.2 million (15 loans) and $3.0 million (11 loans) in unpaid principal balance of loans during the six months ended June 30, 2025 and 2024, respectively, related to its loan repurchase obligations. The Company’s loan repurchase reserve is included within other liabilities on the condensed consolidated balance sheets. The recovery of the loan repurchase reserve is included within gain on loans, net on the consolidated statements of operations and comprehensive loss. The following presents the activity of the Company’s loan repurchase reserve:


	Three Months Ended June 30,				Six Months Ended June 30,
(Amounts in thousands)	2025		2024		2025		2024
Loan repurchase reserve at beginning of period	$	5,045	$	15,441	$	7,523	$	19,472
Recovery	(422)		(3,379)		(2,549)		(6,942)
Charge-offs	(312)		(341)		(663)		(809)
Loan repurchase reserve at end of period	$	4,311	$	11,721	$	4,311	$	11,721

Borrowing Capacity—The Company funds the majority of mortgage loans on a short-term basis through committed and uncommitted warehouse lines as well as from operations for any amounts not advanced by warehouse lenders, see Note 4. As a result, the Company’s ability to fund current operations depends on its ability to secure these types of short-term financings. If the Company’s principal lenders decided to terminate or not to renew any of the warehouse lines with the Company, the loss of borrowing capacity could be detrimental to the Company’s consolidated financial statements unless the Company found a suitable alternative source.