In conducting its operations, the Company, through its wholly-owned subsidiaries, LDSS and ACT, routinely hold customers' assets in escrow pending completion of real estate financing transactions. These amounts are maintained in segregated bank accounts and are offset with the related liabilities resulting in no amounts reported in the accompanying consolidated balance sheets. The balances held for the Company’s customers totaled $14.2 million and $78.2 million at June 30, 2026 and December 31, 2025, respectively.

The Company operates in a highly regulated industry and is subject to various legal proceedings, examinations, investigations, and regulatory inquiries, including those identified below. The Company records liabilities for loss contingencies when losses are probable and reasonably estimable. The Company reviews these accruals at least quarterly and adjusts its accruals as necessary based on the impact of negotiations, settlements, rulings, advice of legal counsel, and other information and events pertaining to a particular matter.

Management does not believe that losses in excess of amounts accrued from pending or threatened legal and regulatory matters, individually or in the aggregate, will materially affect the Company's financial position, results of operations, or cash flows, other than the matters described below. The outcomes of legal and regulatory matters are inherently uncertain, and unfavorable resolutions could differ materially from current estimates and result in damages, fines, penalties, or injunctive relief or other costs that materially affect the Company's business, financial condition, results of operations, or cash flows.

The Company is cooperating with state regulators and attorneys general regarding ongoing investigations into the cybersecurity incident that occurred in January 2024 resulting from unauthorized access to our systems (“Cybersecurity Incident”). The Company believes that a loss is probable, but it cannot reasonably estimate a loss or range of loss beyond amounts accrued that might result from adverse judgments, settlements, penalties or other resolution of these investigations due to the preliminary stage of discussions and unresolved factual and legal matters.

On September 21, 2021, a former senior operations officer filed a complaint, as subsequently amended, with the Superior Court of the State of California, County of Orange. The complaint originally named the Company, an executive officer, and a former executive officer as defendants, and alleged loan origination noncompliance and various employment-related claims, including hostile work environment and gender discrimination. The claims against the two executive officers were dismissed by the court in 2022. Plaintiff's claims regarding improper origination of loan documents, gender discrimination and several other ancillary employment claims were dismissed as a result of several pre-trial motions filed on behalf of the Company. On February 7, 2025, a unanimous jury returned a verdict in favor of the Company regarding the remaining claims in the litigation. Plaintiff filed a notice of appeal of the jury verdict on April 15, 2025. To date, including $571,000 on February 2, 2026, the court has awarded loanDepot approximately $750,000 for attorneys’ fees and other costs as sanctions against the plaintiff and her counsel for bringing frivolous claims and engaging in other inappropriate conduct. The Company does not believe that a loss is probable or that the amount of loss is reasonably estimable in this matter at this time, given the favorable judgment and the pending appeal.

loanDepot.com, LLC is a defendant in multiple putative class action lawsuits alleging violations of the Telephone Consumer Protection Act, 47 U.S.C. § 227 (“TCPA”), related to marketing and customer communications. Of these actions, Jeffrey Kearns v. loanDepot.com, LLC (“Kearns”), filed in June 2022 has been certified as a class action and is pending in the

in the United States District Court for the Central District of California. Kearns seeks actual and statutory damages under the TCPA, injunctive relief, and attorneys’ fees and costs. The Company believes it has substantial defenses to the claims asserted in the Kearns lawsuit and intends to contest the claims vigorously, but the Company believes a loss is reasonably possible. However, the Company is unable to reasonably estimate the amount or range of possible loss that may result from the Kearns matter at this time due primarily to unresolved issues relating calculation methodologies that may be applied. The remaining actions are in various stages of litigation and have not been certified as classes. Absent class certification, the Company believes these other actions are ordinary routine litigation matters incidental to our business.

In July 2025, five borrowers filed a putative class action lawsuit against loanDepot.com, LLC in the United States District Court for the District of Maryland. The lawsuit alleges that loanDepot violated the Truth in Lending Act (“TILA”) by requiring loan officers to transfer retail borrowers’ loans to Internal Loan Consultants in certain circumstances and reducing the compensation those loan officers received on those loans. The Company believes it has substantial defenses to this lawsuit, and it continues to vigorously defend against it. The Company does not believe that a loss is probable or that the amount of loss is reasonably estimable in this matter at this time, due to the early stage of the proceedings, the significant factual and legal uncertainties involved, and the inability to determine the scope of any potential class.

In December 2025, a putative class action lawsuit was filed in the Superior Court of California, County of Alameda, against loanDepot.com, LLC, alleging that certain cookies and other “tracking technologies” collected website activity data even if visitors declined consent using the “Cookie Preferences” tool. The lawsuit alleges violations of the California Invasion of Privacy Act (“CIPA”), breach of contract, and violation of the California Unfair Competition Law. The complaint seeks actual and statutory damages under the CIPA, equitable relief, credit monitoring for the class, and attorneys’ fees and costs. The Company believes it has substantial defenses to this lawsuit and will vigorously defend against it. The Company does not believe that a loss is probable or that the amount of loss is reasonably estimable in this matter at this time, due to the early stage of the proceedings, the significant factual and legal uncertainties involved, and the inability to determine the scope of any potential class.

The Company enters into IRLCs with customers who have applied for residential mortgage loans and meet certain credit and underwriting criteria. These commitments expose the Company to market risk if interest rates change and the loan is not economically hedged or committed to an investor. The Company is also exposed to credit loss if the loan is originated and not sold to an investor and the customer does not perform. The collateral upon extension of credit typically consists of a first deed of trust in the mortgagor’s residential property. Commitments to originate loans do not necessarily reflect future cash requirements as some commitments are expected to expire without being drawn upon. Total commitments to originate loans as of June 30, 2026 and December 31, 2025 approximated $2.5 billion and $2.5 billion, respectively. These loan commitments are treated as derivatives and are carried at fair value, refer to Note 6 - Derivative Financial Instruments and Hedging Activities for further information on derivatives.

When the Company sells mortgage loans, it makes customary representations and warranties to the purchasers about various characteristics of each loan such as the origination and underwriting guidelines, including but not limited to the validity of the lien securing the loan, property eligibility, borrower credit, income and asset requirements, and compliance with applicable federal, state and local law. The Company establishes a loan repurchase reserve for losses associated with repurchase loan obligations if the Company breached a representation or warranty given to the loan purchaser. Additionally, the Company’s loan loss obligation for sold loans includes an estimate for losses associated with early payoffs and early payment defaults. Charge-offs associated with early payoffs, early payment defaults and losses related to representations, warranties, and other provisions are also included.


	Three Months Ended June 30,				Six Months Ended June 30,
	2026		2025		2026		2025
Balance at beginning of period	$	16,833	$	16,743	$	16,116	$	18,417
Provision for loan loss obligations	3,719		3,629		7,384		3,876
Charge-offs	(3,450)		(2,986)		(6,398)		(4,907)
Balance at end of period	$	17,102	$	17,386	$	17,102	$	17,386

The Company recognizes sales of mortgage servicing rights as sales if title passes, if substantially all risks and rewards of ownership have irrevocably passed to the purchaser, and any protection provisions retained by the Company are minor and can be reasonably estimated. If a sale is recognized and only minor protection provisions exist, a liability for the estimated obligation associated with those provisions is recorded in accounts payable, accrued expenses and other liabilities on the consolidated balance sheet. The Company establishes a reserve related to the reimbursement of the purchase price for any loans that are prepaid in full within 90 days of the MSR sale transaction. The obligation for sold MSRs was $0.3 million and $0.6 million as of June 30, 2026 and December 31, 2025, respectively.