Core Thesis - LoanDepot, Inc. is positioned for potential recovery and profitability despite current challenges, driven by its tech-enabled mortgage platform and diversified revenue streams [1][5]. Company Overview - LoanDepot is a tech-enabled retail mortgage originator and loan servicer, focusing on direct-to-consumer lending and complementary revenue streams such as title, insurance, real estate referrals, and HELOCs [2]. - The company surpassed $4 billion in revenue by 2020 and employed over 12,000 people during the low-rate housing boom [2]. Current Challenges - Elevated interest rates have frozen the housing market, resulting in prolonged losses and a declining stock price [3]. - In response, LoanDepot has implemented cost reductions, headcount rationalization, and is expanding its Mello platform under the "Vision 2025" initiative [3]. Operational Improvements - Recent operational improvements indicate a move toward profitability, with net losses narrowing in Q1 and Q2 2025 compared to prior quarters [4]. - LoanDepot's business model differs from capital-intensive iBuyers, leveraging mortgage origination and servicing capabilities that are less sensitive to housing price fluctuations [4]. Key Catalysts - Potential easing of interest rates and further integration of AI and automation through the Mello platform are expected to streamline loan processing [4]. - The "North Star" initiative focuses on customer engagement and retention, with a 70% recapture rate, the highest in the industry [4]. Financial Position - LoanDepot has substantial liquidity with over $400 million in cash and $1.2 billion in available credit, minimizing dilution risk [5]. - The company is viewed as having a compelling risk-reward opportunity, especially with the housing market poised for recovery [5]. Comparative Analysis - LoanDepot's diversified revenue streams and AI-driven efficiencies are emphasized as key advantages, similar to the bullish perspective on Rocket Companies, Inc. [6].

Core Viewpoint - Rithm Capital Corp. (NYSE:RITM) reported solid Q2 results with earnings exceeding the dividend and a minor book value gain, indicating effective management execution and fair pricing of shares at current levels [1]. Group 1: Financial Performance - RITM's book value (BV) showed a minor increase, aligning with expectations, and achieving a variance within 1.5% for three consecutive quarters, reflecting stability amidst sector volatility [2][9]. - Funded loan originations increased from $11.8 billion in Q1 2025 to $16.3 billion in Q2 2025, slightly outperforming the projected $15.0 billion [3]. - The gross origination spread (GOS) margin decreased from 1.37% in Q1 2025 to 1.22% in Q2 2025, closely matching the projected 1.25% [4][5]. - RITM's adjusted core earnings per share for Q2 2025 were reported at $0.472, slightly outperforming expectations [26][27]. Group 2: Sub-Portfolio Performance - The MSR sub-portfolio experienced valuation changes of $22 million and amortization of $177 million, with results closely matching projections [9][10]. - Genesis Capital's origination volume increased from $0.9 billion in Q1 2025 to $1.2 billion in Q2 2025, exceeding the projected $1.1 billion [22]. - Asset management revenues rose from $88 million in Q1 2025 to $95 million in Q2 2025, although slightly below the projected $100 million [23][24]. Group 3: Operational Insights - RITM's operational expenses increased from $509 million in Q1 2025 to $534 million in Q2 2025, slightly above the projected $525 million [29]. - The company maintained a strong dividend coverage, with adjusted core earnings comfortably exceeding the quarterly dividend rate of $0.25 per share [42]. - Management is considering a potential spin-off of its mortgage origination and servicing businesses, with no definitive timeline provided [39][41]. Group 4: Market Position and Valuation - RITM's current valuation is deemed appropriate, with a hold recommendation, as the company is not currently viewed as a strong buy [47]. - The company’s risk/performance rating remains at 3.5, indicating a balanced approach to managing interest rate fluctuations [32][35].