Operating expenses rose 11% YoY while servicing fee revenue grew only 1%.
Diluted EPS fell 71% year-over-year to $0.74.
Pending sale of reverse mortgage portfolio to FAR to generate $70-80M in proceeds.
Issued $200M in 9.875% Senior Notes in January 2026.
The Q1 2026 filing presents a company at a critical crossroads, balancing aggressive growth in originations against systemic operational and financial risks. The successful scaling of the Consumer Direct channel and the strategic exit from reverse mortgages provide a clear path to a higher-quality business model. However, the immediate financial results are marred by a 71% drop in diluted EPS and a rising cost base that threatens to erode the gains from increased volume. Investors are essentially betting on the execution of the 'capital-light' pivot. The critical path forward depends on the closing of the FAR transaction and the ability to maintain a stable hedge against MSR volatility without draining cash. While the growth in UPB to $334 billion is impressive, the trade-off is a heightened sensitivity to interest rate shocks and a precarious relationship with debt covenants that leaves little room for error.