Consumer Finance Tidbits: Issue 26-19

Research evidence excerpt

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Consumer Finance

Consumer Finance Tidbits: Issue 26-19

Industry Overview

Mixed vibes in mortgage land ahead of RKT 2Q print

02 August 2026

Recent industry data has turned incrementally more cautious ahead of Rocket’s 2Q

earnings. PennyMac’s results came in below expectations as higher mortgage rates

weighed on origination demand, gain-on-sale margins, and profitability, while

management cited a more competitive mortgage environment and announced cost

actions to offset pressure. Inside Mortgage Finance estimated Rocket (RKT) first-lien

volume for 2Q at $43.5B. BofA/Consensus estimates for RKT’s total mortgage volumes

are $49.2B (includes 2nd lien). Our analysis suggests 2nd lien loans have averaged around

7-9% of total production at RKT in recent quarters, suggesting there is modest

downside ($1-2B) to origination estimates if 2Q follows historical trends. That said,

large bank earnings which featured nice q/q increases in originations and RKT’s

conservative market outlook point to higher origination volume in 2Q.

Equity

United States

Consumer Finance

Apple Launches Klarna-Powered “Apple Upgrade” Program

Apple launched Apple Upgrade, a new Klarna-powered leasing program for iPhone, iPad,

Mac and Apple Watch that replaces its legacy U.S. upgrade and installment offerings.

Customers can lease devices directly through Apple and upgrade, purchase or return

them at lease-end, with Klarna providing the financing infrastructure. Our take: We view

the announcement directionally positively for Klarna. The partnership validates its

underwriting and embedded-finance capabilities within one of the world’s largest consumer

ecosystems. We await further clarity on the mechanics of the leasing model and its impact

to KLAR’s financials over time (notably revenue recognition, balance sheet intensity, cash

flow dynamics); however, we believe that given recent price hikes there will be strong

demand for this solution, which should serve to expand the top-of-funnel for KLAR.

UPST gets soft bank charter approval + new forward flow

Upstart announced a new $4 billion multi-year forward-flow agreement with Castlelake,

…