Walter Faces CFPB, HUDÂ OIG Legal Actions
Reverse, servicing subsidiaries at issue
Nov. 11, 2013
By Mortgage Daily staff
Walter Investment Management Corp. is facing government legal actions on multiple fronts. At issue are its reverse mortgage unit and its high-touch servicing subsidiary.
A subpoena was received on Oct. 2 from the U.S. Department of Housing and Urban Development, Office of Inspector General.
The OIG has requested documents and other information about home-equity conversion mortgages serviced or sub-serviced by subsidiary Reverse Mortgage Solutions Inc.
The Tampa, Fla.-based firm disclosed the subpoena in a filing with the Securities and Exchange Commission.
Walter acquired RMS in November 2012.
The OIG is interested in the curtailment of interest payments on the HECMs and RMS’ contractual arrangements with a third-party vendor for the management and disposition of REO properties.
“The company is responding to the subpoena and at this stage does not have sufficient information to make an assessment of the outcome or impact of HUD’s investigation,” the SEC filing stated.
Walter also disclosed a putative shareholder class action that was filed in federal court filed against it and some of its officers on July 24.
The lawsuit asserts federal securities law claims.
According to the lawsuit, the defendants allegedly made material misstatements or omissions about the integrity of financial reporting, including the reporting of expenses associated with certain financing transactions, and the liabilities associated with the acquisition of RMS.
The alleged actions happened between May 2012 and June of this year. Unspecified damages were being sought for investors of Walter securities/
However, the plaintiff filed a notice of voluntary dismissal last month, and the case was dismissed on Oct. 3.
Walter’s Green Tree unit was notified by the Consumer Financial Protection Bureau on Oct. 7 that CFPB staff is considering recommending that the CFPB take action against Green Tree for alleged violations of various federal consumer financial laws, the SEC filing additionally said.
“Because the company has not been provided with any specific information as to the nature of any alleged violations, the company does not have sufficient information to make an assessment of the existence, nature, outcome or impact of any such violations,” Walter said.
Walter acquired Green Tree, also known as GTCS Holdings LLC, in July 2011. Green Tree is a high-touch, third-party servicer.
