Losses turned to profits during the last quarter of 2016 at Walter Investment Management Corp. The mortgage servicing portfolio significantly declined.
During the final-three months of last year,
income prior to income taxes came to $27 million. Earnings swung from a $158 million loss the prior quarter.
The results, in addition to other operational and financial metrics, were included in the Tampa, Florida-based firm’s fourth-quarter 2016 earnings report.
Walter had a whopping $208 million loss in the final quarter of 2015.
From Jan. 1 through the end of 2016, losses before income taxes were $790 million. Losses worsened from $404 million during all of 2015.
“The performance we saw during fourth-quarter 2016 and full-year 2016, is not acceptable to myself, our leadership team, our associates and the Walter board of directors,” Walter Investment Chief Executive Officer Anthony Renzi said in the report. “Since joining Walter in September, my focus has been on putting together a plan to reduce our cost structure and improve efficiency, with a strong emphasis on performance management and controls. We also restructured our leadership team by adding key leaders to drive the way forward.”
During the three months ended Dec. 31, 2016, Walter originated $5.567 billion in residential loans. Business was hardly changed from $5.547 billion in the third quarter and slightly off $5.776 billion in the fourth-quarter 2015.
Fourth-quarter 2016 volume consisted of $5.336 billion in forward loans and $0.232 billion in reverse mortgages.
For all of last year, mortgage production amounted to $21.218 billion — including $20.345 billion in forward mortgages and $0.872 billion in reverse mortgages. Activity retreated from $26.548 billion in 2015.
Full-year 2016 forward mortgage production consisted of
$6.713 billion in consumer originations, $0.130 billion in wholesale lending and $13.487 billion in correspondent acquisitions.
Walter noted that it re-entered the wholesale channel
in the fourth-quarter 2016 after exiting the business in the first-quarter 2014.
Refinance share on forward originations was
58.8 percent last year, slightly wider than 58.3 percent in 2015.
At the close of 2016, Walter serviced 1,249,099 loans with an unpaid principal balance of $146.288 billion. The servicing portfolio was slashed from 1,744,895 loans for $214.069 billion three months earlier and 1,860,818 loans for $229.944 billion one year earlier.
The year-end 2016 total consisted of $112.936 billion in third-party forward servicing, $12.690 billion in forward loans on the balance sheet, $10.341 billion in third-party servicing on reverse mortgages and $10.321 billion in owned reverse mortgages.
Another
934,479 loans for $120.819 billion were sub-serviced as of the most-recent date.
Delinquency of at least 30 days on the total mortgage servicing portfolio was 11.03 percent as of Dec. 31, 2016, worsening from 8.85 percent at the conclusion of 2015.
Deterioration in delinquency on third-party servicing
was “primarily due to an increase in loans that were 30 to 60 days past due following the introduction of new servicing technology, changes in servicing practices, site consolidation and other developments.” On owned loans, delinquency rose “due to an increase in delinquent mortgage loans that we are required to record on our consolidated balance sheets as a result of our unilateral right to repurchase such loans from Ginnie Mae, combined with an increase in the 30 to 60 day past due loans as previously discussed.”
Last year concluded with around 4,900 employees. Headcount
was reduced from 5,000 people three months earlier and 5,900 one year earlier.
A Jan. 12 subpoena was received by Reverse Mortgage Solutions from the Office of Inspector General Department of Housing and Urban Development
requesting documents and disclosures on some loans. The investigation, which is being conducted in coordination with the Department of Justice, could lead to a demand or claim under the False Claims Act.
RMS ended new originations on Jan. 17.
