Quarterly home lending at Walter Investment Management Corp. retreated. It also realized a smaller servicing portfolio, continued income regression and diminished headcount.
The firm reported that it had a $380 million loss before income taxes during the three months ended June 30, widening from a $279 million loss earmarking the first quarter.
This information, in addition to other operational and financial data, was disclosed in the Tampa, Florida-based financial services provider’s second-quarter 2016 earnings report.
Walter Investment’s earnings also deteriorated from the $15 million loss highlighted in the year-earlier period.
“Our results continue to fall short of expectations, driven by both external factors such as the declining interest rate environment as well as internal operational inefficiencies,” George M. Awad, executive chairman of the board and interim chief executive officer, said in the report.
From April 1 to June 30, Walter Investment originated $4.951 billion in residential loans, including traditional and reverse mortgages.
While most of the residential loan provider’s peers have reported quarter-over-quarter gains, Walter Investment’s home-lending activity subsided from the $5.152 billion funded in the prior three-month period.
The mortgage company also lost traction from the second-quarter 2015, when production reached $7.699 billion.
Altogether, the company originated $10.103 billion new mortgages during the first-six months of 2016.
Second-quarter 2016 originations were comprised of $1.561 billion in consumer loans, $3.189 billion in correspondent acquisitions and $0.201 billion in reverse mortgages.
Rising to $5.3 billion from $4.6 billion in the first quarter, Walter Investment’s locked volume suggests mortgage production gains in the third quarter.
At the end of June 2016, the mortgage servicing portfolio totaled 1,792,928 total loans at $220.823 billion.
The portfolio thinned from 1,856,553 loans at $230.962 billion at the end of March and 1,894,706 loans at $228.944 billion as of mid-2015.
The June 30, 2016, total included $187.618 billion in forward loans serviced for third parties, $10.190 billion in reverse mortgages serviced for third parties, $12.683 billion in owned forward loans and $10.332 billion in reverse mortgages on the balance sheet.
As of the end of the second-quarter 2016, another 407,417 loans at $60.672 billion were ascribed to the home lender’s sub-servicing portfolio.
Walter Investment’s headcount was down to 5,600 people at the close of the second-quarter 2016 from the March-ended total staff of 5,700 and the 2015 mid-year tally of approximately 6,000 employees.
The company’s earnings announcement revealed Anthony Renzi would assume the role of chief executive officer in the fourth quarter.
Renzi comes from Citigroup Inc., where he most recently served as chief operating officer, managing director and head of operations for Citi’s North America retail bank, commercial bank and CitiMortgage Inc.
