As losses continued at Walter Investment Management Corp., the company warned about its ongoing viability and restated income for prior period. Home lending tumbled.
During the three months ended June 30, losses before taxes were $93 million. Walter cut its losses from $380 million in the second quarter of last year.
Those details, as well as other operational and financial results, were included in the second-quarter 2017 earnings report from the Fort Washington, Pennsylvania-based company.
Earnings, however, swung from a $4 million profit
in the first-quarter 2017.
Walter said it filed an amended annual report for 2016 as well as amended reports for the second-quarter 2016, third-quarter 2016 and first quarter of this year. The restatements were attributed to an error in the calculation of the valuation allowance on the net deferred tax assets balance.
Walter warned about its ability to continue as a going concern because of continued losses.
“Due to the possibility for a prepackaged plan of reorganization under Chapter 11 of Title 11 of the United States Code, substantial doubt has been raised about the company’s ability to continue as a going concern, and the audit opinion included in the company’s amended annual report on Form 10-K/A contains a going concern emphasis paragraph and to the consolidated financial statements included therein discusses such matters and management’s plans in respect thereof,” the report stated.
Residential loan originations came to $4.288 billion during the second-quarter 2017.
Volume receded from $5.155 billion three months earlier and $4.950 billion one year earlier. The quarter-over-quarter deterioration contrast reports of growth from many of Walter’s peers.
During the first-six months of this year, mortgage production amounted to $9.443 billion.
The most-recent three-month period included $1.195 billion in retail business, $0.222 billion in wholesale lending, $2.778 billion in correspondent acquisitions and $0.092 billion.
Refinance share of forward originations was
43.7 percent, sinking from 55.6 percent the prior period.
Home-lending activity during the third quarter is likely weakening based on locked volume, which fell to $4.2 billion in the second quarter from $4.9 billion in the first quarter.
Walter serviced
1,165,921 loans with a collective unpaid principal balance of $138.295 billion as of mid-year 2017. The servicing portfolio was reduced from 1,214,942 loans for $144.121 billion as of March 31 and 1,792,928 loans for $220.823 billion as of June 30, 2016.
The latest total consisted of $105.904 billion in forward mortgages serviced for third parties, $9.949 billion in reverse mortgages serviced for investors and
$22.442 billion in loans owned by Walter.
Another
887,501 loans for $115.419 billion were subserviced as of the most-recent date.
The first-half 2017 concluded with 4,400 employees.
Staffing subsided by a hundred people versus three months earlier. Headcount has been slashed by 1,200 employees since mid-2016.
