Single-family loan originations moved lower for the third consecutive quarter at Walter Investment Management Corp., and a further decline is likely. The company set a target date for bankruptcy.
Third-quarter earnings data from Walter reflected a $124 million loss, not quite as bad as the $158 million loss during the same-three months last year.
Losses did worsen, however, from the second-quarter 2017, when the Tampa, Florida-based mortgage banking firm had a loss of $93 million.
Mortgage originations were $3.659 billion, falling from $4.288 billion the prior period and bringing year-to-date volume to $13.102 billion. Loan production has diminished each quarter since the fourth-quarter 2016.
No reverse mortgage originations were reported for the most-recent quarter.
Fourth-quarter 2017 volume is
likely seeing further decline based on locked volume, which fell to $3.3 billion during the three months ended Sept. 30 from $4.2 billion in the preceding three-month period.
In the third-quarter 2016, mortgage originations were $5.547 billion.
Third-quarter 2017 saw a refinance share of 50.4 percent,
fattening from 48.0 percent the second quarter.
“During the quarter, we remained focused on strengthening our core businesses of originating and servicing Fannie, Freddie and Ginnie Mae loans under the Ditech Financial brand and servicing reverse loans, while pursuing opportunities to maximize results in our legacy businesses,” Walter Investment Chief Executive Officer and President Anthony Renzi said in the report. “We are working to increase productivity and efficiency across the company. As part of these efforts, we have made meaningful progress consolidating our core business footprint, including making tough decisions to close locations.”
Walter serviced 1,014,283 residential loans that collectively had an unpaid principal balance of $114.418 billion as of Sept. 30, 2017, including $102.526 billion in third-party servicing and $11.892 billion in owned assets.
In the report a year ago, the portfolio was 1,744,895 loans with an aggregate unpaid principal balance of $214.069 billion. The year-earlier balance included reverse mortgage assets and third-party servicing which weren’t disclosed in the latest report.
An additional 723,280 loans were sub-serviced for $101.089 billion as of the most-recent date, while an $10.112 billion in reverse mortgages were owned.
At the conclusion of the third-quarter 2017, there were roughly 4,100 people on Walter’s payroll. Staffing
was reduced by 300 employees from mid-year 2017 and 900 positions fewer than on the same date last year.
“As previously announced, we completed an important step in our financial restructuring when we launched the solicitation of certain of our creditors on Nov. 6, 2017,” Renzi noted in the report. “We expect our business operations to continue as normal during the execution phase of our financial restructuring, and we expect to emerge from this process as a stronger company that is better positioned to serve our customers.”
The final restructuring plan includes a pre-packaged plan of reorganization under chapter 11 of the U.S. Bankruptcy Code. Walter needs to make the filing by Nov. 3 and intends to complete it by Jan. 31, 2017.
The company’s continued listing on the New York Stock Exchange is unlikely.
