Huge MSR Sale at Walter Investment

Mortgage News

Mortgage Daily Staff

                                                 August 9, 2016

A massive sale of mortgage servicing rights on residential loans has been negotiated by Walter Investment Management Corp.

An announcement Tuesday indicated that the Tampa, Florida-based
firm has agreed to sell MSRs on $35 billion in home loans.

The purchase price for the MSRs on the seasoned conventional mortgages works out to around $231 million, the statement said.

The buyer in the transaction in New York-based
New Residential Investment Corp.

In addition,
New Residential has agreed to purchase
substantially all of the assets of Walter Capital Opportunity LP along with related assets owned by Walter Investment.

That deal, which
collectively represents MSRs on approximately $37 billion in loans, has a price tag of roughly $283 million.

Furthermore, the news release indicated that New Residential-subsidiary New Residential Mortgage LLC has entered into a forward flow arrangement to
acquire MSRs on newly originated loans.

The flow arrangement, which has an initial term of three years, is subject to an agreement on pricing by both parties.

Walter Investment-subsidiary Ditech Financial LLC will subservice the loans that New Residential Mortgage acquires the MSRs on.

The transactions, which are expected to close in the second-half 2016, are subject to approval by Fannie Mae, Freddie Mac and regulators.

Walter Investment, which disclosed Tuesday that it has named Anthony Renzi chief executive officer, reported a mortgage servicing portfolio of 1,792,928 total loans for $220.823 billion as of June 30.

In the earnings report, Walter Investment Management Chairman and Interim CEO George M. Awad noted that a staggering $380 million second-quarter loss before taxes was driven by external factors like the declining interest rate environment and internal operational inefficiencies.

Mortgage Daily Staff

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