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Mortgage Business Better at Walter

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Home lending fared better at Walter Investment Management Corp. Servicing and company-wide earnings also saw an improvement.

In the three months ended March, Walter’s first-quarter earnings report showed residential lending volume at $5.778 billion.

Production inched ahead of the $5.378 billion originated in the fourth-quarter last year and climbed beyond the $3.760 billion accounted for in the first three months of 2014.

“Originations volumes are meeting or slightly exceeding expectations for the market overall assisted by the low rate environment,” the company’s first-quarter earnings announcement stated.

First-quarter activity included $5.468 billion in traditional mortgages, more than the $5.022 funded three months earlier and $3.896 billion funded a year earlier.

At $3.651 billion, the correspondent lending channel contributed the bulk of traditional activity. The retention business originated $1.633 billion. Consumer direct loans accounted for $0.098 billion, and retail originators closed $0.086 billion in loans.

As of the first quarter, the report indicated it restructured its reporting segments into originations, servicing and reverse mortgage.

The reverse mortgage segment dropped to $0.310 billion in closed loans from $0.356 billion in the last three months of 2014. This year’s first-quarter originations were stronger, however, than the $0.245 billion listed for last year’s first quarter.

“We expect the originations market in the reverse sector to be impacted as the industry implements the new financial assessment guidelines,” the announcement stated. “Given the lead time to implementation we would expect a smooth transition over the next several quarters.”

The pull-through adjusted locked volume jumped to $6.9 billion from $5.1 billion as of the fourth-quarter 2014 — suggesting a potential up tick in upcoming business.

At the end of March, Walter said it serviced 1,675,792 loans at $195.281 billion.

The lender’s servicing portfolio was 1,690,630 serviced units at $194.787 billion as of Dec. 31, 2014.

The servicing portfolio was 1,714,590 loans serviced for $190.978 billion as of March 31, 2014.

The latest total included $12.9 billion in on-balance sheet residential loans and real estate owned. Capitalized servicing rights of $182.4 billion comprised the remaining amount.

Walter additionally reported its sub-serviced 417,075 mortgage loans at $49.7 billion as of the end of March.

Also at the end of March this year, the mortgage provider said its total servicing portfolio associated with reverse loans came to 114,208 units for $18.656 billion.

This total included $9.730 billion in on-balance sheet residential loans and real estate owned associated with reverse loans. The remaining $8.925 billion was attributed to Walter’s third-party servicing portfolio associated with reverse loans.

From the end of last year to the end of March, the delinquency rate of at least 30 days decreased by 81 basis points to 8.66 percent. As well, the recent rate improved over the 10.08 percent delinquency as of March 31, a year prior.

Though company-wide income before taxes was at a $50 million loss, the flow of red ink slowed from the $109 million loss reported in the last three months of 2014.

Still, the latest earnings swung from the $29 million profit accounted for in the first-quarter a year ago.

Despite a $42 million profit from the originations segment, Walter’s overall income also included a $51 million loss from servicing and a $13 million loss from reverse mortgage.

Though exact numbers were not accounted for in the most recent report, Walter said it employed more than 6,000 employees.

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