Included in Walter Investment Management Corp.‘s share of the joint acquisition of assets from the Residential Capital LLC bankruptcy are mortgage servicing rights on more than $50 billion in agency loans — potentially positioning the company for a spot among the nation’s 10-biggest mortgages servicers. As if that weren’t enough, the firm has hundreds of billions of dollars more in its servicing rights pipeline. In addition, Walter Investment is picking up the former lending giant’s residential origination platform.
An Oct. 24 announcement from ResCap indicated that a joint bid of $3 billion made by Walter Investment and Ocwen Loan Servicing LLC was approved as the winner by the bankrupt company.
The total remaining ResCap servicing portfolio is estimated by Mortgage Daily at around $200 billion.
In its third-quarter earnings report, Tampa, Fla.-based Walters Investment reported that it was putting up $540 million of the purchase price for the ResCap assets and receiving servicing rights on 400,000 Fannie Mae mortgages for $50.4 billion, $183 million in servicing advances and the ResCap originations and capital markets platforms.
In its heyday, ResCap was an origination force — with residential loan production reaching $179 billion in 2003. But by last year, production had diminished to $56 billion.
Walter Investment said it completed the acquisition of Reverse Mortgage Solutions Inc. on Nov. 1. RMS was referred to in the report as “the preeminent originations and servicing platform in the reverse mortgage space.”
As of June 30, subsidiary Walter Mortgage Co. serviced $81.8 billion, according to a filing with the Securities and Exchange Commission. With the acquisition of the ResCap servicing rights, the portfolio will potentially climb above $130 billion — positioning the company among the 10 biggest residential loan servicers based on Mortgage Daily data.
The total acquisition pipeline of servicing platforms exceeds $500 billion at Walters Investment. One of the pending deals involves exclusive negotiations with Walter Investment for servicing rights on more than $110 billion in loans — which would thrust the company into the top-10 arena.
Earnings before taxes during the three months ended Sept. 30 were $11 million. A year prior, there was a $3 million loss.
Included in the third-quarter total was $18 million in income from servicing and $4 million from loans and residuals.
As of Sept. 30, there were more than 2,600 employees on board at Walter Investment.