$1 Billion Deal to Acquire Servicer

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Walter Investment Management Corp. will pick up a $37 billion servicing portfolio with its planned acquisition of Green Tree.

An agreement was announced Monday by Tampa, Fla.-based Walter Investment to acquire GTCS Holdings LLC, otherwise known as Green Tree. The deal is valued at $1.1 billion and will be financed through the issuance of around 1.8 million common shares.

Subject to government approval, the acquisition is expected to close in the third quarter.

St. Paul, Minn.-based Green Tree special services 745,000 loans for $37 billion. Last year, Moody’s Investors Service raised Green Tree’s servicer rating for the second time in a year. Moody’s cited an improvement in Green Tree’s loss mitigation.

Green Tree Servicing Inc. acquired the liquidated Conseco Finance out of Conseco Inc.’s 2002 bankruptcy. Green Tree agreed in 2007 to be acquired by an investor group led by Centerbridge Partners L.P. from affiliates of Fortress Investment Group and from affiliates of Cerberus Capital Management.

In 2009, Green Tree Servicing LLC picked up the platform assets and mortgage servicing rights on securitized home-equity loans from Irwin Financial Corp., while Green Tree Servicing bought a servicing platform from Origen Financial Inc. in 2008.

Walter Investment announced in November 2010 plans to acquire a $90 million mortgage portfolio. Just prior to that, it purchased two pools of residential first liens for $20 million, and it agreed in October to acquire default servicer Marix Servicing LLC from Marathon Asset Management L.P., creating “one of the nation’s top 10 servicers of subprime mortgages.”

The Green Tree purchase will disqualify Walter Investment from operating as a real estate investment trust. The REIT manages $1.8 billion of assets and employs roughly 340 people.

“This acquisition will transform Walter Investment into a leading business services company focused on recurring, fee-based revenues generated from an ‘asset-light’ platform,” the press release said.

Walter Investment Chairman and Chief Executive Officer Mark J. O’Brien said in the statement that the acquisition will enable the company to “capture a significant share” of the special servicing market.

Keith Anderson is the CEO of 1,900-employee Green Tree.

Mortgage Expert

Mortgage Daily Staff



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