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Walter Originations and Staffing Soar, Servicing Slips

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Mortgage Daily

                                                 August 8, 2013

Quarterly mortgage originations at Walter Investment Management Corp. skyrocketed and are poised to continue ascending. Staffing and earnings also soared. While the size of the mortgage servicing portfolio slipped, a robust pipeline of mortgage servicing rights is likely to reverse the decline.

Residential loan closings amounted to $4.7 billion during the three months ended June 30, second-quarter earnings data released Thursday indicated.

Business soared from the prior quarter’s originations, which were a revised $0.375 billion.

Consumer lending accounted for $3.2 billion of the latest activity, while business lending amounted to $1.5 billion.

Walter’s applications leapt to $9.1 billion from the first quarter’s $2.4 billion, while the locked pipeline more than doubled to $4.2 billion from $1.9 billion.

The mortgage firm additionally reported $0.693 billion in funded reverse mortgage volume, less than the $0.977 billion in the first quarter.

Retail production accounted for 22 percent of second-quarter reverse originations, while 78 percent was generated through the correspondent and wholesale channels.

Including both residential and reverse mortgage activity, year-to-date volume totaled around $6.7 billion.

After adding 1.1 million units to its servicing portfolio during the first half, including 550,000 loans that were boarded in the second quarter, the Tampa, Fla.-based company said it serviced 1.9 million loans for around $197 billion as of June 30.

The servicing portfolio slipped from the end of the first quarter, when it was previously reported at 1.9 million loans for $201 billion.

However, Walter has significantly expanded its mortgage servicing portfolio from 1,001,020 loans for $81.506 billion as of June 30, 2012.

The report indicated that the pipeline of “business development opportunities” is around $320 billion.

“Transaction flow has picked up over the past 30 days, a trend expected to continue over the balance of 2013,” the report stated. “The company remains highly confident with respect to the significant levels of both sub-serviced and MSR purchase opportunities in both the current pipeline and in the overall market opportunity over the next 24 to 36 months.”

Walter noted that its reverse mortgage servicing portfolio increased to 86,795 loans for $14.4 billion as of the end of the second quarter from 83,181 loans for $13.8 billion three months earlier.

Residential loans in the investment portfolio finished June at $11.628 billion, up from $9.482 billion three months earlier.

Income before taxes totaled $239 million in the latest period, soaring from $47 million in the first quarter and from less than $1 million in the second-quarter 2012.

Headcount closed out the second quarter at more than 6,200 employees, growing significantly from 4,800 people as of the end of the first quarter.

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