Financial statements for a reverse mortgage lender recently acquired by Walter Investment Management Corp. are being restated, the company disclosed Friday.
The Tampa, Fla.-based company acquired Reverse Mortgage Solutions Inc. in November 2012. At the time, Walter referred to the company as “the preeminent originations and servicing platform in the reverse mortgage space.”
In January, Walter filed a Form 8-K with the Securities and Exchange Commission that included historical audited annual financial statements for RMS in addition to unaudited consolidated balance sheets as of Sept. 30, 2012.
But after the acquisition was completed, Walter discovered a failure to record some estimated liabilities to investors relating to servicing errors by RMS, according to an SEC filing Thursday.
The filing went on to discuss potential liability incurred by a servicer on loans insured by the Federal Housing Administration when FHA timeframes aren’t met.
“Although the company has not determined the full effect of these matters and is completing its review thereof, on May 31, 2013, based on preliminary conclusions after discussions with RMS’ historical independent registered public accounting firm, management of the company concluded that the RMS historical financial statements, and the related report of RMS’ historical independent registered public accounting firm, should no longer be relied upon, and should be restated to reflect the error described above,” the filing stated.
While Walter is diligently reviewing the matter, it doesn’t expect the restatement to have a material impact on its own financial position.