Walter Investment Management Corp. (NYSE: WAC) is exiting the reverse mortgage origination business, including its wholesale and retail channels under the Reverse Mortgage Solutions and Security One Lending brands. Walter will maintain its reverse mortgage servicing operations under RMS, the company confirmed to Reverse Mortgage Daily.
The changes are effective January 17, 2017, a Walter spokeswoman said.
“We plan to honor all existing commitments and continue to fulfill loans in our originations pipeline,” said Whitney Finch, vice president of corporate communications at Walter. “We remain committed to our Reverse Mortgage Servicing Business which includes funding undrawn amounts that are available to borrowers in our servicing portfolio. This action is expected to impact fewer than 200 employees.”
RMS/Security One recorded 1,996 Home Equity Conversion Mortgage endorsements year-to-date in 2016, according to recent industry data tracked by Reverse Market Insight.
The move arrives after Walter saw its reverse mortgage losses widen during 2016, a year in which the company continued to explore “strategic opportunities” amid recent changes to its leadership and operational structure.
Walter took significant actions to alter its business in October 2016, when it announced the departures of nine company executives as part of its plan to “flatten” its operating team, with the goal of improving company communication and simplifying its management structure.
Among those departures was then-Chief Executive Officer of RMS, Christopher Mullins, a reverse mortgage industry veteran who joined RMS in October 2015. He was replaced by Walter executive Jeff Baker.
The decision to exit reverse mortgage originations is the latest action from Walter to focus on its core servicing and origination businesses.
Earlier this month, the company announced the sale of its indirect wholly-owned subsidiary, GTI Holdings Corp., which is the holding company of Walter’s primary licensed insurance agency, Green Tree Insurance Agency, Inc., to a wholly-owned subsidiary of Assurant, Inc. for a purchase price of $125 million in cash.
Previously, RMS was long the top industry issuer of Ginnie Mae HECM-backed securities (HMBS), until the company was surpassed by American Advisors Group in July 2015. RMS ranked fifth among all HMBS issuers in 2016 with $868 million of HMBS issuance and a total market share of 9.45%.
Written by Jason Oliva