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RMS President Ousted in Major Walter Leadership Shake-Up

The president of top-10 industry lender Reverse Mortgage Solutions, Inc. (RMS) was released from the company this week as part of a larger leadership shake-up at parent company Walter Investment Management Corp. (NYSE: WAC), sources close to the company have confirmed.

Among nine executive departures effective Thursday, former RMS President Christopher Mullins will no longer be with the company. He will be replaced by Walter executive Jeff Baker, who will report to Walter’s new CEO as of August, Anthony Renzi, sources have confirmed.

Along with Mullins, other departing Walter executives include David Schneider, president of Walter’s Ditech Financial LLC business; as well as Sheryl Newman, Greg Williamson, Steve Stein, Rich Smith, Jim Van House, Arlene Hyde and Catherine French.

The terminations are part of Walter’s plans to make its operating team “flatter,” with the goal of improving company communication and simplifying its management structure, according to an internal memo issued by Renzi and obtained by RMD.

Walter reported a net loss of $232.4 million, or $6.49 per share, for the second quarter ending June 30, 2016—a sizable loss compared to a year ago, when the company reported a net loss of $38.1 million, or $1.01 per share, for the comparable quarter.

Meanwhile, the company’s reverse mortgage operations, comprising the RMS and Security One Lending platforms, reported a loss of $9.1 million, a decrease of approximately $11.7 million compared to the prior year quarter. Year-to-date, RMS totals 1,643 Home Equity Conversion Mortgages through September 2016, according to the latest industry data.

Changes to the company’s management structure were perhaps foreshadowed in comments made by Walter leadership during the second quarter earnings call, which discussed the beginning of a “re-engineering project” focused on improving various aspects of the company’s operations, including the evaluation of strategic options for its reverse mortgage business.

“Consistent with our strategy for Walter, options include pursuing third-party capital to purchase our existing securitized loan book, and entering into flow arrangements for future reduction and sub-servicing,” said Walter Chief Financial Officer Gary Tillett during the call. “If we are successful in this endeavor, we will be able to significantly reduce our future capital commitments to the business.”

Mullins’ departure arrives one year after joining RMS as the company’s president. His arrival came just four months after former RMS president and CEO Scott Clarke announced his retirement in June 2015.

Before accepting the position with RMS, Mullis served as chief operating officer at American Advisors Group from June 2009 to April 2015.

Walter Investment Management Corp. acquired RMS for $122 million in November 2012; and Security One Lending in a deal valued at up to $31 million in cash in January 2013.

Walter did not return RMD’s request for comment as of press time.

Written by Jason Oliva