Walter Investment Management Corp. (NYSE: WAC), a national mortgage servicer and former originator of reverse mortgages, received notice from the New York Stock Exchange this week that the company fell below compliance standards after its average closing price fell below $1 over a consecutive 30-day trading period.
As of July 13, the company received notice and is now subject to a six-month “cure period,” during which the company can regain compliance if its stock closes at $1 or above and maintains a 30-day average of at least $1. If it does not meet cure standards, per NYSE rules, it may face becoming delisted from the exchange.
The company has experienced an ongoing decline in its share price in recent months, including a double-digit decline in March following the disclosure of an accounting error that rendered its 2016 annual report unreliable. Sustained losses across Walter’s business channels and a falling share price led analysts to note that Walter could face bankruptcy, a restructuring or require asset sales to raise cash.
Until January, Walter owned and operated reverse mortgage origination channels under the RMS and Security One brands. It purchased RMS in November 2012 for $122 million and later acquired Security One Lending in May 2013 for up to $31 million. But the Fort Washington, Pa.-based firm exited originations completely in January, while maintaining its participation in reverse mortgage servicing.
In a press release issued Friday, Walter stated that it expects to acknowledge receipt of the NYSE’s notice and will express its intention to seek to cure the deficiency in compliance. The stock will continue to be listed on the exchange in the interim as WAC, with an added .BC to denote the company is “below compliance.”
Written by Elizabeth Ecker