Investor Relations :: News Release
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|Walter Investment Management Corp. Announces Definitive Agreement To Acquire $93 Billion UPB Of Servicing Assets|
The portfolio of assets acquired consists of over 650,000 loans that are projected to be approximately 80% current at transfer. The transaction will have an economic closing as of
The Company expects the revenues from these MSRs to drive servicing EBITDA margins within its targeted range of 40% to 45% over the life of the portfolio. However, servicing revenues and margins are expected to be modestly lower than these averages in the first year as a result of the higher initial delinquency rate of the portfolio, the incurrence of certain one-time, up-front transfer costs and the expected ramp in earnings over time that occurs in incentives and performance-based fees. The Company expects a servicing EBITDA contribution of between
In addition to the servicing revenues associated with these MSRs, the pool of assets being acquired also includes a significant number of customers that are eligible for the HARP 2.0 refinancing program. The Company expects to utilize the ResCap originations platform to target the estimated 290,000 accounts in the portfolio that are potentially eligible for HARP refinancing. Based on the expected levels of eligibility, pull through rates, and net originations margins, the Company expects to realize significant additional EBITDA associated with HARP refinancings in 2013, estimated to be in the range of
"The addition of these attractive residential servicing assets to our portfolio, at returns that exceed our hurdle rates, leverages not only our best-in-class servicing platform, but also the originations capabilities and profitability of the ResCap platform, as this pool contains a significant HARP-eligible population" continued O'Brien. "We continue to make substantial progress toward the closing and integration of the ResCap acquisition and anticipate that the origination capabilities of that platform will be a key component in driving increased profitability from our now much larger portfolio of serviced assets."
"We continue to see significant opportunity for growth in the sector based on the meaningful structural changes that have taken place and that are continuing to evolve. We are taking very deliberate steps to position
Disclaimer and Cautionary Note Regarding Forward-Looking Statements
This press release contains forward-looking statements, including forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements include, but are not limited to, statements concerning Walter Investment's plans, beliefs, objectives, expectations and intentions and other statements that are not historical or current facts. Forward-looking statements are based on Walter Investment's current expectations and involve risks and uncertainties that could cause actual results to differ materially from those expressed or implied in such forward-looking statements. Factors that could cause Walter Investment's results to differ materially from current expectations include, but are not limited to: the achievement of anticipated EBITDA margin levels which can be adversely affected by costs of our business that are higher than expected, the inability to achieve anticipated incentive fees which are subject to factors beyond the Company's control, customer take up rates of HARP refinancing and other factors that may affect the Company's earnings or costs; the close of the ResCap acquisition on
EBITDA is presented in accordance with its definition in the Company's credit agreements and represents income before income taxes, depreciation and amortization, interest expense on corporate debt, transaction and integration related costs, the net effect of the non-residual VIEs and certain other non-cash income and expense items. EBITDA also includes an adjustment to reflect synergies and, for periods prior to the acquisition, adjustments to reflect Green Tree as having been acquired at the beginning of the year. EBITDA is not a replacement or substitute for amounts or measures presented in accordance with generally accepted account principals, and its presentation may be materially different from amounts reported on that basis.
Investor and Media, Whitney Finch, Vice President of Investor Relations, +1-813-421-7694, email@example.com
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