Subprime Servicer, Investor Begins Trading on NYSE

Tampa, Fla.-based Walter Investment Management Corp. (WAC) begins trading today on the New York Stock Exchange, after former finance business of Walter Industries Inc. has completed its merger with Hanover Capital Mortgage Holdings Inc. and formed the new firm. The company is the latest addition to a growing field of mortgage servicers and investors specializing in managing subprime, non-conforming and other credit-challenged mortgage assets; it currently manages a $1.8bn portfolio, but expects to grow that total through acquisitions, it said in a press statement on Monday morning. The firm also offers full loan sale advisory and valuation services for private companies and government agencies through Hanover Trade, as well as insurance services focused on property casualty lines supporting the mortgage servicing business. “We are excited about these next steps for Walter Investment Management Corp. and the opportunities available to us,” said chairman and CEO Mark J. O’Brien. “We have a strong, seasoned management team in place and expect our $1.8 billion mortgage portfolio to return a stream of steady dividends to our shareholders for years to come.” Though many lenders have struggled in the current environment, O’Brien stressed that Walter Investment has continued to generate strong, stable performance. “Our mortgage portfolio is almost entirely fixed rate and was originated with a consistent, disciplined underwriting approach,” he said. “With our high-touch mortgage servicing platform, the result is a 30-day delinquency rate that has remained well below six percent.” The company maintains servicer ratings of “Average/Select Servicer” from Standard and Poors and “RPS 3-” from Fitch. Like many other firms in its space, Walter Investment is looking to pursue what it calls “opportunities to leverage its asset management capabilities and unique servicing platform” — in other words, the firm will look to acquire servicing rights and/or whole loans to expand its current portfolio. “Our approach has a track record of producing prime results from sub-prime assets and we believe there is a tremendous need for that capability in today’s environment,” said O’Brien. For more information, visit Write to Paul Jackson at Disclosure: The author held no relevant investment positions when this story was published. Indirect holdings may exist via mutual fund investments.

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