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Walter Investment (WAC) Closes Purchase of Reverse Mortgage Solutions

 November 01, 2012 02:31 PM


(By Balaseshan) Walter Investment Management Corp. (NYSEAMEX: WAC) said it has completed its acquisition of Reverse Mortgage Solutions Inc. (RMS).

The acquisition of RMS positions Walter Investment as a full service leader in the $140 billion reverse mortgage servicing sector with sustainable growth opportunities in the servicing business, as well as strong earnings and cash flow driven by a highly successful originations business.

The acquisition represents an attractive extension to Walter Investment's high-margin, fee for service business model. RMS, based in Spring, Texas, provides a full suite of services to the reverse mortgage sector, including servicing, loan origination, securitization and technology.

[Related -Contrarian Traders Eye Call Options On Walter Investment Management Corp.]

RMS currently services about $12.4 billion in UPB of reverse mortgages and has issued about $1.8 billion of reverse mortgage backed Government National Mortgage Association (GNMA) securities (HMBS or Home Equity Conversion Mortgage Backed securities) to date, ranking it as the fourth largest reverse mortgage servicer and largest issuer of HMBS in the sector this year.

"We are extremely pleased to have completed the acquisition of RMS, further enhancing our capital-efficient, high-margin, fee for service business model. Importantly, we look forward to combining the deeply experienced RMS team with the existing Walter team to leverage the combined talents of both organizations," said Mark O'Brien, Chairman and CEO of Walter.

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The company said the acquisition of RMS creates a natural extension of its forward platform into the reverse mortgage space and will allow WAC to capitalize on the customer overlap between the two entities.

"We believe the reverse mortgage product has significant potential for future growth, and RMS is well positioned to capitalize on the coming opportunities. We anticipate RMS will continue to be highly successful and will drive increased value for our shareholders," said O'Brien.

WAC is trading down 7.10 percent at $44.90 on Thursday. The stock has been trading between $17.87 and $48.54 for the past 52 weeks.

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