Walter Investment Management Corp. lost $101.8 million in the third quarter, driven by goodwill and intangible asset impairment charges of $60.8 million and noncash charges of $17 million.
It lost
The goodwill charge is related to its servicing portfolio having lower-than-forecasted cash flows because of elevated expenses. This charge wipes out all the goodwill from the servicing portfolio that was on Walter's books.
Walter's servicing business lost $161.6 million on a pretax basis, with revenue of $148.9 million and expenses of $309.7 million. One year ago, revenue was $31.2 million and expenses were $192.8 million.
Meanwhile, the origination business had $51.7 million in pretax income as gain on sale improved by $5.7 million because its Ditech unit
The intangible assets impairment was related to the reverse mortgage segment and was driven by a shift in strategic direction and reduced profitability expectations for the business. The segment lost $23 million on a pretax basis in the quarter, compared with $22.5 million of pretax income one year earlier.
New CEO and President Anthony Renzi
"Clearly we have work to do in a number of important areas but I was encouraged with what I learned and took quick initial actions to simplify, flatten and focus Walter on our customers, operational fundamentals, integration opportunities across our businesses and, most importantly, execution and performance accountability.
"I believe that the strategic pillars of capital efficiency, process efficiency and new leadership along with an engaged workforce are the foundation to achieving our goals of delivering consistent profitability and sustainable growth," he said in the earnings release.
