Walter Investment Management, the proud new owner of Green Tree Servicing, posted a $3.4 million loss in the second quarter, after booking $9 million of transaction costs related to the deal.
The Tampa-based Walter Investment completed its acquisition of the servicer's parent company, GTCS Holdings Inc., on July 1. Prior to the merger, Green Tree serviced about $37 billion in loans, ranking 24th nationwide, according to figures compiled by National Mortgage News and the Quarterly Data Report.
Green Tree's operations are not included in WIM's 2Q results.
The Green Tree deal was valued at $1.1 billion, including $737 million of cash paid to the former owners and the payoff of $275 million of secured debt, according a 2Q SEC filing.
Because of the purchase, WIM no longer qualifies for real estate investment trust status. Previously, the company serviced loans originated by an affiliated homebuilder and also processed loans for other investors. (In November of last year it purchased specialty servicer Marix.)
WIM holds $1.6 billion of residential loans on its balance sheet and services $1.3 billion for other investors.
At June 30, WIM's delinquencies totaled 4.6 %, compared to 4.3% in the year ago period. The company said the increase reflects acquisitions of non-performing assets.
Second quarter loss severity was 15.4%, down from 16.3% for the first quarter but up from 14.2% for the second quarter 2010. Loss severity is determined by the loss on the sale of REO divided by the historical cost basis of REO sold.
