Walter Investment to Enter FHA/VA Origination Market





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In building out its retail lending network, Walter Investment Management Corp. is also expanding its loan products to include all government-backed loans.

The giant servicer has received approval to originate Federal Housing Administration, Department of Veterans Affairs and Department of Agriculture single-family loans.

“Over the course of the last 90 days, we secured all the authorities we need to expand our FHA, VA and USDA products, which will add to our competitive posture,” WIMC chairman and chief executive Mark O’Brien said in discussing the company’s second-quarter earnings.

Another executive noted that Walter Investment is using its huge Fannie Mae and Freddie Mac servicing portfolio to mine for HARP refinancings. And those high-margin refis are basically covering the cost of building its retail lending network. “That is boots on the ground,” he said.

“We are going to use the base provided by the HARP [refinancings] to fund and move forward with the transition through the rest of 2014 and 2015,” the executive said Monday.

The Tampa, Fla.-based mortgage servicer completed 16,000 Home Affordable Refinance Program transactions in the second quarter, up from 14,000 in the prior quarter.

This increase comes at a time when the overall number of HARP refis is trending down and the Federal Housing Finance Agency under Director Mel Watt is conducting a multicity tour to reach eligible HARP borrowers who have not refinanced yet.

Walter Investment originated $2.3 billion in loans through portfolio refinancings and its retail channel. It originated another $2.1 billion though its correspondent channel.

One executive noted that HARP refis have the highest gain-on-sale margins of any channel and the servicer has “340,000 in the money” loans that are eligible for a HARP refinancing. “The current rate environment is pretty accommodative to our continued efforts to recapture those clients,” he added.

The FHFA has extended the HARP program through 2015 and the giant servicer continues to eye servicing portfolios that have HARP content.

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