Walter Investment (WAC) announced second quarter results this morning, posting huge gains on its loan originations.
Net income for the second quarter of 2013 hit $143.2 million, or $3.75 per diluted share, compared to net income of $0.4 million, or $0.01 per diluted share, in the second quarter of 2012.
The originations segment generated revenue of $251.2 million in the second quarter, an increase of $175.1 million, or 230%, over the prior quarter. "The business continues to ramp, driven primarily by the consumer direct channel, which targets refinancing and recapture of HARP-eligible accounts from the serviced portfolio," the company said in its filing with the Securities and Exchange Commission.
“Walter Investment continues to execute solidly against its strategic plan, producing strong operational and financial results across our major segments in the second quarter,” said CEO Mark O’Brien. “Our core Servicing segment continued to deliver solid growth in profits and exceptional operational performance from both existing and recently acquired portfolios of new business."
The servicing segment generated revenue of $244.9 million in the second quarter, which included $145.4 million of gross servicing fees, $26.3 million of incentive and performance-based fees.
The company did need to make a correction to accounting due to massive acquisitions of mortgage servicing rights and this is reflected in the earning.
"Intangible amortization previously included in the Originations segment for the quarter ended March 31, 2013 of $14.1 million is now reflected as part of net servicing revenue and fees in the Servicing segment and in the consolidated statements of comprehensive income," the filing notes. The company said the change would bring it in line with the earning structure of its peers.
The company also turned a profit in insurance and reverse mortgages.
Further, Walter maintains a strong outlook going forward, even with modest interest rate rises and home price appreciation.
"The Company remains highly confident with respect to the significant levels of both subserviced and MSR purchase opportunities in both the current pipeline and in the overall market opportunity over the next 24 to 36 months," it said.