FBR has downgraded Nationstar to “market perform” from “outperform.”
The firm also downgraded Walter Investment to “underperform” from “market perform.”
Walter Investment Management posted a fourth-quarter net loss of $44 million, and revenues of $1.5 billion for the full year.
Declines in net servicing fees, changes in valuation inputs and other factors affected the company’s performance.
Total revenue for the year ended Dec. 31, 2014 was $1.5 billion, a decline of $315.3 million, or 17% as compared to the year ended Dec. 31, 2013, primarily related to a $181.9 million decline in net servicing fees and revenues comprised of a $321.6 million decrease in the fair value of mortgage servicing rights offset by a $143 million increase in gross servicing revenue and fees due to growth in the third-party servicing portfolio in the company's servicing business.
There was also a $136.8 million decline in net gains on sales of loans reflecting lower locked volumes in the consumer lending channels and a shift in mix to the lower margin correspondent channel in the Originations business.
Nationstar posted fourth-quarter net income of $19 million, or $0.21 per share, down from $111 million or $1.22 per share in the third quarter.
Core EPS for the quarter was $0.58, down from $0.80 in the third quarter. Core EPS was down principally related to increased amortization and higher servicing expenses in the quarter.
For the full year, net income surged to $221 million, or $2.45 per share, up from $217 million, or $2.40 per share for full-year 2013.