Walter Investment Management (WAC), which recently won a joint bid with Ocwen Loan Servicing (OCN) to acquire Residential Capital‘s mortgage servicing rights out of bankruptcy, is reporting it swung to a profit in the third quarter.
The company posted net income of $6.41 million, or 21 cents a share, for the third quarter of 2012. That compares to a net loss of $65.4 million, or a loss of $2.30 a share, for the same period a year earlier.
The company’s revenue, meanwhile, grew to $160.7 million in 3Q, up from $151.9 million a year earlier.
The year brought a series of developments that strengthened the firm’s servicing business overall. Servicing revenue reached $96.9 million in 3Q. That revenue included $71.1 million in fees, $15.7 million in incentive and performance-based compensation, and $9.7 million in ancilliary fees.
And it seems mortgage-servicing rights seems to be where Walter Investment, like other firms, is putting its time and money.
This past month, Walter Investment paid $540 million to secure $50.4 billion worth of mortgage-servicing rights tied to Fannie Mae and $183 million in advances — both of which came out of the ResCap bankruptcy auction. That particular acquisition is still subject to court approvals.