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The Week Ahead: What Does Q2 Hold For Walter Investment?

Money Two BHWith Walter Investment Management Corp.taking a loss during Q1 and both Ocwen Financial Corp. and Nationstar Mortgage Holdings reporting net losses for Q2, all eyes will fall on Walter to see what their Q2 earnings report holds. A significant rate decline in the first quarter negatively impacted earnings for Walter, and as a result, the company took a net loss of $172.7 million during the three-month period, according to the company’s Q1 2016 financial results released in May. The net loss represented a year-over-year decline of about $142 million in net income; in Q1 2015, Walter suffered a net loss of $31 million. Walter’s total serviced portfolio had $275.7 billion in unpaid principal balance (UPB) at the end of Q1 2016, an increase of 3 percent from the previous quarter, and the company was ranked nationally as a top 10 servicer, according to the announcement from Walter. The company’s total revenue in the first quarter declined by $244.1 million year-over-year down to $66.8 million, largely due to a $196.6 million decline in net servicing revenue and fees reflecting a $197.3 million change in fair value changes to mortgage servicing rights, according to Walter.

Likewise a similar disappointing outlook found both Ocwen and Nationstar during Q2. Financially, it has not been a good year for Ocwen. through the first six months. After reporting a net loss of $111 million for the first quarter of 2016, the nonbank servicer came back in the second quarter with a net loss of $87.2 million (71 cents per share), according to Ocwen’s Q2 earnings report released earlier this month. Following Ocwen’s reported net loss last week of $87 million for Q2, Nationstar Mortgage Holdings reported a net loss (for GAAP purposes) of $92 million for the three-month period ending June 30.

Walter's Q2 earnings report will be released Tuesday, August 9.

About Author: Kendall Baer

Kendall Baer is a Baylor University graduate with a degree in news editorial journalism and a minor in marketing. She is fluent in both English and Italian, and studied abroad in Florence, Italy. Apart from her work as a journalist, she has also managed professional associations such as Association of Corporate Counsel, Commercial Real Estate Women, American Immigration Lawyers Association, and Project Management Institute for Association Management Consultants in Houston, Texas. Born and raised in Texas, Baer now works as the online editor for DS News.
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