Walter Investment Management Corp. (NYSE:WAC) Files An 8-K Entry into a Material Definitive AgreementItem 1.01.
On October10, 2017, Ditech Financial LLC (the “Company”), a wholly-owned, indirect subsidiary of Walter Investment Management Corp. (“WIMC”), entered into a Clean-up Call Agreement (the “Agreement”) with Capital One, National Association (“Capital One”). to the Agreement, the Company paid an inducement fee in the amount of $36.5 million to Capital One and Capital One agreed to assume the Company’s mandatory obligation to exercise the clean-up calls for eight separate asset-backed securitization transactions related to separate GreenPoint Credit Manufactured Housing Contract Trusts (the “GreenPoint Trusts”). Each of the GreenPoint Trust issued certificates (collectively, the “Certificates”) is backed by manufactured housing contracts and insured by MBIA Insurance Corporation. In addition, the Company’s existing obligation to reimburse Capital One for certain losses with respect to the GreenPoint Trusts and other trusts was terminated and replaced with a new obligation to reimburse Capital One for certain losses with respect to the GreenPoint Trusts to the extent that such losses exceed $17.0 million in the aggregate for the eight GreenPoint Trusts from July1, 2017 through each individual call date. In connection with the exercise of each clean-up call Capital One agreed to reimburse the Company for certain outstanding advances previously made by the Company with respect to the related GreenPoint Trusts, up to an aggregate amount of $6,375,000 for the eight GreenPoint Trusts.
Prior to its entry into the Agreement the Company was obligated to exercise the clean-up calls with respect to the GreenPoint Trusts when the principal amount of the applicable trust loan pool fell to 10% or less of the original principal amount of the manufactured housing contracts as of the date the Certificates were originally issued by the related GreenPoint Trust. At June30, 2017, WIMC estimated that the Company’s remaining clean-up call obligations with respect to the GreenPoint Trusts were $72.0 million, $253.3 million and $63.1 million during the years ending December31, 2017, 2018 and 2019, respectively. Following Capital One’s assumption, to the Agreement, of the Company’s obligations to exercise future GreenPoint Trust clean-up calls, the Company will no longer be obligated to exercise and fund such clean-up calls.
About Walter Investment Management Corp. (NYSE:WAC)
Walter Investment Management Corp. is a diversified mortgage banking firm focused primarily on the servicing and origination of residential loans, including reverse loans. The Company operates through three segments: Servicing, Originations and Reverse Mortgage. The Servicing segment consists of operations that perform servicing for third-party credit owners of mortgage loans, as well as its own mortgage loan portfolio. The Servicing segment also includes Insurance, and Loans and Residuals businesses. The Originations segment consists of operations that originate and purchase mortgage loans that are intended for sale to third parties. The Reverse Mortgage segment consists of operations which purchases and originates home equity conversion mortgage that are securitized, but remain on the consolidated balance sheet as collateral for secured borrowings.
