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Tampa's Walter Investment Management picks new CEO amid higher losses

 
Anthony Renzi
Anthony Renzi
Published Aug. 10, 2016

Shares of Walter Investment Management Corp. surged Tuesday as the struggling Tampa-based mortgage company tapped an executive with Citi as its new CEO.

Walter's stock closed up 19 percent — after jumping more than 35 percent during the day — even though the company said net losses for the quarter ended June 30 were up sixfold to $232.4 million, or $6.49 per share, compared to a net loss of $38.1 million, or $1.01 per share, a year earlier.

The results, which missed Wall Street expectations, included an after-tax goodwill charge of $133.6 million and noncash charges of $82.7 million. Revenue dropped 55 percent from the year-ago quarter to $187.5 million.

Anthony Renzi, who has had more than 30 years of experience in the mortgage industry including the past four years with Citigroup, is expected to join Walter as its new chief executive in the fourth quarter, the company said.

Board chairman George Awad had been acting as interim CEO since June after a nine-month stint at the helm of the company for Denmar Dixon. Dixon was unable to stop hemorrhaging losses at the company, which has also faced regulatory investigations and lawsuits tied to its mortgage banking activities.

Dixon was picked last October to replace Walter CEO Mark O'Brien, who retired.

Last year, Walter agreed to pay $29.63 million in fines to settle charges brought by the Department of Justice, accusing several of its subsidiaries of submitting false reverse mortgage claims to the Department of Housing and Urban Development.

Tuesday was a busy day for Walter, which also announced it had agreed to sell $35 billion in certain mortgage servicing rights to New Residential Investment for $231 million. It also entered into an agreement to sell New Residential substantially all of the assets of Walter Capital Opportunity and its subsidiaries for about $283 million.

Awad said the quarterly results "continue to fall short of expectations," but he also indicated efforts to become more efficient with a more engaged workforce are paying off. Actions taken this year to become more efficient and cut costs will result in about $75 million in annual savings, he said. The company has also shifted to a more fee-for-service business model and is continuing to seek ways to cut its debt.

Contact Jeff Harrington at jharrington@tampabay.com. Follow @JeffMHarrington.