Wednesday, February 3, 2016

End Times for the Whole Wallow-It's Official-RCS no Más!

"In another signal that the default mortgage business is shrinkingWalter Investment Management Corp. announced Friday that it acquired “certain assets” of Residential Credit Solutions,a Ft. Worth, Texas-based mortgage servicing company, specializes in servicing delinquent or default loans and so-called “credit-sensitive” residential mortgage loans, where the borrower is at high risk for default."
Residential Credit Solutions was a wholly owned subsidiary of American Capital Mortgage Investment Corp., which bought RCS in 2013 and regretted it 5 seconds later.
According to a release from Walter Investment, “certain assets” of RCS are now property of Walter Investment’s wholly owned subsidiary, Ditech Financial.

Yes, Pigboy, there is a sale clause. American Capital Mortgage didn't have to keep your "company" if it turned out you sucked at running a collection agency. How could you lose money when the FDIC gave you first crack at thousands of loans for cents on the dollar and bankrolled you on terms your victims couldn't dream of? 

Tim Geithner pretended to read magazines he'd already read while you plundered the working people of the midwest, northwest, west, northeast, east, south, and southwest. No legal body opposed you. Guess what? We, the suckers, your collective nemesis brought you down. We put up a fight you didn't expect, you fat scumbag. Many of us outlasted you and will never forget. Those of us who can sue you will do so. Here's hoping you lose every penny you stole and owe ten times that much.

You paid $5,000 for a $100,000 loan at 6.5%, and the homeowners were behind by $20,000? Easy, reduce their rate to 3.5% which is still above market, roll the $20,000 into the loan, and give them an extra ten years to pay. They'd save $170/month and you'd have your money back, plus a 20% gain, in 24 months. That's what HAMP 1 was. Your workers implemented it wrong and bamboozled thousands. You are not a badass now. You are an ass.

Ditech's not really looking for a shiny pink Elvis look-alike who can't run a cash-flow positive business that only has to do one thing one thing: hire people who can take mortgage payments over the phone.

...the transition of a number of core operational employees to the Ditech servicing organization
...entering into new residential mortgage loan sub-servicing agreements with RCS
...the transfer of certain existing residential mortgage loan subservicing agreements in the first quarter of 2016
...the subservicing agreements cover unpaid principal balance of approximately $9.8 billion at the date of closing. 

That's pretty close to RCS's entire portfolio.

...the company is laying off 134 employees by February 29. The gory details can be found here.

... Dallas Business Journal reported that RCS is closing its Ft. Worth facility and laying off 134 employees, out of about 200. 

Note that it has no other facilities.

...some parts of RCS will become part of ditech
Walter Investment’s then-CEO Mark O’Brien had this to say:

We believe the completion of our customer-focused originations and servicing integration under the Ditech brand will simplify many processes, improving the quality of our customers' experience as they do business with us, as well as drive operational efficiencies,” 

He might have said this, though:

Believe us. Originations drive experience as customer-focused, and integration business with our as well as under the many Ditech brand customers. They do.

Will we simplify servicing  processes, improving the quality of the completion of our operational efficiencies?

Hard to tell the difference. 

And BTW guess what? This what, from October 2015:
Coming just one month after Walter Investment Management Corp. (WAC) agreed to pay $29.63 million in fines to settle charges brought by the Department of Justice, the company announced Monday that Mark O’Brien, the company's chairman and chief executive officer, is retiring this week.
And now Ditech is growing again, with the addition of RCS. Is that wise?
...Green Tree’s legacy included a $63 million fine by the Consumer Financial Protection Bureau and the Federal Trade Commission for “mistreating borrowers” by 
failing to honor modifications for loans transferred from other servicers, demanding payments before providing loss mitigation options,
delaying decisions on short sales, and
harassing and threatening overdue borrowers.

...July 2015, the CFPB fined RCS $1.5 million for illegal mortgage servicing practices.

...Residential Credit Solutions failed to honor modifications for loans transferred from other servicers

...treated consumers as if they were in default when they weren’t

...sent consumers escrow statements falsely claiming they were due a refund, 

...forced consumers to waive their rights in order to get a repayment plan.

...engaged in illegal practices when servicing loans that it acquired from other servicers.

...the company, on a number of occasions, failed to honor trial loan modifications that consumers had entered into with their prior servicers.

...Residential Credit Solutions allegedly insisted that the consumer re-prove that he or she was qualified.

But now Walter Investment and RCS are moving forward together.
Seriously--towards what? Prison?

Denmar Dixon, Walter Investment's vice chairman, chief executive officer and president: 
“We believe this acquisition provides Ditech the opportunity to expand its servicing operations by adding qualified and experienced staff and approximately $9.8 billion of subservicing contracts that we expect will generate attractive margins."
Dude, you're in for some interesting phone calls. Most RCS clients have PTSD, STD, and scurvy. They are not easy to talk to.
So they bought the contracts, and got some core operational personnel in the bargain? Nice. Like this stale GMO cupcake with RCS-flavored jimmies.

Adios, pendejo.

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