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News Article | May 24, 2017
Site: www.marketwired.com

MCLEAN, VA--(Marketwired - May 24, 2017) - Freddie Mac ( : FMCC) announced today its second front-end credit risk transfer offering, Freddie Mac Deep MI CRT DI 2017-1. Through a forward credit insurance policy provided by a panel of mortgage insurance company affiliates, this structured transaction provides additional coverage beyond the primary mortgage insurance on 30-year fixed-rate mortgages with 80-97 percent LTVs -- which is placed immediately upon their sale to Freddie Mac. Transactions are executed via a competitive, transparent auction process. "We listened to market feedback from our successful pilot and made enhancements to our Deep MI CRT program -- most notably we extended the forward commitment on loans purchased across our diverse lender base and further improved the structure," said Gina Subramonian Healy, vice president of credit risk transfer. "This is an economically sensible way to make the program more attractive to insurers while improving pricing certainty." Freddie Mac has led the market in introducing new credit risk-sharing offerings with Structured Agency Credit Risk (STACR®), Agency Credit Insurance Structure (ACIS®) and Whole Loan Securities (WLS(SM)). The company has since grown its investor base to more than 230 unique investors, including insurers and reinsurers. Since 2013, the company has transferred a significant portion of credit risk on approximately $727 billion of UPB on single-family mortgages. Freddie Mac makes home possible for millions of families and individuals by providing mortgage capital to lenders. Since our creation by Congress in 1970, we've made housing more accessible and affordable for homebuyers and renters in communities nationwide. We are building a better housing finance system for homebuyers, renters, lenders and taxpayers. Learn more at FreddieMac.com, Twitter @FreddieMac and Freddie Mac's blog FreddieMac.com/blog.


News Article | May 9, 2017
Site: www.businesswire.com

MOUNT LAUREL, N.J.--(BUSINESS WIRE)--PHH Corporation (NYSE: PHH) (“PHH” or the “Company”) today announced financial results for the quarter ended March 31, 2017. For the quarter ended March 31, 2017, the Company reported Net loss attributable to PHH Corporation of $67 million or $1.26 per basic share. Net loss attributable to PHH Corporation for the quarter ended March 31, 2016 of $30 million or $0.56 per basic share. For the quarter ended March 31, 2017, core loss (after-tax)* and core loss per share* were $66 million and $1.24, respectively, which exclude a $2 million pre-tax unfavorable market-related MSR fair value adjustment, net of derivative related to MSRs. Glen A. Messina, president and CEO of PHH Corporation, said, "In 2017, we are focused on maximizing the amount of excess cash and the opportunity for near-term cash distributions to shareholders. Consistent with this objective, the Board has authorized a $100 million share repurchase program, which is not subject to the completion of our asset sale transactions, as the initial action in our capital return plan. Based on the progress we made on our operational priorities of closing our announced asset sales, minimizing cash usage in the business, obtaining greater clarity into the exact timing of our PLS client exits, and resolving our remaining legacy regulatory matters, we have increased our estimate of potential excess cash(1) by $105 million to $655 million." Messina also commented, "Management and the Board intend to be diligent in the assessment of our ongoing progress and PHH 2.0’s opportunities and challenges in the context of our rapidly changing industry environment. We will adjust our actions accordingly to maximize value for our shareholders." Notable items, Exit costs and net MSR fair value adjustments included the following: Core earnings or loss (pre-tax), core earnings or loss (after-tax) and core earnings or loss per share are financial measures that are not in accordance with U.S. generally accepted accounting principles (GAAP). See the “Note Regarding Non-GAAP Financial Measures” below for a detailed description and reconciliation of such Non-GAAP financial measures to their most directly comparable GAAP financial measures, as required by Regulation G. Mortgage Production segment loss in the first quarter of 2017 was $41 million, compared to a segment loss of $62 million in the fourth quarter of 2016 and a segment loss of $26 million in the first quarter of 2016. The $21 million favorable change in segment results for the first quarter of 2017 compared to the fourth quarter of 2016 was due to a $26 million decrease in Total expenses and a $4 million favorable change in Net loss attributable to noncontrolling interest, which was partially offset by a $9 million decrease in Net revenues. The decline in Net revenues was due primarily to a $21 million decrease in Origination and other loan fees caused by a 33% decrease in total retail closing units, an $8 million decrease in Gain on loans held for sale, net that was driven by a 49 basis point decrease in average total loan margins, that was partially offset by a $21 million favorable change in Other income (loss) resulting from the $23 million impairment recorded in the fourth quarter of 2016 on our equity investment in Speedy Title and Appraisal Review Services LLC ("STARS"). The $26 million decrease in Total expenses was primarily driven from a $20 million decrease in Exit and disposal costs as well as a $4 million decrease in Commissions and a $3 million decrease in Loan origination expenses from a decline in closings. Exit and disposal costs in the first quarter of 2017 included $7 million related to the PLS exit and $6 million for shared service employees as a result of the reorganization, while the fourth quarter of 2016 included $33 million related to the PLS exit including a non-cash asset impairment charge. The $15 million unfavorable change in segment results in the first quarter of 2017 compared to the first quarter of 2016 was primarily due to a $26 million decrease in Net revenue, that was partially offset by a $7 million decrease in Total expenses and a $4 million favorable change from Net loss attributable to noncontrolling interest. The decrease in Net revenue was primarily driven by lower application and closing volumes. Total PLS closing units in the first quarter of 2017 declined by 29% when compared to the first quarter of 2016, primarily due to the decline in PLS volume as we execute the exit of this channel. The decline in Total expenses was driven by a $9 million reduction from the Corporate overhead allocation resulting from reduced professional fees for information technology shared services, a $7 million decrease in Loan origination expenses from a 37% decrease in retail application units, and a $4 million decrease in Salaries and related expenses from declines in overall average headcount and reduced contract labor and overtime. This was offset by a $13 million increase in Exit and disposal costs as a result of the first quarter of 2017 PLS and reorganization exit charges. Total first quarter of 2017 mortgage closings were $5.9 billion, down 34% from the fourth quarter of 2016 and 26% from the first quarter of 2016. The decrease in total closings compared to the fourth quarter of 2016 was due to the decline in PLS volume, as we execute the exit of this channel, as well as seasonal declines in purchase volume in our real estate channel. The decrease in total closings compared to the first quarter of 2016 was primarily driven by the decline in PLS volume. Saleable applications of $2.5 billion in the first quarter of 2017 decreased 6% from the fourth quarter of 2016 and 23% from the first quarter of 2016, primarily due to our exit from the wholesale/correspondent lending channel in the second quarter of 2016. Total loan margin on IRLCs expected to close for the first quarter of 2017 was 356 bps, a 49 bps decrease from the fourth quarter of 2016 and a 61 bps increase from the first quarter of 2016, which is consistent with the decline in interest rates experienced during June through November 2016 and increase in interest rates since the fourth quarter of 2016. As previously announced in November 2016, we are executing on a plan to exit our PLS business. In March 2017, we closed our transaction with LenderLive to transfer to them certain operating assets, personnel and responsibilities and outsource certain PLS mortgage origination fulfillment functions. We believe this will help mitigate certain operating risks associated with the wind down of the PLS business. We believe we will be in a position to substantially exit the PLS business by the first quarter of 2018, subject to certain transition support requirements. In addition to the exit costs outlined above, in the first quarter of 2017, we incurred $25 million of pre-tax operating losses for the PLS business. While we implement the exit from this channel, we expect to incur further pre-tax operating losses of $95 million for the PLS business, including maintaining the support and compliance infrastructure needed to comply with both regulatory and contractual requirements. We also estimate that we will incur $56 million of additional exit costs (pre-tax) over the next 12 months. Mortgage Servicing segment loss in the first quarter of 2017 was $34 million, compared to a segment loss of $117 million in the fourth quarter of 2016 and a segment loss of $21 million in the first quarter of 2016. The $83 million favorable improvement in segment results for the first quarter of 2017 compared to the fourth quarter of 2016 was due to a $51 million favorable change in Net revenues and a $32 million decrease in Total expenses. The favorable change in Net revenues was primarily due to $66 million of favorable adjustments to Change in fair value of MSRs, net of related derivatives compared to the fourth quarter of 2016 that was partially offset by a $20 million decline in Loan servicing income. Within Change in fair value of MSRs, net of related derivatives, we had minimal change in the first quarter of 2017 to our market-related fair value adjustments and to our MSR-related derivatives due to the termination of substantially all MSR-related derivatives in the fourth quarter of 2016. In the fourth quarter of 2016, our market-related fair value adjustments were driven primarily by negative model adjustments to reflect increased servicing costs and foreclosure losses and by a calibration of our valuation model considering the pricing with the MSR agreements executed in the fourth quarter of 2016. The decline in Loan servicing income was primarily due to a 10% decline in the average capitalized portfolio from the sale of a portion of our MSRs to Lakeview Loan Servicing, LLC ("Lakeview") and a decrease in the average number of loans in our subservicing portfolio, as well as $7 million in transaction costs and related expenses on the sale of the MSRs to Lakeview. The decrease in Total expenses compared to the fourth quarter of 2016 was primarily driven from $13 million in lower provisions for Legal and regulatory reserves, $10 million of lower Repurchase and foreclosure-related charges driven by higher fourth quarter of 2016 expenses that will not be reimbursed pursuant to mortgage insurance programs, and $6 million of lower Other expenses related to additional compensatory fee reserves recorded in the fourth quarter of 2016. The $13 million unfavorable change in segment results in the first quarter of 2017 compared to the first quarter of 2016 represents a $17 million decrease in Net revenues, partially offset by a $4 million decrease in Total expenses. Net revenues decreased compared to the prior year quarter driven by a $29 million decline in Loan servicing income due to a 20% decrease in the average capitalized portfolio from the sale of a portion of our MSRs to Lakeview and a decrease in the average number of loans in our subservicing portfolio, as well as a $7 million in transaction costs and related expenses on the sale of the MSRs to Lakeview. The decline in Net revenue was partially offset by a favorable adjustment to Change in fair value of MSRs, net of related derivatives of $7 million. The decrease in Total expenses compared to the first quarter of 2016 was due to lower Corporate overhead allocation of $5 million and lower Professional and third-party service fees and Occupancy and other office expenses that was partially offset by higher provisions for legal and regulatory matters of $4 million. At March 31, 2017, the book value of our MSRs was $596 million, representing an 83 bps capitalized servicing rate, and included the calibration of our modeled value using the pricing associated with the MSR sale commitments. The MSR book value and capitalized servicing rate at December 31, 2016 was $690 million and 82 bps of the capitalized loan servicing portfolio. The MSR book value at March 31, 2016 was $770 million, representing an 80 bps capitalized servicing rate. For the first quarter of 2017, $11 million of MSR book value was added from loans sold. The initial sale of our GNMA MSRs under the Lakeview sale agreement was completed, representing a decrease of $74 million of MSR fair value. Prepayments and the receipt of recurring cash flows further decreased the value of our MSR by $27 million, as well as a $2 million decrease from market-related fair value adjustments. At March 31, 2017, the unpaid principal balance (“UPB”) of our capitalized servicing portfolio was $71.8 billion, down 15% from December 31, 2016, and 25% from March 31, 2016. This decline in our capitalized loan servicing portfolio was due to our February 2017 sale of $10.2 billion in GNMA servicing to Lakeview, the persistent low interest rate environment throughout 2016 leading to high prepayment activity and our execution of sales of MSRs under flow sale agreements. The following table summarizes the Company's MSRs committed under sale agreements, based on the portfolio as of March 31, 2017: In addition, the Company has commitments to transfer approximately $285 million of Servicing advances to the counterparties of these agreements (based on the March 31, 2017 portfolio). On February 2, 2017, we completed the initial sale of GNMA MSRs to Lakeview, representing $10.2 billion unpaid principal balance, $74 million of MSR fair value, and $11 million of Servicing advances with total expected proceeds of $85 million from the initial transfer. On May 2, 2017, an additional sale of GNMA MSRs was completed, representing $1 billion of unpaid principal balance, $7 million of MSR fair value, and $1 million of Servicing advances. We expect to receive additional total proceeds of $8 million from this transfer. The final proceeds received from the MSR sales is dependent on the closing of the remaining MSR sales, as well as portfolio composition and servicing advances outstanding at each transfer date, the amount of investor and origination source consents received, and transaction costs. At March 31, 2017, our subservicing portfolio consisted of approximately 268,000 units, up 1% from December 31, 2016 and down 45% from March 31, 2016. Our total subservicing units declined by approximately 211,000 units during the fourth quarter of 2016 driven by the insourcing of Merrill Lynch Home Loans' portfolio and HSBC Bank USA's sale of a population of mortgage servicing rights related to loans that we subserviced. Net loss before income taxes for the first quarter of 2017 was $26 million, primarily due to Strategic review expenses of $15 million and Exit and disposal costs of $10 million that were primarily related to the reorganization of our operations that were not allocated back to our reportable segments. This was compared to a loss of $27 million in the fourth quarter of 2016 and a loss of $2 million in the first quarter of 2016. As discussed above, as an outcome of our strategic review process, we plan to operate as a smaller business that is focused on subservicing and portfolio retention services. We intend to re-engineer and reduce operating and overhead costs, which may take up to 12 to 18 months to complete. For the first quarter of 2017, we have incurred a total of $17 million in Exit and disposal costs (pre-tax), which primarily were severance-related costs related to our executive transitions and shared service employees. We estimate that we will incur approximately $33 million (pre-tax) of additional exit costs in 2017. We are targeting total annual shared service expenses of $75 million in PHH 2.0’s first full year as a stand-alone business. The Company will host a conference call at 10:00 a.m. (Eastern Time) on Wednesday, May 10, 2017, to discuss its first quarter 2017 results. All interested parties are welcome to participate. An investor presentation with an appendix of supplemental schedules will accompany the conference call and be available by visiting the Investor Relations page of PHH's website at www.phh.com on Wednesday, May 10, 2017, prior to the start of the conference call. You can access the conference call by dialing (800) 344-6698 or (785) 830-7979 and using the conference ID 1992771 approximately 10 minutes prior to the call. The conference call will also be webcast, which can be accessed from the Investor Relations page of PHH's website at www.phh.com under webcasts and presentations. A replay will be available beginning shortly after the end of the call through May 25, 2017, by dialing (888) 203-1112 or (866) 375-1919 and using conference ID 1992771, or by visiting the Investor Relations page of PHH's website at www.phh.com. Headquartered in Mount Laurel, New Jersey, PHH Corporation is a leading provider of end-to-end mortgage solutions through its subsidiary, PHH Mortgage. Its outsourcing model and proven expertise, combined with a strong commitment to operational excellence and customer service, has enabled PHH Mortgage to become one of the largest non-bank originators and servicers of residential mortgages in the United States. PHH Mortgage provides mortgage solutions for the real estate market and financial institutions, and offers home financing directly to consumers. For additional information, please visit www.phh.com/invest. Certain statements in this press release are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Generally, forward looking-statements are not based on historical facts but instead represent only our current beliefs regarding future events. All forward-looking statements are, by their nature, subject to risks, uncertainties and other factors that could cause actual results, performance or achievements to differ materially from those expressed or implied in such forward-looking statements. Investors are cautioned not to place undue reliance on these forward-looking statements. Such statements may be identified by words such as “expects,” “anticipates,” “intends,” “projects,” “estimates,” “plans,” “may increase,” “may fluctuate” and similar expressions or future or conditional verbs such as “will,” “should,” “would,” “may” and “could.” You should understand that forward-looking statements are not guarantees of performance or results and are preliminary in nature. You should consider the areas of risk described under the heading “Cautionary Note Regarding Forward-Looking Statements” and “Risk Factors” in our periodic reports filed with the U.S. Securities and Exchange Commission, including our most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q, in connection with any forward-looking statements that may be made by us or our businesses generally. Such periodic reports are available in the “Investors” section of our website at http://www.phh.com and are also available at http://www.sec.gov. Except for our ongoing obligations to disclose material information under the federal securities laws, applicable stock exchange listing standards and unless otherwise required by law, we undertake no obligation to release publicly any updates or revisions to any forward-looking statements or to report the occurrence or non-occurrence of anticipated or unanticipated events. Core earnings or loss (pre-tax and after-tax) and core earnings or loss per share are financial measures that are not in accordance with GAAP. See Non-GAAP Reconciliations below for a reconciliation of these measures to the most directly comparable GAAP financial measures as required by Regulation G. These Non-GAAP measures are used in managing certain aspects of the Company’s business. For example, management’s reviews of results incorporate Non-GAAP measures and certain of the Company’s debt agreements contain covenants calculated using a measure similar to the calculations of the Non-GAAP measures. The Company has also designed certain management incentives based upon the achievement of targets related to Non-GAAP measures. The Company believes that these Non-GAAP Financial Measures can be useful to investors because they provide a means by which investors can evaluate the Company’s underlying key drivers and operating performance of the business, exclusive of certain adjustments and activities that investors may consider to be unrelated to the underlying economic performance of the business for a given period. The Company also believes that any meaningful analysis of the Company’s financial performance by investors requires an understanding of the factors that drive the Company’s underlying operating performance which can be obscured by significant unrealized changes in value of the Company’s mortgage servicing rights, as well as any gain or loss on derivatives that are intended to offset market-related fair value adjustments on the Company’s mortgage servicing rights. The Company believes these Non-GAAP measures provide useful information to investors that is supplementary to our results in accordance with GAAP; however, there are inherent limitations to these measures and they should not be viewed as a substitute for our results in accordance with GAAP as measurements of the Company's financial performance. Core earnings or loss (pre-tax and after-tax) and core earnings or loss per share Core earnings or loss (after-tax) and core earnings or loss per share involves differences from Net income or loss attributable to PHH Corporation and Basic earnings or loss per share attributable to PHH Corporation computed in accordance with GAAP. Core earnings or loss (pre-tax and after-tax) and core earnings or loss per share measure the Company’s financial performance excluding unrealized changes in fair value of the Company’s mortgage servicing rights that are based upon projections of expected future cash flows and prepayments as well as realized and unrealized changes in the fair value of derivatives that are intended to offset changes in the fair value of mortgage servicing rights. The changes in fair value of mortgage servicing rights and related derivatives are highly sensitive to changes in interest rates and are dependent upon the level of current and projected interest rates at the end of each reporting period. See “Note Regarding Non-GAAP Financial Measures” above in this press release for a description of the uses and limitations of the Non-GAAP Financial Measures.


The Company recently changed its principal executive offices from Tampa, Florida to Fort Washington, Pennsylvania, which change was due to, among other things, the Chief Executive Officer and President and certain other senior executive officers of the Parent Company being based in Fort Washington. First Quarter 2017 Financial and Operating Overview Total revenue for the first quarter of 2017 was $245.3 million, an increase of $178.5 million as compared to the prior year quarter, primarily due to an increase of $218.9 million in net servicing revenue and fees partially offset by a $20.5 million decrease in fair value gains on reverse loans and related HMBS obligations. The increase in net servicing revenue and fees primarily resulted from a $273.1 million improvement in fair value losses on mortgage servicing rights driven by changes in valuation inputs or other assumptions. Offsetting this increase was a $44.4 million decline in servicing fees primarily due to the planned shift of the third-party servicing portfolio from servicing to subservicing combined with runoff of the portfolio. Total expenses for the first quarter of 2017 were $313.7 million, a decrease of $29.7 million as compared to the prior year quarter, driven primarily by headcount related expenses, including $12.9 million decrease in compensation and benefits resulting primarily from a lower average headcount driven by site closures and various organizational changes, as well as the decision to exit the reverse mortgage originations business, $4.6 million decrease in bonus accruals, $3.5 million decrease related to a change in the commissions structure, and $3.4 million reduction in overtime driven by cost reduction measures. In addition, pre-tax income for the quarter ended March 31, 2017, included a $67.7 million gain on the sale of the principal insurance agency and substantially all of the insurance agency business, which was completed on February 1, 2017. Results for the Company's segments are presented below. Ditech serviced 1.9 million accounts, with a UPB of $220.2 billion as of March 31, 2017. During the quarter ended March 31, 2017, the Company experienced a net disappearance rate of 13.56%, an increase of 0.58% as compared to the prior year quarter. The Servicing segment reported $33.2 million of pre-tax income for the first quarter of 2017 as compared to a pre-tax loss of $256.3 million in the prior year quarter. During the first quarter of 2017, the segment generated revenue of $147.8 million, a $211.0 million increase as compared to the prior year quarter, primarily due to an increase of $218.1 million in net servicing revenue and fees. The increase in net servicing revenue and fees primarily resulted from a $273.1 million improvement in fair value losses on mortgage servicing rights driven by changes in valuation inputs or other assumptions. Partially offsetting this increase was a $44.5 million decline in servicing fees primarily due to the planned shift of the third-party servicing portfolio from servicing to subservicing combined with runoff of the portfolio. Total expenses in the Servicing segment for the first quarter of 2017 were $180.9 million, a decrease of $12.2 million as compared to the prior year quarter. This decrease was driven by $11.4 million of lower compensation and benefits resulting primarily from a lower average headcount driven by site closures and organizational changes, $5.4 million in lower compensating interest due to a shift from servicing to subservicing, $3.5 million decrease related to a change in the commissions structure, $2.4 million in lower postage and printing costs driven by fewer mailings made during the first quarter of 2017, $1.7 million in lower contractor costs related to the servicing platform conversion that occurred in the second quarter of 2016 and $1.2 million reduction in overtime driven by cost reduction measures. These decreases were partially offset by $8.3 million in higher charges associated with foreclosure and bankruptcy practices, $4.3 million in additional costs associated with the use of MSP and outsourcing initiatives, $3.0 million in higher legal expenses, $2.1 million in professional fees related to the sale of substantially all of the insurance agency business in the first quarter of 2017, and $1.3 million in higher advance loss provision. Current quarter expenses included $13.5 million of interest expense and $8.9 million of depreciation and amortization. The Servicing segment reported an Adjusted Loss of $19.6 million and AEBITDA of $30.7 million for the first quarter of 2017, a decline of $8.7 million and $43.9 million, respectively, as compared to the prior year quarter. The declines in these metrics were due to lower adjusted revenues, partially offset by decreased expenses, as described above. Ditech generated total pull-through adjusted locked volume of $4.9 billion for the first quarter of 2017, an increase of $0.3 billion as compared to the prior year quarter, driven by increases in the correspondent and wholesale lending channels. Funded loans in the current quarter totaled $5.0 billion, which was consistent with the prior year quarter. The combined direct margin for the current quarter was 51 bps, consisting of a weighted average of 148 bps direct margin in the consumer lending channel and 32 bps direct margin in the correspondent channel. The decrease in combined direct margin of 29 bps from the prior year quarter was primarily due to lower gain on sale of loans and fee income margins, partially offset by lower direct expense margins. Gain on sale margins decreased due to the shift in mix to the lower margin correspondent and wholesale channels, combined with lower margins in the consumer channel due to a lower portion of HARP volume. Fee income margins declined during the three months ended March 31, 2017 primarily in the consumer channel as loans continued to fund during the quarter under a program in place through December 31, 2016 in which certain fees were waived. Direct expense margins declined primarily due to lower intersegment expense as a result of lower portion of retention volume subject to the lead fee and lower servicing rights values. The Originations business delivered a recapture rate of 26% for the current quarter. The Originations segment reported $10.8 million of pre-tax income for the first quarter of 2017, a decrease of $5.6 million from the prior year quarter. During the first quarter of 2017, this segment generated revenue of $80.8 million, a decrease of $19.5 million from the prior year quarter. Net gains on sales of loans decreased $14.3 million as compared to the prior year quarter, primarily due to lower gain on sale margins in the consumer channel combined with a shift in mix from the higher margin consumer channel to the lower margin correspondent and wholesale channels, which was partially offset by an increase in total locked volume during the quarter. Total expenses for the Originations segment for the first quarter of 2017 were $70.0 million, a decrease of $13.9 million compared to the prior year quarter, driven by a $7.1 million decrease in intersegment retention expense, a $4.1 million decrease in general and administrative expenses primarily due to lower advertising costs and a $2.4 million decrease in salaries and benefits expenses. Current quarter expenses included $9.4 million of interest expense and $1.0 million of depreciation and amortization. The Originations segment reported Adjusted Earnings of $12.2 million and AEBITDA of $12.4 million for the first quarter of 2017, a decrease of $5.5 million and $11.4 million, respectively, as compared to the prior year quarter, due primarily to lower revenues offset by a decrease in expenses, as described above. The Reverse Mortgage segment serviced 116,452 accounts, with a UPB of $20.5 billion at March 31, 2017. During the current quarter, the business securitized $140.8 million of HECM loans. The Reverse Mortgage segment reported $5.3 million of pre-tax loss for the first quarter of 2017 as compared to pre-tax income of $5.0 million in the prior year quarter. During the first quarter of 2017, this segment generated revenue of $22.5 million, a decline of $21.6 million from the prior year quarter, primarily driven by a decrease of $21.0 million in net non-cash fair value adjustments due primarily to higher LIBOR rates in 2017 as compared to 2016. Cash generated by the origination, purchase and securitization of HECMs decreased $3.0 million during the three months ended March 31, 2017 as compared to the same period of 2016 primarily as a result of overall lower origination volumes due to the exit from the reverse mortgage originations business, partially offset by a shift in mix from lower margin new originations to higher margin tails. The decrease in cash generated was offset by a $3.5 million increase in net interest margin. Current quarter revenues also included $7.5 million in net servicing revenue and fees and $0.3 million of other revenues. Total expenses for the Reverse Mortgage segment for the first quarter of 2017 were $27.8 million, a decrease of $10.3 million from the prior year quarter primarily due to $6.3 million decrease in general and administrative expenses driven by $1.9 million decrease in curtailment-related accruals, $1.6 million decrease in loss accruals, $1.1 million lower advertising costs, $0.5 million decrease in contractor fees and $4.9 million decrease in salaries and benefits and loan origination expenses due to the exit from the reverse mortgage originations business. Current quarter expenses included $2.4 million of interest expense and $1.1 million of depreciation and amortization. The Reverse Mortgage segment reported an Adjusted Loss of $0.9 million and AEBITDA of $0.5 million for the first quarter of 2017, an improvement of $10.4 million and $10.1 million, respectively, as compared to the prior year quarter, primarily due to the decrease in general and administrative expenses and in salaries and benefits, as described above. The Other Non-Reportable segment reported $34.3 million of pre-tax loss for the first quarter of 2017, an improvement of $9.7 million as compared to the prior year quarter. Other net fair value gains were $6.5 million for the three months ended March 31, 2017 as compared to other net fair value losses of $2.2 million the same period of 2016 primarily related to increases in the forward LIBOR rate impacting the value of the assets and liabilities of the Non-Residual Trusts. The Other non-reportable segment had an Adjusted Loss of $32.6 million and AEBITDA of ($0.3) million for the first quarter of 2017 as compared to an Adjusted Loss of $34.9 million and AEBITDA of ($1.7) million in the first quarter of 2016. In the fourth quarter of 2016, the Company announced it had engaged Weil, Gotshal & Manges LLP and Houlihan Lokey to assist in reviewing a number of potential actions that may be taken to reduce the Company's leverage. These efforts have continued in 2017. Walter Investment Management Corp. is an independent servicer and originator of mortgage loans and servicer of reverse mortgage loans. Based in Fort Washington, Pennsylvania, the Company has approximately 4,500 employees and services a diverse loan portfolio. For more information about Walter Investment Management Corp., please visit the Company's website at www.walterinvestment.com. The information on the Company's website is not a part of this release. This press release and the accompanying reconciliations include non-GAAP financial measures. For a description of these non-GAAP financial measures, including the reasons management uses each measure, and reconciliations of these non-GAAP financial measures to the most directly comparable financial measures prepared in accordance with GAAP, please see the reconciliations as well as "Non-GAAP Financial Measures" at the end of this press release. The terms "Walter Investment", "Walter", the "Company", "we", "us", and "our" as used throughout this release refer to Walter Investment Management Corp. and its consolidated subsidiaries. We use certain acronyms and terms throughout this release that are defined in the Glossary of Terms in Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the year ended December 31, 2016, and in our Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2017, and in our other filings with the SEC. Certain statements in this press release constitute "forward-looking statements" within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. Statements that are not historical fact are forward-looking statements. Certain of these forward-looking statements can be identified by the use of words such as "believes," "anticipates," "expects," "intends," "plans," "projects," "estimates," "assumes," "may," "should," "will," "seeks," "targets," or other similar expressions. Such forward-looking statements involve known and unknown risks, uncertainties and other important factors, and our actual results, performance or achievements could differ materially from future results, performance or achievements expressed in these forward-looking statements. These forward-looking statements are based on our current beliefs, intentions and expectations. These statements are not guarantees or indicative of future performance, nor should any conclusions be drawn or assumptions be made as to any potential outcome of any strategic review we conduct. Important assumptions and other important factors that could cause actual results to differ materially from those forward-looking statements include, but are not limited to, those factors, risks and uncertainties described below and in more detail under the caption "Risk Factors" of our Annual Report on Form 10-K for the year ended December 31, 2016, our Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2017, and in our other filings with the SEC. In particular (but not by way of limitation), the following important factors, risks and uncertainties could affect our future results, performance and achievements and could cause actual results, performance and achievements to differ materially from those expressed in the forward-looking statements: All of the above factors, risks and uncertainties are difficult to predict, contain uncertainties that may materially affect actual results and may be beyond our control. New factors, risks and uncertainties emerge from time to time, and it is not possible for our management to predict all such factors, risks and uncertainties. Although we believe that the assumptions underlying the forward-looking statements (including those relating to our outlook) contained herein are reasonable, any of the assumptions could be inaccurate, and therefore any of these statements included herein may prove to be inaccurate. In light of the significant uncertainties inherent in the forward-looking statements included herein, the inclusion of such information should not be regarded as a representation by us or any other person that the results or conditions described in such statements or our objectives and plans will be achieved. We make no commitment to revise or update any forward-looking statements in order to reflect events or circumstances after the date any such statement is made, except as otherwise required under the federal securities laws. If we were in any particular instance to update or correct a forward-looking statement, investors and others should not conclude that we would make additional updates or corrections thereafter except as otherwise required under the federal securities laws. In addition, this release may contain statements of opinion or belief concerning market conditions and similar matters. In certain instances, those opinions and beliefs could be based upon general observations by members of our management, anecdotal evidence and/or our experience in the conduct of our business, without specific investigation or statistical analyses. Therefore, while such statements reflect our view of the industries and markets in which we are involved, they should not be viewed as reflecting verifiable views and such views may not be shared by all who are involved in those industries or markets. The Company is managed through three reportable segments: Servicing, Originations and Reverse Mortgage. We evaluate the performance of our business segments through the following measures: income (loss) before income taxes, Adjusted Earnings (Loss), and Adjusted EBITDA. Management considers Adjusted Earnings (Loss) and Adjusted EBITDA, both non-GAAP financial measures, to be important in the evaluation of our business segments and of the Company as a whole, as well as for allocating capital resources to our segments. Adjusted Earnings (Loss) and Adjusted EBITDA are supplemental metrics utilized by management to assess the underlying key drivers and operational performance of the continuing operations of the business. In addition, analysts, investors, and creditors may use these measures when analyzing our operating performance. Adjusted Earnings (Loss) and Adjusted EBITDA are not presentations made in accordance with GAAP and our use of these measures and terms may vary from other companies in our industry. Adjusted Earnings (Loss) is defined as income (loss) before income taxes, plus changes in fair value due to changes in valuation inputs and other assumptions; goodwill and intangible assets impairment, if any; a portion of the provision for curtailment expense, net of expected third-party recoveries, if applicable; share-based compensation expense or benefit; non-cash interest expense; exit costs; estimated settlements and costs for certain legal and regulatory matters; fair value to cash adjustments for reverse loans; and select other cash and non-cash adjustments, primarily including severance; gain or loss on extinguishment of debt; the net impact of the Non-Residual Trusts; transaction and integration costs; and certain non-recurring costs, as applicable. Adjusted Earnings (Loss) excludes unrealized changes in fair value of MSR that are based on projections of expected future cash flows and prepayments. Adjusted Earnings (Loss) includes both cash and non-cash gains from mortgage loan origination activities. Non-cash gains are net of non-cash charges or reserves provided. Adjusted Earnings (Loss) includes cash generated from reverse mortgage origination activities for the period in which we were originating reverse mortgages. Adjusted Earnings (Loss) may from time to time also include other adjustments, as applicable based upon facts and circumstances, consistent with the intent of providing investors with a supplemental means of evaluating our operating performance. We revised our method of calculating Adjusted Earnings (Loss) beginning with the Annual Report on Form 10-K for the fiscal year ended December 31, 2016 to eliminate adjustments for the step-up depreciation and amortization, which represents depreciation and amortization costs related to the increased basis in assets (including servicing rights and subservicing contracts) acquired within business combination transactions. Prior period amounts have been adjusted to reflect this revision. Adjusted EBITDA eliminates the effects of financing, income taxes and depreciation and amortization. Adjusted EBITDA is defined as income (loss) before income taxes, plus amortization of servicing rights and other fair value adjustments; interest expense on corporate debt; depreciation and amortization; goodwill and intangible assets impairment, if any; a portion of the provision for curtailment expense, net of expected third-party recoveries, if applicable; share-based compensation expense or benefit; exit costs; estimated settlements and costs for certain legal and regulatory matters; fair value to cash adjustments for reverse loans; select other cash and non-cash adjustments, primarily the net provision for the repurchase of loans sold; non-cash interest income; severance; gain or loss on extinguishment of debt; interest income on unrestricted cash and cash equivalents; the net impact of the Non-Residual Trusts; the provision for loan losses; Residual Trust cash flows; transaction and integration costs; servicing fee economics; and certain non-recurring costs, as applicable. Adjusted EBITDA includes both cash and non-cash gains from mortgage loan origination activities. Adjusted EBITDA excludes the impact of fair value option accounting on certain assets and liabilities and includes cash generated from reverse mortgage origination activities for the period in which the Company was originating reverse mortgages. Adjusted EBITDA may also include other adjustments, as applicable based upon facts and circumstances, consistent with the intent of providing investors a supplemental means of evaluating our operating performance. Adjusted Earnings (Loss) and Adjusted EBITDA should not be considered as alternatives to (i) net income (loss) or any other performance measures determined in accordance with GAAP or (ii) operating cash flows determined in accordance with GAAP. Adjusted Earnings (Loss) and Adjusted EBITDA have important limitations as analytical tools, and should not be considered in isolation or as substitutes for analysis of our results as reported under GAAP. Some of the limitations of these metrics are: Because of these limitations, Adjusted Earnings (Loss) and Adjusted EBITDA should not be considered as measures of discretionary cash available to us to invest in the growth of our business. We compensate for these limitations by relying primarily on our GAAP results and using Adjusted Earnings (Loss) and Adjusted EBITDA only as supplements. Users of our financial statements are cautioned not to place undue reliance on Adjusted Earnings (Loss) and Adjusted EBITDA. To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/walter-investment-management-corp-announces-first-quarter-2017-highlights-and-financial-results-300455069.html


News Article | May 9, 2017
Site: globenewswire.com

IRVINE, Calif., May 09, 2017 (GLOBE NEWSWIRE) -- Impac Mortgage Holdings, Inc. (NYSE MKT:IMH) announces the financial results for the quarter ended March 31, 2017. For the first quarter of 2017, the Company reported GAAP net earnings of $4.6 million, or $0.29 per diluted common share, and Adjusted Operating Income (as defined below) of $2.2 million, or $0.12 per diluted common share, as compared to GAAP net earnings of $981 thousand, or $0.08 per diluted common share, and Adjusted Operating Income of $7.0 million, or $0.60 per diluted common share for the first quarter of 2016. Operating income, excluding the changes in contingent consideration (“Adjusted Operating Income”), is considered a non-GAAP financial measurement; see the discussion and reconciliation on non-GAAP financial measures below. Net earnings include certain fair value adjustments, which are non-cash items and are not related to current operating results.  Although we are required by GAAP to record these fair value adjustments, management believes Adjusted Operating Income as defined above is more useful to discuss the ongoing and future operations of the Company, shown in the table below: Adjusted Operating Income decreased to $2.2 million, or $0.12 per diluted common share, for the first quarter of 2017 as compared to $7.0 million, or $0.60 per diluted common share, in in the first quarter of 2016.  The decrease in operating income was primarily due to a decrease in gain on sale of loans of $16.6 million resulting from a 33% decrease in total originations volume (as discussed below).  With the higher interest rate environment subsequent to the U.S. Presidential election in mid-November, the previously anticipated drop in refinance volume was the primary reason for the decline in operating income in the first quarter of 2017. However, as a result of a higher volume of NonQM and government loans, gain on sale margins increased by 7 basis points (“bps”) to 236 bps in the first quarter of 2017, as compared to 229 basis points in the first quarter of 2016.  In the first quarter of 2017, NonQM and government originations represented approximately 39% of total originations, as compared to just 20% of total originations in the first quarter of 2016. As a result of the retention of servicing starting in 2016, the unpaid principal balance (“UPB”) of the Company’s mortgage servicing portfolio increased 157% to $13.2 billion as of March 31, 2017 from March 31, 2016.  The servicing portfolio generated net servicing income of $7.3 million in the first quarter of 2017, a 251% increase over the net servicing income of $2.1 million in the first quarter of 2016.  Additionally, delinquencies within the servicing portfolio remain low at 0.27% for 60+ delinquencies as of March 31, 2017. The loss on mortgage servicing rights in the first quarter was primarily due to mark-to-market (“MTM”) changes from amortization of mortgage servicing rights (“MSR”) in the first quarter. During the first quarter of 2017, total originations decreased 33% to $1.6 billion as compared to $2.3 billion in the first quarter of 2016.  This decrease was caused by the previously anticipated drop in refinance volume as a result of rising interest rates at the end of last year and into the first quarter of 2017. During the first quarter of 2017, the origination volume of NonQM loans increased to $184.3 million, as compared to just $289.6 million of NonQM production for all of 2016, and $86.3 million in the fourth quarter of 2016.  There was an increase in NonQM origination volume across all channels in the first quarter of 2017 with 40% of the volume from the retail channel and 60% from the wholesale and correspondent channels.  In the fourth quarter of 2016, retail originations only accounted for 12% of NonQM production, while wholesale and correspondent originations accounted for nearly 88% of NonQM production. Additionally, in the first quarter of 2017, the Company’s government loan production increased to $428.4 million, as compared to $394.0 million in the first quarter of 2016.  NonQM mortgages are typically a higher margin product for the Company. As of March 31, 2017, our locked pipeline, which represents mortgages we expect to close in the near future, was $553.1 million.  However, as of March 31, 2017, our NonQM pipeline had increased to approximately $201.8 million as compared to $147.9 million at December 31, 2016. In April 2017, the Company completed a successful $56 million common stock registered direct offering.  The estimated net proceeds to the Company from the sale of the shares of common stock in the registered direct offering were approximately $55.4 million.  The Company intends to use the net proceeds to continue to expand its servicing portfolio and assist with the Company’s anticipated return to the securitization market with its rapidly growing NonQM production.  Additionally, the net proceeds provide the Company the ability to continue to expand into diversified income platforms and take advantage of strategic opportunities as they arise. Mr. Joseph Tomkinson, Chairman and CEO of Impac Mortgage Holdings, Inc., commented, “We continue to see increased interest in NonQM loan products from both our investors and consumers.  Currently, with a pipeline of over $225 million of NonQM production, we have reached a monthly run rate of nearly $100 million.  We also continue to see more opportunities for increased efficiencies and process improvement through proprietary technology we are developing. ” This release contains operating income excluding changes in contingent consideration (Adjusted Operating Income) and per share as performance measures, which are considered non-GAAP financial measures, to further aid our investors in understanding and analyzing our core operating results and comparing them among periods.  Adjusted Operating Income and Adjusted Operating Income per share exclude certain items that we do not consider part of our core operating results. These non-GAAP financial measures are not intended to be considered in isolation or as a substitute for net earnings before income taxes, net earnings or diluted EPS prepared in accordance with GAAP.  The table below shows operating income per share excluding these items: (1) Includes the add back of interest expense on the convertible notes, net of tax used to calculate diluted earnings using the if-converted method. The Company will hold a conference call on May 10, 2017, at 9:00 a.m. Pacific Time (12:00 p.m. Eastern Time) to discuss the Company’s financial results and business outlook and to answer investor questions. After the Company’s prepared remarks, management will host a live Q&A session.  To submit questions via email, please email your questions to Justin.Moisio@ImpacMail.com.  Investors may participate in the conference call by dialing (844) 265-1560 conference ID number 18688383, or access the web cast via our web site at http://ir.impaccompanies.com. To participate in the conference call, dial in 15 minutes prior to the scheduled start time. The conference call will be archived on the Company's web site at http://ir.impaccompanies.com. This press release contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements, some of which are based on various assumptions and events that are beyond our control, may be identified by reference to a future period or periods or by the use of forward looking terminology, such as “may,” “capable,” “will,” “intends,” “believe,” “expect,” “likely,” “potentially”  ”appear,” “should,” “could,” “seem to,” “anticipate,” “expectations,” “plan,” “ensure,” or similar terms or variations on those terms or the negative of those terms. The forward-looking statements are based on current management expectations. Actual results may differ materially as a result of several factors, including, but not limited to the following:  failure to achieve the benefits expected from the acquisition of the CCM operations, including an increase in origination volume generally, increase in each of our origination channels and ability to successfully use the marketing platform to expand volumes of our other loan products; successful development, marketing, sale and financing of new and existing financial products, including expansion of non-Qualified Mortgage originations and conventional and government loan programs; ability to successfully diversify our mortgage products; volatility in the mortgage industry; unexpected interest rate fluctuations and margin compression; our ability to manage personnel expenses in relation to mortgage production levels; our ability to successfully use warehousing capacity; increased competition in the mortgage lending industry by larger or more efficient companies; issues and system risks related to our technology; ability to successfully create cost and product efficiencies through new technology; more than expected increases in default rates or loss severities and mortgage related losses; ability to obtain additional financing through lending and repurchase facilities, debt or equity funding, strategic relationships or otherwise;  the terms of any financing, whether debt or equity, that we do obtain and our expected use of proceeds from any financing; increase in loan repurchase requests and ability to adequately settle repurchase obligations; failure to create brand awareness; the outcome, including any settlements, of litigation or regulatory actions pending against us or other legal contingencies; and our compliance with applicable local, state and federal laws and regulations and other general market and economic conditions. For a discussion of these and other risks and uncertainties that could cause actual results to differ from those contained in the forward-looking statements, see the annual and quarterly reports we file with the Securities and Exchange Commission. This document speaks only as of its date and we do not undertake, and specifically disclaim any obligation, to release publicly the results of any revisions that may be made to any forward-looking statements to reflect the occurrence of anticipated or unanticipated events or circumstances after the date of such statements. Impac Mortgage Holdings, Inc. (IMH or Impac) provides innovative mortgage lending and warehouse lending solutions, as well as real estate solutions that address the challenges of today’s economic environment.  Impac’s operations include mortgage and warehouse lending, servicing, portfolio loss mitigation and real estate services as well as the management of the securitized long-term mortgage portfolio, which includes the residual interests in securitizations. For additional information, questions or comments, please call Justin Moisio, VP Business Development & Investor Relations at (949) 475-3988 or email Justin.Moisio@ImpacMail.com. Web site: http://ir.impaccompanies.com  or www.impaccompanies.com


News Article | May 9, 2017
Site: globenewswire.com

IRVINE, Calif., May 09, 2017 (GLOBE NEWSWIRE) -- Impac Mortgage Holdings, Inc. (NYSE MKT:IMH) announces the financial results for the quarter ended March 31, 2017. For the first quarter of 2017, the Company reported GAAP net earnings of $4.6 million, or $0.29 per diluted common share, and Adjusted Operating Income (as defined below) of $2.2 million, or $0.12 per diluted common share, as compared to GAAP net earnings of $981 thousand, or $0.08 per diluted common share, and Adjusted Operating Income of $7.0 million, or $0.60 per diluted common share for the first quarter of 2016. Operating income, excluding the changes in contingent consideration (“Adjusted Operating Income”), is considered a non-GAAP financial measurement; see the discussion and reconciliation on non-GAAP financial measures below. Net earnings include certain fair value adjustments, which are non-cash items and are not related to current operating results.  Although we are required by GAAP to record these fair value adjustments, management believes Adjusted Operating Income as defined above is more useful to discuss the ongoing and future operations of the Company, shown in the table below: Adjusted Operating Income decreased to $2.2 million, or $0.12 per diluted common share, for the first quarter of 2017 as compared to $7.0 million, or $0.60 per diluted common share, in in the first quarter of 2016.  The decrease in operating income was primarily due to a decrease in gain on sale of loans of $16.6 million resulting from a 33% decrease in total originations volume (as discussed below).  With the higher interest rate environment subsequent to the U.S. Presidential election in mid-November, the previously anticipated drop in refinance volume was the primary reason for the decline in operating income in the first quarter of 2017. However, as a result of a higher volume of NonQM and government loans, gain on sale margins increased by 7 basis points (“bps”) to 236 bps in the first quarter of 2017, as compared to 229 basis points in the first quarter of 2016.  In the first quarter of 2017, NonQM and government originations represented approximately 39% of total originations, as compared to just 20% of total originations in the first quarter of 2016. As a result of the retention of servicing starting in 2016, the unpaid principal balance (“UPB”) of the Company’s mortgage servicing portfolio increased 157% to $13.2 billion as of March 31, 2017 from March 31, 2016.  The servicing portfolio generated net servicing income of $7.3 million in the first quarter of 2017, a 251% increase over the net servicing income of $2.1 million in the first quarter of 2016.  Additionally, delinquencies within the servicing portfolio remain low at 0.27% for 60+ delinquencies as of March 31, 2017. The loss on mortgage servicing rights in the first quarter was primarily due to mark-to-market (“MTM”) changes from amortization of mortgage servicing rights (“MSR”) in the first quarter. During the first quarter of 2017, total originations decreased 33% to $1.6 billion as compared to $2.3 billion in the first quarter of 2016.  This decrease was caused by the previously anticipated drop in refinance volume as a result of rising interest rates at the end of last year and into the first quarter of 2017. During the first quarter of 2017, the origination volume of NonQM loans increased to $184.3 million, as compared to just $289.6 million of NonQM production for all of 2016, and $86.3 million in the fourth quarter of 2016.  There was an increase in NonQM origination volume across all channels in the first quarter of 2017 with 40% of the volume from the retail channel and 60% from the wholesale and correspondent channels.  In the fourth quarter of 2016, retail originations only accounted for 12% of NonQM production, while wholesale and correspondent originations accounted for nearly 88% of NonQM production. Additionally, in the first quarter of 2017, the Company’s government loan production increased to $428.4 million, as compared to $394.0 million in the first quarter of 2016.  NonQM mortgages are typically a higher margin product for the Company. As of March 31, 2017, our locked pipeline, which represents mortgages we expect to close in the near future, was $553.1 million.  However, as of March 31, 2017, our NonQM pipeline had increased to approximately $201.8 million as compared to $147.9 million at December 31, 2016. In April 2017, the Company completed a successful $56 million common stock registered direct offering.  The estimated net proceeds to the Company from the sale of the shares of common stock in the registered direct offering were approximately $55.4 million.  The Company intends to use the net proceeds to continue to expand its servicing portfolio and assist with the Company’s anticipated return to the securitization market with its rapidly growing NonQM production.  Additionally, the net proceeds provide the Company the ability to continue to expand into diversified income platforms and take advantage of strategic opportunities as they arise. Mr. Joseph Tomkinson, Chairman and CEO of Impac Mortgage Holdings, Inc., commented, “We continue to see increased interest in NonQM loan products from both our investors and consumers.  Currently, with a pipeline of over $225 million of NonQM production, we have reached a monthly run rate of nearly $100 million.  We also continue to see more opportunities for increased efficiencies and process improvement through proprietary technology we are developing. ” This release contains operating income excluding changes in contingent consideration (Adjusted Operating Income) and per share as performance measures, which are considered non-GAAP financial measures, to further aid our investors in understanding and analyzing our core operating results and comparing them among periods.  Adjusted Operating Income and Adjusted Operating Income per share exclude certain items that we do not consider part of our core operating results. These non-GAAP financial measures are not intended to be considered in isolation or as a substitute for net earnings before income taxes, net earnings or diluted EPS prepared in accordance with GAAP.  The table below shows operating income per share excluding these items: (1) Includes the add back of interest expense on the convertible notes, net of tax used to calculate diluted earnings using the if-converted method. The Company will hold a conference call on May 10, 2017, at 9:00 a.m. Pacific Time (12:00 p.m. Eastern Time) to discuss the Company’s financial results and business outlook and to answer investor questions. After the Company’s prepared remarks, management will host a live Q&A session.  To submit questions via email, please email your questions to Justin.Moisio@ImpacMail.com.  Investors may participate in the conference call by dialing (844) 265-1560 conference ID number 18688383, or access the web cast via our web site at http://ir.impaccompanies.com. To participate in the conference call, dial in 15 minutes prior to the scheduled start time. The conference call will be archived on the Company's web site at http://ir.impaccompanies.com. This press release contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements, some of which are based on various assumptions and events that are beyond our control, may be identified by reference to a future period or periods or by the use of forward looking terminology, such as “may,” “capable,” “will,” “intends,” “believe,” “expect,” “likely,” “potentially”  ”appear,” “should,” “could,” “seem to,” “anticipate,” “expectations,” “plan,” “ensure,” or similar terms or variations on those terms or the negative of those terms. The forward-looking statements are based on current management expectations. Actual results may differ materially as a result of several factors, including, but not limited to the following:  failure to achieve the benefits expected from the acquisition of the CCM operations, including an increase in origination volume generally, increase in each of our origination channels and ability to successfully use the marketing platform to expand volumes of our other loan products; successful development, marketing, sale and financing of new and existing financial products, including expansion of non-Qualified Mortgage originations and conventional and government loan programs; ability to successfully diversify our mortgage products; volatility in the mortgage industry; unexpected interest rate fluctuations and margin compression; our ability to manage personnel expenses in relation to mortgage production levels; our ability to successfully use warehousing capacity; increased competition in the mortgage lending industry by larger or more efficient companies; issues and system risks related to our technology; ability to successfully create cost and product efficiencies through new technology; more than expected increases in default rates or loss severities and mortgage related losses; ability to obtain additional financing through lending and repurchase facilities, debt or equity funding, strategic relationships or otherwise;  the terms of any financing, whether debt or equity, that we do obtain and our expected use of proceeds from any financing; increase in loan repurchase requests and ability to adequately settle repurchase obligations; failure to create brand awareness; the outcome, including any settlements, of litigation or regulatory actions pending against us or other legal contingencies; and our compliance with applicable local, state and federal laws and regulations and other general market and economic conditions. For a discussion of these and other risks and uncertainties that could cause actual results to differ from those contained in the forward-looking statements, see the annual and quarterly reports we file with the Securities and Exchange Commission. This document speaks only as of its date and we do not undertake, and specifically disclaim any obligation, to release publicly the results of any revisions that may be made to any forward-looking statements to reflect the occurrence of anticipated or unanticipated events or circumstances after the date of such statements. Impac Mortgage Holdings, Inc. (IMH or Impac) provides innovative mortgage lending and warehouse lending solutions, as well as real estate solutions that address the challenges of today’s economic environment.  Impac’s operations include mortgage and warehouse lending, servicing, portfolio loss mitigation and real estate services as well as the management of the securitized long-term mortgage portfolio, which includes the residual interests in securitizations. For additional information, questions or comments, please call Justin Moisio, VP Business Development & Investor Relations at (949) 475-3988 or email Justin.Moisio@ImpacMail.com. Web site: http://ir.impaccompanies.com  or www.impaccompanies.com


News Article | May 9, 2017
Site: globenewswire.com

IRVINE, Calif., May 09, 2017 (GLOBE NEWSWIRE) -- Impac Mortgage Holdings, Inc. (NYSE MKT:IMH) announces the financial results for the quarter ended March 31, 2017. For the first quarter of 2017, the Company reported GAAP net earnings of $4.6 million, or $0.29 per diluted common share, and Adjusted Operating Income (as defined below) of $2.2 million, or $0.12 per diluted common share, as compared to GAAP net earnings of $981 thousand, or $0.08 per diluted common share, and Adjusted Operating Income of $7.0 million, or $0.60 per diluted common share for the first quarter of 2016. Operating income, excluding the changes in contingent consideration (“Adjusted Operating Income”), is considered a non-GAAP financial measurement; see the discussion and reconciliation on non-GAAP financial measures below. Net earnings include certain fair value adjustments, which are non-cash items and are not related to current operating results.  Although we are required by GAAP to record these fair value adjustments, management believes Adjusted Operating Income as defined above is more useful to discuss the ongoing and future operations of the Company, shown in the table below: Adjusted Operating Income decreased to $2.2 million, or $0.12 per diluted common share, for the first quarter of 2017 as compared to $7.0 million, or $0.60 per diluted common share, in in the first quarter of 2016.  The decrease in operating income was primarily due to a decrease in gain on sale of loans of $16.6 million resulting from a 33% decrease in total originations volume (as discussed below).  With the higher interest rate environment subsequent to the U.S. Presidential election in mid-November, the previously anticipated drop in refinance volume was the primary reason for the decline in operating income in the first quarter of 2017. However, as a result of a higher volume of NonQM and government loans, gain on sale margins increased by 7 basis points (“bps”) to 236 bps in the first quarter of 2017, as compared to 229 basis points in the first quarter of 2016.  In the first quarter of 2017, NonQM and government originations represented approximately 39% of total originations, as compared to just 20% of total originations in the first quarter of 2016. As a result of the retention of servicing starting in 2016, the unpaid principal balance (“UPB”) of the Company’s mortgage servicing portfolio increased 157% to $13.2 billion as of March 31, 2017 from March 31, 2016.  The servicing portfolio generated net servicing income of $7.3 million in the first quarter of 2017, a 251% increase over the net servicing income of $2.1 million in the first quarter of 2016.  Additionally, delinquencies within the servicing portfolio remain low at 0.27% for 60+ delinquencies as of March 31, 2017. The loss on mortgage servicing rights in the first quarter was primarily due to mark-to-market (“MTM”) changes from amortization of mortgage servicing rights (“MSR”) in the first quarter. During the first quarter of 2017, total originations decreased 33% to $1.6 billion as compared to $2.3 billion in the first quarter of 2016.  This decrease was caused by the previously anticipated drop in refinance volume as a result of rising interest rates at the end of last year and into the first quarter of 2017. During the first quarter of 2017, the origination volume of NonQM loans increased to $184.3 million, as compared to just $289.6 million of NonQM production for all of 2016, and $86.3 million in the fourth quarter of 2016.  There was an increase in NonQM origination volume across all channels in the first quarter of 2017 with 40% of the volume from the retail channel and 60% from the wholesale and correspondent channels.  In the fourth quarter of 2016, retail originations only accounted for 12% of NonQM production, while wholesale and correspondent originations accounted for nearly 88% of NonQM production. Additionally, in the first quarter of 2017, the Company’s government loan production increased to $428.4 million, as compared to $394.0 million in the first quarter of 2016.  NonQM mortgages are typically a higher margin product for the Company. As of March 31, 2017, our locked pipeline, which represents mortgages we expect to close in the near future, was $553.1 million.  However, as of March 31, 2017, our NonQM pipeline had increased to approximately $201.8 million as compared to $147.9 million at December 31, 2016. In April 2017, the Company completed a successful $56 million common stock registered direct offering.  The estimated net proceeds to the Company from the sale of the shares of common stock in the registered direct offering were approximately $55.4 million.  The Company intends to use the net proceeds to continue to expand its servicing portfolio and assist with the Company’s anticipated return to the securitization market with its rapidly growing NonQM production.  Additionally, the net proceeds provide the Company the ability to continue to expand into diversified income platforms and take advantage of strategic opportunities as they arise. Mr. Joseph Tomkinson, Chairman and CEO of Impac Mortgage Holdings, Inc., commented, “We continue to see increased interest in NonQM loan products from both our investors and consumers.  Currently, with a pipeline of over $225 million of NonQM production, we have reached a monthly run rate of nearly $100 million.  We also continue to see more opportunities for increased efficiencies and process improvement through proprietary technology we are developing. ” This release contains operating income excluding changes in contingent consideration (Adjusted Operating Income) and per share as performance measures, which are considered non-GAAP financial measures, to further aid our investors in understanding and analyzing our core operating results and comparing them among periods.  Adjusted Operating Income and Adjusted Operating Income per share exclude certain items that we do not consider part of our core operating results. These non-GAAP financial measures are not intended to be considered in isolation or as a substitute for net earnings before income taxes, net earnings or diluted EPS prepared in accordance with GAAP.  The table below shows operating income per share excluding these items: (1) Includes the add back of interest expense on the convertible notes, net of tax used to calculate diluted earnings using the if-converted method. The Company will hold a conference call on May 10, 2017, at 9:00 a.m. Pacific Time (12:00 p.m. Eastern Time) to discuss the Company’s financial results and business outlook and to answer investor questions. After the Company’s prepared remarks, management will host a live Q&A session.  To submit questions via email, please email your questions to Justin.Moisio@ImpacMail.com.  Investors may participate in the conference call by dialing (844) 265-1560 conference ID number 18688383, or access the web cast via our web site at http://ir.impaccompanies.com. To participate in the conference call, dial in 15 minutes prior to the scheduled start time. The conference call will be archived on the Company's web site at http://ir.impaccompanies.com. This press release contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements, some of which are based on various assumptions and events that are beyond our control, may be identified by reference to a future period or periods or by the use of forward looking terminology, such as “may,” “capable,” “will,” “intends,” “believe,” “expect,” “likely,” “potentially”  ”appear,” “should,” “could,” “seem to,” “anticipate,” “expectations,” “plan,” “ensure,” or similar terms or variations on those terms or the negative of those terms. The forward-looking statements are based on current management expectations. Actual results may differ materially as a result of several factors, including, but not limited to the following:  failure to achieve the benefits expected from the acquisition of the CCM operations, including an increase in origination volume generally, increase in each of our origination channels and ability to successfully use the marketing platform to expand volumes of our other loan products; successful development, marketing, sale and financing of new and existing financial products, including expansion of non-Qualified Mortgage originations and conventional and government loan programs; ability to successfully diversify our mortgage products; volatility in the mortgage industry; unexpected interest rate fluctuations and margin compression; our ability to manage personnel expenses in relation to mortgage production levels; our ability to successfully use warehousing capacity; increased competition in the mortgage lending industry by larger or more efficient companies; issues and system risks related to our technology; ability to successfully create cost and product efficiencies through new technology; more than expected increases in default rates or loss severities and mortgage related losses; ability to obtain additional financing through lending and repurchase facilities, debt or equity funding, strategic relationships or otherwise;  the terms of any financing, whether debt or equity, that we do obtain and our expected use of proceeds from any financing; increase in loan repurchase requests and ability to adequately settle repurchase obligations; failure to create brand awareness; the outcome, including any settlements, of litigation or regulatory actions pending against us or other legal contingencies; and our compliance with applicable local, state and federal laws and regulations and other general market and economic conditions. For a discussion of these and other risks and uncertainties that could cause actual results to differ from those contained in the forward-looking statements, see the annual and quarterly reports we file with the Securities and Exchange Commission. This document speaks only as of its date and we do not undertake, and specifically disclaim any obligation, to release publicly the results of any revisions that may be made to any forward-looking statements to reflect the occurrence of anticipated or unanticipated events or circumstances after the date of such statements. Impac Mortgage Holdings, Inc. (IMH or Impac) provides innovative mortgage lending and warehouse lending solutions, as well as real estate solutions that address the challenges of today’s economic environment.  Impac’s operations include mortgage and warehouse lending, servicing, portfolio loss mitigation and real estate services as well as the management of the securitized long-term mortgage portfolio, which includes the residual interests in securitizations. For additional information, questions or comments, please call Justin Moisio, VP Business Development & Investor Relations at (949) 475-3988 or email Justin.Moisio@ImpacMail.com. Web site: http://ir.impaccompanies.com  or www.impaccompanies.com


News Article | May 10, 2017
Site: www.marketwired.com

MCLEAN, VA--(Marketwired - May 10, 2017) - Freddie Mac ( : FMCC) announced today that it has obtained its third insurance policy of the year under its Agency Credit Insurance Structure (ACIS®) program. It provides a combined maximum limit of up to approximately $440.3 million of losses on single-family loans and transfers a substantial portion of the remaining credit risk on Structured Agency Credit Risk (STACR®) debt notes, STACR 2017-DNA2. This transaction transferred a portion of mortgage credit risk on approximately $60.7 billion of unpaid principal balance (UPB) on single-family mortgages. Since the program's inception in 2013, Freddie Mac has placed over $7.2 billion in insurance coverage through 27 ACIS transactions. Freddie Mac has led the market in introducing new credit risk-sharing offerings with STACR, ACIS and Whole Loan Securities (WLS(SM)). The company has since grown its investor base to more than 220 unique investors, including insurers and reinsurers. Since 2013, the company has transferred a significant portion of credit risk on approximately $727 billion of UPB on single-family mortgages. Freddie Mac makes home possible for millions of families and individuals by providing mortgage capital to lenders. Since our creation by Congress in 1970, we've made housing more accessible and affordable for homebuyers and renters in communities nationwide. We are building a better housing finance system for homebuyers, renters, lenders and taxpayers. Learn more at FreddieMac.com, Twitter @FreddieMac and Freddie Mac's blog FreddieMac.com/blog.


News Article | February 15, 2017
Site: www.businesswire.com

MOUNT LAUREL, N.J.--(BUSINESS WIRE)--PHH Corporation (NYSE: PHH) (“PHH” or the “Company”) today announced financial results for the quarter ended December 31, 2016. For the quarter ended December 31, 2016, the Company reported Net loss attributable to PHH Corporation of $133 million or $2.49 per basic share. Net loss attributable to PHH Corporation for the quarter ended December 31, 2015, was $54 million or $0.92 per basic share. For the quarter ended December 31, 2016, core loss (after-tax)* and core loss per share* were $100 million and $1.86, respectively, which exclude a $55 million pre-tax unfavorable market-related mortgage servicing rights ("MSR") fair value adjustment, net of derivatives related to MSRs. Glen A. Messina, president and CEO of PHH Corporation, said, "After a comprehensive examination of all available strategic options, we have decided to close or exit our least profitable businesses, monetize a substantial amount of our assets and operate a smaller, focused, capital-light subservicing and portfolio retention business. These actions will allow us to minimize restructuring costs, maximize near-term capital distributions, preserve the value of our tax assets, and create incremental value through the ongoing operation of the business or future strategic actions, which we believe will maximize value for shareholders. We believe the remaining business platforms comprised of subservicing and portfolio retention have the potential to achieve low double-digit to mid-teen returns on capital after the completion of certain cost re-engineering, PLS exit, organic growth, and return of capital actions, and the resolution of our legacy legal and regulatory matters." Messina also commented, "Our financial performance for the fourth quarter reflects higher expenses related to certain outcomes of our strategic review process, including $41 million of PLS exit costs, a $23 million write-down of our investment in the STARS appraisal business, and transaction and advisory expenses." Our results in each respective period included the following: Core earnings or loss (pre-tax), core earnings or loss (after-tax), core earnings or loss per share, and adjusted cash flow are financial measures that are not in accordance with U.S. generally accepted accounting principles (GAAP). See the “Note Regarding Non-GAAP Financial Measures” below for a detailed description and reconciliation of such Non-GAAP financial measures to their most directly comparable GAAP financial measures, as required by Regulation G. Mortgage Production segment loss in the fourth quarter of 2016 was $62 million, compared to a segment profit of $22 million in the third quarter of 2016 and a segment loss of $21 million in the fourth quarter of 2015. The $84 million unfavorable change in segment results for the fourth quarter of 2016 compared to the third quarter of 2016 was primarily due to a $72 million decrease in Net revenues and an $18 million increase in Total expenses. The decline in Net revenues was primarily due to an unfavorable change to Other (loss) income driven by a $23 million impairment on our equity investment in Speedy Title and Appraisal Review Services LLC ("STARS"), a $37 million decrease in Gain on loans held for sale, net driven by a 43% decline in IRLCs expected to close, and a $10 million decline in Origination and other loan fees primarily driven by a 17% decrease in closing units from our real estate channel. The increase in Total expenses was primarily driven from Exit and disposal costs of $33 million related to our exit of the private label solutions ("PLS") business that was partially offset by a $6 million decline in Loan origination expenses and a $4 million decline in Commissions from lower overall closing and application volumes in the fourth quarter of 2016. The $41 million unfavorable change in segment results for the fourth quarter of 2016 compared to the fourth quarter of 2015 was primarily due to a $30 million decrease in Net revenues and a $14 million increase in Total expenses. The decrease in Net revenues was primarily due to an unfavorable change to Other (loss) income from a $23 million impairment on our equity method investment in STARS and a decrease of $11 million in Gain on loans held for sale, net driven by a 41% decline in IRLCs expected to close that was partially offset by a 100 basis point increase in average total loan margins. The increase in Total Expenses was primarily driven by the $33 million of Exit and disposal costs for the fourth quarter of 2016 that was partially offset by a $9 million decline in Other operating expenses primarily due to lower Corporate overhead costs from a reduced allocation to the Mortgage Production segment in 2016 as compared to 2015 and a $7 million decline in Loan origination expenses from lower overall closing and application volumes in the fourth quarter of 2016. Total fourth quarter 2016 mortgage closings were $8.9 billion, down 11% from the third quarter of 2016 and consistent with the fourth quarter of 2015. The decrease in total closings compared to the third quarter of 2016 was primarily attributable to seasonal declines in purchase volume. Our consistent total closings as compared to the fourth quarter of 2015 was driven by an increase in refinance closings from our portfolio recapture efforts that was offset by the exit from our wholesale/correspondent lending channel during the second quarter of 2016. IRLCs expected to close of $688 million in the fourth quarter of 2016 decreased 43% from the third quarter of 2016 and 41% from the fourth quarter of 2015. Total loan margin on IRLCs expected to close for the fourth quarter of 2016 was 405 bps, a 17 bps increase from the third quarter of 2016 and a 100 bps increase from the fourth quarter of 2015. The increase in margins is consistent with the decline in interest rates experienced beginning in June through November 2016 as loan margins tend to widen in periods of declining interest rates as industry participants attempt to balance origination volume with operational capacity. We began executing our plan to exit the PLS business in the fourth quarter of 2016. The PLS business represented 80% of our total closing volume (based on dollars) for the fourth quarter of 2016. We currently believe that we will be in a position to substantially exit the PLS business by the first quarter of 2018, subject to certain transition support requirements, and we currently have exit plans in place with clients representing approximately 55% of our PLS closing volume (based on closing dollars for the year ended December 31, 2016). For the year ended December 31, 2016, we have incurred $41 million of exit costs (pre-tax) related to the exit of PLS, which includes severance and retention programs, contract termination costs and a $15 million non-cash charge for asset impairment. We estimate we will incur approximately $75 million of additional exit costs (pre-tax) over the next 15 months. Additionally, while we implement the exit from this channel, we expect to incur pre-tax operating losses of approximately $120 million for PLS, including maintaining the support and compliance infrastructure needed to comply with both regulatory and contractual requirements. Mortgage Servicing segment loss in the fourth quarter of 2016 was $117 million, compared to a segment loss of $52 million and $65 million in the third quarter of 2016 and fourth quarter of 2015, respectively. The $65 million decline in segment results for the fourth quarter of 2016 compared to the third quarter of 2016 was due to a $53 million unfavorable change in Net revenues and a $12 million increase in Total Expenses. The decrease in Net revenues was primarily due to a $42 million greater loss from Market-related fair value adjustments of our MSRs, net of related derivatives. Our market-related fair value adjustments were primarily driven by $35 million of negative model adjustments in the fourth quarter of 2016 to reflect increased servicing costs and foreclosure losses and by a calibration of our valuation model considering the pricing associated with the MSR agreements executed in the fourth quarter of 2016, as we did not observe market participant pricing that was commensurate with the expectations associated with the sharp increase in interest rates after the U.S. presidential election. Additionally, we experienced a $7 million decline in Loan servicing income from a smaller average total loan servicing portfolio. The increase in Total expenses was primarily driven by $11 million in greater provisions for Legal and regulatory reserves. The $52 million unfavorable change in segment results for the fourth quarter of 2016 compared to the fourth quarter of 2015 was due to a $21 million decrease in Net revenues and a $31 million increase in Total expenses. The decrease in Net revenues was primarily due to a $14 million decline in Loan servicing income from a smaller average capitalized loan servicing portfolio. The increase in Total expenses was primarily driven by $22 million in greater provisions for Legal and regulatory reserves and $8 million of higher Repurchase and foreclosure-related charges driven by increased expenses that will not be reimbursed pursuant to mortgage insurance programs. In December 2016, we entered into resolution agreements with Fannie Mae and Freddie Mac to resolve substantially all representation and warranty exposure related to the sale of mortgage loans that were originated and delivered prior to September 30, 2016 and November 30, 2016, respectively. The resolution agreements do not cover loans with certain defects, which include but are not limited to, loans with certain title issues or with violations of law. The settlement amounts did not significantly exceed our recorded reserves. At December 31, 2016, the book value of our MSRs was $690 million, representing an 82 bps capitalized servicing rate. The MSR book value and capitalized servicing rate at September 30, 2016 was $645 million and 73 bps of the capitalized loan servicing portfolio. The MSR book value at December 31, 2015 was $880 million, representing an 89 bps capitalized servicing rate. For the fourth quarter of 2016, there was a $74 million increase from market-related fair value adjustments and $15 million in MSR book value that was added from loans sold that was partially offset by a $40 million decrease related to prepayments and the receipt of recurring cash flows and a $4 million decrease from MSR sales, as described in more detail below. At December 31, 2016, the unpaid principal balance (“UPB”) of our capitalized servicing portfolio was $84.7 billion, down 4% from September 30, 2016 and down 14% from December 31, 2015. Our capitalized servicing portfolio continues to decline due to the recent low interest rate environment leading to high prepayment activity that has exceeded additions from new loan production. In the fourth quarter of 2016, we entered into agreements to sell substantially all of our MSRs to New Residential Investment Corp. ("New Residential") and Lakeview Loan Servicing ("Lakeview"). The following table summarizes our MSRs committed under sale agreements, based on the portfolio as of December 31, 2016: In connection with the MSR sales, we expect to transfer approximately $300 million of Servicing advances (based on the December 31, 2016 portfolio). On February 2, 2017, the initial sale of GNMA MSRs to Lakeview was completed, representing $10.3 billion unpaid principal balance, $77 million of MSR fair value, and $11 million of Servicing advances. We expect to receive total proceeds of $88 million from the initial transfer. The final proceeds received from the MSR sales is dependent on the closing of the MSR sales, as well as portfolio composition and servicing advances outstanding at each transfer date, the amount of investor and origination source consents received, and transaction costs. The sale of $440 million of MSRs and Servicing advances currently requires consents other than GSEs. At December 31, 2016, our subservicing portfolio consisted of approximately 265,000 units, down 44% from September 30, 2016 and down 41% from December 31, 2015. Our total subservicing units declined by approximately 211,000 units during the fourth quarter of 2016 driven by the insourcing of Merrill Lynch Home Loans's portfolio and HSBC Bank USA’s sale of a population of loans that we subserviced. Net loss before income taxes for the fourth quarter of 2016 was $27 million, due to Strategic review expenses of $19 million and Exit and disposal costs related to PLS of $8 million that were not allocated back to our reportable segments. The Company will host a conference call at 10:00 a.m. (Eastern Time) on Thursday, February 16, 2017, to discuss its fourth quarter 2016 results. All interested parties are welcome to participate. An investor presentation with an appendix of supplemental schedules will accompany the conference call and be available by visiting the Investor Relations page of PHH's website at www.phh.com on Thursday, February 16, 2017, prior to the start of the conference call. You can access the conference call by dialing (888) 656-7432 or (913) 312-1460 and using the conference ID 7799107 approximately 10 minutes prior to the call. The conference call will also be webcast, which can be accessed from the Investor Relations page of PHH's website at www.phh.com under webcasts and presentations. A replay will be available beginning shortly after the end of the call through March 3, 2017, by dialing (888) 203-1112 or (719) 457-0820 and using conference ID 7799107, or by visiting the Investor Relations page of PHH's website at www.phh.com. Headquartered in Mount Laurel, New Jersey, PHH Corporation is a leading provider of end-to-end mortgage solutions through its subsidiary, PHH Mortgage. Its outsourcing model and proven expertise, combined with a strong commitment to operational excellence and customer service, has enabled PHH Mortgage to become one of the largest non-bank originators and servicers of residential mortgages in the United States. PHH Mortgage provides mortgage solutions for the real estate market and financial institutions, and offers home financing directly to consumers. For additional information, please visit www.phh.com. Certain statements in this press release are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Generally, forward looking-statements are not based on historical facts but instead represent only our current beliefs regarding future events. All forward-looking statements are, by their nature, subject to risks, uncertainties and other factors that could cause actual results, performance or achievements to differ materially from those expressed or implied in such forward-looking statements. Investors are cautioned not to place undue reliance on these forward-looking statements. Such statements may be identified by words such as “expects,” “anticipates,” “intends,” “projects,” “estimates,” “plans,” “may increase,” “may fluctuate” and similar expressions or future or conditional verbs such as “will,” “should,” “would,” “may” and “could.” You should understand that forward-looking statements are not guarantees of performance or results and are preliminary in nature. You should consider the areas of risk described under the heading “Cautionary Note Regarding Forward-Looking Statements” and “Risk Factors” in our periodic reports filed with the U.S. Securities and Exchange Commission, including our most recent Annual Report on Form 10-K and Quarterly Reports on Form 10-Q, in connection with any forward-looking statements that may be made by us or our businesses generally. Such periodic reports are available in the “Investors” section of our website at http://www.phh.com and are also available at http://www.sec.gov. Except for our ongoing obligations to disclose material information under the federal securities laws, applicable stock exchange listing standards and unless otherwise required by law, we undertake no obligation to release publicly any updates or revisions to any forward-looking statements or to report the occurrence or non-occurrence of anticipated or unanticipated events. Core earnings or loss (pre-tax and after-tax), core earnings or loss per share, and adjusted cash flow, are financial measures that are not in accordance with GAAP. See Non-GAAP Reconciliations below for a reconciliation of these measures to the most directly comparable GAAP financial measures as required by Regulation G. These Non-GAAP measures are used in managing certain aspects of the Company’s business. For example, management’s reviews of results incorporate Non-GAAP measures and certain of the Company’s debt agreements contain covenants calculated using a measure similar to the calculations of the Non-GAAP measures. The Company has also designed certain management incentives based upon the achievement of targets related to Non-GAAP measures. The Company believes that these Non-GAAP Financial Measures can be useful to investors because they provide a means by which investors can evaluate the Company’s underlying key drivers and operating performance of the business, exclusive of certain adjustments and activities that investors may consider to be unrelated to the underlying economic performance of the business for a given period. The Company also believes that any meaningful analysis of the Company’s financial performance by investors requires an understanding of the factors that drive the Company’s underlying operating performance which can be obscured by significant unrealized changes in value of the Company’s mortgage servicing rights, as well as any gain or loss on derivatives that are intended to offset market-related fair value adjustments on the Company’s mortgage servicing rights. The Company believes these Non-GAAP measures provide useful information to investors that is supplementary to our results in accordance with GAAP; however, there are inherent limitations to these measures and they should not be viewed as a substitute for our results in accordance with GAAP as measurements of the Company's financial performance. Core earnings or loss (pre-tax and after-tax) and core earnings or loss per share Core earnings or loss (after-tax) and core earnings or loss per share involves differences from Net income or loss attributable to PHH Corporation and Basic earnings or loss per share attributable to PHH Corporation computed in accordance with GAAP. Core earnings or loss (pre-tax and after-tax) and core earnings or loss per share measure the Company’s financial performance excluding unrealized changes in fair value of the Company’s mortgage servicing rights that are based upon projections of expected future cash flows and prepayments as well as realized and unrealized changes in the fair value of derivatives that are intended to offset changes in the fair value of mortgage servicing rights. The changes in fair value of mortgage servicing rights and related derivatives are highly sensitive to changes in interest rates and are dependent upon the level of current and projected interest rates at the end of each reporting period. Adjusted cash flow measures the Company’s Net increase or decrease in cash and cash equivalents for a given period excluding changes resulting from the issuance or repurchase of equity or the issuance or repayment of unsecured or other debt by PHH Corporation. The Company believes that Adjusted cash flow is a useful measure for investors because the measure may assist investors in determining the amount of cash and cash equivalents generated from business activities during a period that is available to repay unsecured debt or distribute to holders of the Company’s equity. Adjusted cash flow can be generated through a combination of earnings, more efficient utilization of asset-backed funding facilities, or an improved working capital position and can vary significantly between periods based upon a variety of potential factors including, but not limited to, timing related to cash collateral postings, mortgage origination volumes and loan margins.


News Article | February 23, 2017
Site: www.businesswire.com

NEW YORK--(BUSINESS WIRE)--Kroll Bond Rating Agency, Inc. (KBRA) is pleased to announce the assignment of preliminary ratings to the Class A notes, which are the sole class of securities issued in the VSD 2017-PLT1 transaction. VSD 2017-PLT1 is structured as a liquidation vehicle that monetizes recoveries from the assets to pay the rated notes. The transaction’s collateral is primarily comprised of performing loans (93.3% of the issuer’s basis), and also includes small exposures to non-performing loans (NPL) and real-estate-owned (REO) properties. Collectively, these equate to 201 assets, which have an aggregate unpaid principal balance (UPB) of $378.1 million and were acquired (191 assets) or originated (10 assets) by Värde Partners. Using the acquisition cost of the $299.6 million acquired assets and the UPB of the originated assets, the aggregate basis of the portfolio is $348.2 million (92.1% of UPB). The underlying collateral is comprised of commercial real estate properties (95.3% of the sponsor’s basis), land (4.5%) and single-family rental assets (0.2%). The top three state exposures are California (15.0%), Illinois (14.8%) and Texas (12.6%). The largest, top-ten, top-25 and top-50 relationships comprise 7.2%, 43.6%, 67.8%, and 84.2% of the pool’s acquisition basis, respectively. To evaluate and rate this transaction, KBRA followed a multi-step “ground-up” approach, which leveraged our commercial real estate methodologies. KBRA derived a “baseline value” for each collateral item using one or more methods. These included the income capitalization approach, comparable sales approach, as well as discounting third party valuation conclusions and the asset manager’s estimates of net recoveries. The baseline values were adjusted to derive KBRA’s baseline recovery proceeds, reflective of, among other items, the following: KBRA’s stressed resolution path and timeline, NOI captured from defaulted and REO assets, carry costs for non-income or negative-income producing assets, legal and foreclosure costs, and property sales costs. The baseline values and recovery proceeds were stressed further under the investment grade stress scenario. The resulting proceeds were applied to the transaction waterfall, while taking into account reserves, cash flow leakages and other structural elements, to determine our credit rating. This methodology is detailed in our publication entitled U.S. Liquidating Trust Rating Methodology for Pools of Distressed Commercial Real Estate, which was published on December 3, 2015, and can be accessed on our website. Overall, KBRA’s baseline recovery amounts were 83.9% of the UPB, 91.1% of the issuer’s acquisition basis, and 76.0% of the issuer’s projected net recovery amounts. For further details on KBRA’s analysis, please see our Presale Report, entitled VSD 2017-PLT1, which was published today at www.kbra.com. KBRA is registered with the U.S. Securities and Exchange Commission as a Nationally Recognized Statistical Rating Organization (NRSRO). In addition, KBRA is recognized by the National Association of Insurance Commissioners (NAIC) as a Credit Rating Provider (CRP).


News Article | February 15, 2017
Site: www.marketwired.com

MCLEAN, VA--(Marketwired - Feb 14, 2017) - Freddie Mac ( : FMCC) today priced a $752.5 million Structured Agency Credit Risk (STACR®) debt notes offering, the first high LTV deal of the year. Through STACR, its flagship credit risk transfer offering, Freddie Mac transfers a significant portion of its mortgage credit risk on certain groups of loans to private investors. STACR 2017-HQA1 has a reference pool of single-family mortgages with an unpaid principal balance (UPB) of approximately $29.7 billion, consisting of a subset of fixed-rate, single-family mortgages with an original term of 241 to 360 months acquired by Freddie Mac between April 1, 2016, and July 31, 2016 and with LTVs ranging from 80 to 97 percent. Freddie Mac holds the senior loss risk in the capital structure and a portion of the risk in the Class M-1, M-2 and B-1 tranches, and also a significant portion of the first loss in the B-2 tranche. Citigroup Global Markets Inc. and J.P. Morgan Securities LLC are co-lead managers and joint bookrunners. Freddie Mac has led the market in introducing new credit risk-sharing offerings with STACR, Agency Credit Insurance Structure (ACIS®) and Whole Loan Securities (WLS(SM)). The company has since grown its investor base to more than 200 unique investors, including insurers and reinsurers. Since 2013, the company has transferred a significant portion of credit risk on approximately $665 billion of UPB on single-family mortgages. Freddie Mac has a STACR issuance calendar to help investors plan their allocations. This announcement is not an offer to sell any Freddie Mac securities. Offers for any given security are made only through applicable offering circulars and related supplements, which incorporate Freddie Mac's Annual Report on Form 10-K for the year ended December 31, 2015, filed with the Securities and Exchange Commission (SEC) on February 18, 2016; all other reports Freddie Mac filed with the SEC pursuant to Section 13(a) of the Securities Exchange Act of 1934 (Exchange Act) since December 31, 2015, excluding any information "furnished" to the SEC on Form 8-K; and all documents that Freddie Mac files with the SEC pursuant to Sections 13(a), 13(c) or 14 of the Exchange Act, excluding any information furnished to the SEC on Form 8-K. Freddie Mac's press releases sometimes contain forward-looking statements. A description of factors that could cause actual results to differ materially from the expectations expressed in these and other forward-looking statements can be found in the company's Annual Report on Form 10-K for the year ended December 31, 2015, and its reports on Form 10-Q and Form 8-K, filed with the SEC and available on the Investor Relations page of the company's Web site at www.FreddieMac.com/investors and the SEC's Web site at www.sec.gov. Freddie Mac makes home possible for millions of families and individuals by providing mortgage capital to lenders. Since our creation by Congress in 1970, we've made housing more accessible and affordable for homebuyers and renters in communities nationwide. We are building a better housing finance system for homebuyers, renters, lenders and taxpayers. Learn more at FreddieMac.com, Twitter @FreddieMac and Freddie Mac's blog FreddieMac.com/blog.

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