Form 8-K WALTER INVESTMENT MANAGE For: Nov 09

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November 9, 2016 6:25 AM EST

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): November 9, 2016

Walter Investment Management Corp.

(Exact name of registrant as specified in its charter)


Maryland	001-13417	13-3950486
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification No.)

3000 Bayport Drive, Suite 1100 Tampa, FL		33607
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (813) 421-7600

Not Applicable

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02. Results of Operations and Financial Condition.

On November 9, 2016, Walter Investment Management Corp. (the “Company”) issued a press release announcing its financial results for the quarter ended September 30, 2016, as well as updates on operational highlights for the Company. On the same date, the Company posted earnings presentation materials, which include a financial supplement, on its investor relations website at http://investor.walterinvestment.com. These materials are being made available in connection with the Company’s earnings conference call and audio webcast on November 9, 2016 at 9:00 a.m. ET. The press release and the earnings presentation are furnished as Exhibits 99.1 and 99.2 to this Current Report on Form 8-K and are hereby incorporated herein by reference.

Item 7.01. Regulation FD Disclosure.

The information set forth above under Item 2.02 is hereby incorporated herein by reference.

In accordance with General Instruction B.2 of Form 8-K, the information being furnished pursuant to this Current Report on Form 8-K, including Exhibits 99.1 and 99.2, shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference into any registration statement or other document filed by the Company under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such filing.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits.


Exhibit No.		Description

99.1		Press Release, dated November 9, 2016

99.2		Earnings Presentation, including Financial Supplement, dated November 9, 2016

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.


	WALTER INVESTMENT MANAGEMENT CORP.

Date: November 9, 2016	By:	/s/ Gary L. Tillett
		Gary L. Tillett, Executive Vice President and Chief Financial Officer

EXHIBIT INDEX


Exhibit No.		Description

99.1		Press Release, dated November 9, 2016

99.2		Earnings Presentation, including Financial Supplement, dated November 9, 2016

Exhibit 99.1

LOGO

Press Release

Investor Contact: Kimberly Perez

SVP & Chief Accounting Officer

813.421.7694

[email protected]

FOR IMMEDIATE RELEASE

November 9, 2016

WALTER INVESTMENT MANAGEMENT CORP. ANNOUNCES

THIRD QUARTER 2016 HIGHLIGHTS AND FINANCIAL RESULTS

(Tampa, Fla.) – Walter Investment Management Corp. (NYSE: WAC) (“Walter Investment” or the “Company”) today announced operational highlights and financial results for the quarter ended September 30, 2016.

Third Quarter 2016 Operational Highlights and Recent Developments

•

New leadership and engaged workforce

•

New Chief Executive Officer began September 12, 2016 and restructured management team into a more streamlined and simple organization

•

Capital efficiency

•

Transactions with New Residential Mortgage LLC (“NRM”)

•

Closed previously announced ~$32 BN UPB MSR sale to NRM on October 3, 2016 with sub-servicing retained

•

Agreed in October to sell incremental $5.0 BN UPB of MSR to NRM, with sub-servicing expected to be retained⁽¹⁾

•

Negotiating transaction documents relating to Walter Capital Opportunity (“WCO”) asset sale and related transactions⁽²⁾

•

Repurchased $47.5 MN principal balance of Convertible Notes during Q3 2016 for $24.8 MN

•

Issuance of $300 million of 2-year term notes under GTAAFT facility

•

Process efficiency

•

New leadership fully engaged in reassessment of high impact areas and timelines

Third Quarter 2016 Financial Results

GAAP net loss for the quarter ended September 30, 2016 was $101.8 million, or ($2.82) per share, as compared to a GAAP net loss of $76.9 million, or ($2.04) per share for the quarter ended September 30, 2015. The 2016 net loss includes goodwill and intangible assets impairment charges of $60.6 million after tax, or ($1.68) per share⁽³⁾, and non-cash charges of $17.0 million after tax, or ($0.47) per share⁽³⁾, resulting from fair value changes due to changes in valuation inputs and other assumptions. Adjusted EBITDA (“AEBITDA”) for the current quarter was $93.7 million and Adjusted Loss was $6.3 million after tax, or ($0.17) per share⁽³⁾.

⁽¹⁾	Transaction remains subject to GSE approval and other conditions to closing.

⁽²⁾	Transactions subject to negotiation, finalization and execution of transaction documents and, thereafter, GSE approval and other conditions to closing, as applicable.

⁽³⁾	Goodwill and intangible assets impairment charges of $97.7 million and non-cash charges of $27.4 million from fair value changes due to changes in valuation inputs and other assumptions are reflected net of tax using the Company’s estimated effective tax rate of 38%.

The goodwill impairment charge incurred in the current quarter relates to the Servicing reporting unit and was primarily the result of lower forecasted cash flows due to continued level of elevated expenses during the third quarter. As a result of this goodwill impairment charge, the Servicing reporting unit no longer has goodwill. The intangible assets impairment was related to the Reverse Mortgage segment and was driven by the shift in strategic direction and reduced profitability expectations for the business.

“Since joining Walter I have channeled my energy to spending time in our business centers evaluating our organization front to back. Clearly we have work to do in a number of important areas but I was encouraged with what I learned and took quick initial actions to simplify, flatten and focus Walter on our customers, operational fundamentals, integration opportunities across our businesses and, most importantly, execution and performance accountability,” said Anthony N. Renzi, Walter Investment’s Chief Executive Officer and President. “I believe that the strategic pillars of capital efficiency, process efficiency and new leadership along with an engaged workforce are the foundation to achieving our goals of delivering consistent profitability and sustainable growth.

We continue to progress on our capital efficiency goals, including the transition to a more fee-for-service business, by completing a series of transactions with New Residential Mortgage, including selling MSRs with sub-servicing retained. These transactions allow us to reduce our interest rate risk exposure and free up capital. Additionally, the cash expected to be generated will enable us to further reduce our debt in the most efficient way possible.

Finally, we continue to take actions to reduce our cost structure and generate additional ways in which we can leverage Lean process improvements, technologies and automation, and employee training to drive process efficiencies and additional productivity. As we progress on these goals, we consistently focus on our core business fundamentals of caring for customers, managing risk and generating cash, with a strong emphasis on performance management and controls. I am excited to be a part of this organization and am ready to face the challenges ahead, confident that the changes underway will put Walter in the best position to succeed,” concluded Mr. Renzi.

Third Quarter 2016 Financial and Operating Overview

Total revenue for the third quarter of 2016 was $297.3 million, an increase of $77.9 million as compared to the prior year quarter, primarily due to $113.4 million higher net servicing revenue and fees partially offset by $34.0 million lower fair value gains on reverse loans and liabilities. The increase in net servicing revenue resulted from $138.9 million lower fair value losses on mortgage servicing rights primarily due to market-driven changes in interest rates. Offsetting this increase was a $10.3 million unfavorable fair value change on servicing rights related liabilities, $7.9 million lower incentive and performance fees driven by lower completed modifications and $7.2 million lower servicing fees primarily due to run-off of the servicing portfolio and the sale of servicing rights for which we did not retain sub-servicing.

Total expenses for the third quarter of 2016 were $465.8 million, an increase of $101.7 million as compared to the prior year quarter, reflecting $97.7 million of goodwill and intangible assets impairment charges in the Servicing and Reverse Mortgage reporting units, respectively.

Segment Results

Results for the Company’s segments are presented below.

Servicing

Ditech is nationally ranked as a top 10 servicer by UPB, servicing approximately 2.0 million accounts, with a UPB of approximately $235.0 billion as of September 30, 2016. On October 3, 2016, the Company closed on the previously announced sale of mortgage servicing rights to NRM, with sub-servicing retained. The Company also agreed in October to the sale of an incremental $5.0 billion UPB of mortgage servicing rights to NRM, with sub-servicing expected to be retained⁽¹⁾. Additionally, Walter Investment, WCO and NRM are negotiating transaction documents relating to a sale of substantially all of WCO’s assets to NRM, including approximately $24.0 billion UPB of base MSR related to WCO excess servicing spread assets⁽²⁾. Ditech expects to sub-service all of the mortgage servicing rights to be sold by WCO and Ditech to NRM in connection with these transactions. During the three months ended September 30, 2016, the Company experienced a net disappearance rate of 17.7%, an increase of 3.3% as compared to the prior year quarter.

⁽¹⁾	Transaction remains subject to GSE approval and other conditions to closing.

⁽²⁾	Transactions subject to negotiation, finalization and execution of transaction documents and, thereafter, GSE approval and other conditions to closing, as applicable.

The Servicing segment reported $161.6 million of pre-tax loss for the third quarter of 2016 as compared to a pre-tax loss of $152.8 million in the prior year quarter. During the current quarter, the segment generated revenue of $148.9 million, a $117.7 million increase as compared to the third quarter of 2015. This increase was primarily the result of $138.9 million lower fair value losses on our mortgage servicing rights, partially offset by $10.3 million of unfavorable fair value changes on servicing rights related liabilities and $7.5 million lower servicing fees driven by the run-off of the servicing portfolio and the sale of servicing rights for which we did not retain sub-servicing.

Expense for the Servicing segment was $309.7 million, an increase of $116.9 million as compared to the prior year quarter, reflecting $91.0 million of goodwill impairment charges. Operating expenses were $189.7 million, $25.7 million higher as compared to the prior year quarter, driven by additional costs to support efficiency and technology-related initiatives including our servicing platform conversion as well as higher legal accruals for loss contingencies and other legal expenses. Current quarter expenses also included $16.7 million of interest expense and $12.3 million of depreciation and amortization.

The segment generated AEBITDA of $48.4 million and Adjusted Loss of $17.7 million, a decline of $40.8 million and $32.3 million, respectively, as compared to the prior year quarter. These declines were primarily due to a higher level of expenses coupled with lower incentive and performance fees and lower servicing fees.

Originations

Ditech is nationally ranked as a top 20 originator by UPB, generating total pull-through adjusted locked volume for the third quarter of $5.8 billion. While total pull-through adjusted locked volumes declined $0.5 billion as compared to the prior year quarter, there was an increase in locked volumes of $0.2 billion in the higher margin consumer lending channel. Funded loans in the current quarter totaled $5.3 billion, a decrease of 23% from the prior year quarter, primarily driven by declines in the correspondent channel. The combined direct margin for the current quarter was 109 bps, an increase of 3 bps from the prior year quarter, consisting of a weighted average of 189 bps direct margin in the consumer lending channel and 53 bps direct margin in the correspondent channel. The Originations business delivered a recapture rate of 16% for the current quarter.

The Originations segment reported $51.7 million of pre-tax income for the three months ended September 30, 2016, an increase of $15.2 million over the prior year quarter. The segment generated revenue of $133.4 million in the third quarter of 2016, relatively flat as compared to the prior year quarter. Net gains on sales of loans improved $5.7 million as compared to the prior year quarter, primarily due to strong margins driven by a channel mix shift to the higher margin consumer channel, partially offset by $4.3 million lower originations fee income on lower volumes.

Expenses for the Originations segment of $81.8 million declined 14% compared to the prior year quarter, driven by $5.6 million lower salaries and benefits on lower average headcount and $4.6 million lower general and administrative expenses primarily driven by a lower volume of loan fundings and decreased advertising. Expenses for the quarter also included $8.7 million of interest expense and $2.3 million of depreciation and amortization.

The segment generated Adjusted Earnings of $55.7 million and AEBITDA of $58.0 million for the third quarter of 2016, an increase of $11.8 million and $7.0 million, respectively as compared to the prior year quarter, driven primarily by lower expenses.

Reverse Mortgage

The Reverse Mortgage business grew its serviced portfolio 5% as compared to the prior year quarter to $20.8 billion of UPB at September 30, 2016. During the third quarter, the business securitized $246 million of HECM loans.

The Reverse Mortgage segment reported $23.0 million of pre-tax loss in the current quarter, as compared to $22.5 million of pre-tax income in the prior year quarter. The segment generated revenue of $27.0 million for the quarter, a decline of $38.4 million as compared to the prior year quarter primarily due to $34.0 million of lower net fair value gains on reverse loans and related HMBS obligations largely resulting from a flattening in the interest rate curve in 2016 as compared to 2015. Current quarter revenues included $18.6 million net fair value gains on reverse loans and related HMBS obligations, $7.2 million in net servicing revenue and fees and $1.2 million of other revenues. Total expenses for the third quarter of $50.0 million increased $7.2 million as compared to the prior year quarter, primarily driven by $6.7 million of intangible assets impairment charges.

The segment reported an Adjusted Loss of $12.4 million and AEBITDA of ($10.9) million for the third quarter of 2016, a decrease of approximately $13.2 million in each metric as compared to the prior year period, reflecting lower securitization volumes driving a reduction in net servicing revenue and fees, partially offset by a decrease in salaries and benefits.

Other Non-Reportable Segment

The Other Non-Reportable segment reported $25.3 million of pre-tax loss for the third quarter of 2016, an improvement of $12.5 million as compared to the prior year quarter, primarily due to a $13.7 million net gain on debt extinguishment largely attributable to the repurchase of a portion of our Convertible Notes with a carrying value of $39.3 million. The segment reported nominal revenue in both the current and prior year quarters. Total expenses of $36.1 million in the current quarter decreased 16% as compared to the prior year quarter, driven by the resolution of certain matters within the Investment Management business and $1.4 million lower interest expense.

The Other non-reportable segment had an Adjusted Loss of $35.7 million and AEBITDA of ($1.7) million for the third quarter of 2016 as compared to an Adjusted Loss of $32.6 million and AEBITDA of $3.1 million in the third quarter of 2015.

About Walter Investment Management Corp.

Walter Investment Management Corp. is a diversified mortgage banking firm focused primarily on the servicing and origination of residential loans, including reverse loans. Based in Tampa, Fla., the Company has approximately 5,000 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 our website is not a part of this release.

Conference Call Webcast

Members of the Company’s leadership team will discuss Walter Investment’s third quarter results and other general business matters during a conference call and live webcast to be held on Wednesday, November 9, 2016, at 9 a.m. Eastern Time. To listen to the event live or in an archive, and to access presentation slides (which include supplemental information) which will be available for at least 30 days, visit the Company’s website at www.walterinvestment.com.

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.

Disclaimer and Cautionary Note Regarding Forward-Looking Statements

This press release contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended. 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. 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” in our Annual Report on Form 10-K for the year ended December 31, 2015 and in our Quarterly Reports on Form 10-Q for the quarterly periods ended March 31, 2016, June 30, 2016 and September 30, 2016 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:

•

our ability to operate our business in compliance with existing and future laws, rules, regulations and contractual commitments affecting our business, including those relating to the origination and servicing of residential loans, the management of third-party assets and the insurance industry (including lender-placed insurance), and changes to, and/or more stringent enforcement of, such laws, rules, regulations and contracts;

•

increased scrutiny and potential enforcement actions by federal and state authorities;

•

the substantial resources (including senior management time and attention) we devote to, and the significant compliance costs we incur in connection with, regulatory compliance and regulatory examinations and inquiries, and any consumer redress, fines, penalties or similar payments we make in connection with resolving such matters;

•

uncertainties relating to interest curtailment obligations and any related financial and litigation exposure (including exposure relating to false claims);

•

potential costs and uncertainties, including the effect on future revenues, associated with and arising from litigation, regulatory investigations and other legal proceedings;

•

our dependence on U.S. government-sponsored entities (especially Fannie Mae) and agencies and their residential loan programs and our ability to maintain relationships with, and remain qualified to participate in programs sponsored by, such entities, our ability to satisfy various existing or future GSE, agency and other capital, net worth, liquidity and other financial requirements applicable to our business, and our ability to remain qualified as a GSE approved seller, servicer or component servicer, including the ability to continue to comply with the GSEs’ respective residential loan and selling and servicing guides;

•

uncertainties relating to the status and future role of GSEs, and the effects of any changes to the origination and/or servicing requirements of the GSEs or various regulatory authorities or the servicing compensation structure for mortgage servicers pursuant to programs of GSEs or various regulatory authorities;

•

our ability to maintain our loan servicing, loan origination, insurance agency or collection agency licenses, or any other licenses necessary to operate our businesses, or changes to, or our ability to comply with, our licensing requirements;

•

our ability to comply with the terms of the stipulated order resolving allegations arising from an FTC and CFPB investigation of Ditech Financial;

•

operational risks inherent in the mortgage servicing and mortgage originations businesses, including our ability to comply with the various contracts to which we are a party, and reputational risks;

•

risks related to the significant amount of senior management turnover recently experienced by the Company;

•

risks related to our substantial levels of indebtedness, including our ability to comply with covenants contained in our debt agreements or obtain any necessary waivers or amendments, generate sufficient cash to service such indebtedness and refinance such indebtedness on favorable terms, as well as our ability to incur substantially more debt;

•

our ability to renew advance financing facilities or warehouse facilities and maintain adequate borrowing capacity under such facilities;

•

our ability to maintain or grow our servicing business and our residential loan originations business;

•

our ability to achieve our strategic initiatives, particularly our ability to: execute and complete balance sheet management activities; execute and realize planned operational improvements and efficiencies; make arrangements with potential capital partners; complete sales of assets to, and enter into other arrangements with, third parties; increase the mix of our fee-for-service business; reduce our debt; and develop new business, including acquisitions of MSRs or entering into new subservicing arrangements;

•

uncertainties relating to the potential sale of substantially all of our insurance business;

•

changes in prepayment rates and delinquency rates on the loans we service or sub-service;

•

the ability of our clients and credit owners to transfer or otherwise terminate our servicing or sub-servicing rights;

•

a downgrade of, or other adverse change relating to, our servicer ratings or credit ratings;

•

our ability to collect reimbursements for servicing advances and earn and timely receive incentive payments and ancillary fees on our servicing portfolio;

•

our ability to collect indemnification payments and enforce repurchase obligations relating to mortgage loans we purchase from our correspondent clients and our ability to collect in a timely manner indemnification payments relating to servicing rights we purchase from prior servicers;

•

local, regional, national and global economic trends and developments in general, and local, regional and national real estate and residential mortgage market trends in particular, including the volume and pricing of home sales and uncertainty regarding the levels of mortgage originations and prepayments;

•

uncertainty as to the volume of originations activity we will benefit from prior to, and following, the expiration of HARP, which is scheduled to occur on September 30, 2017, including uncertainty as to the number of “in-the-money” accounts we may be able to refinance;

•

risks associated with the origination, securitization and servicing of reverse mortgages, including changes to reverse mortgage programs operated by FHA, HUD or Ginnie Mae, our ability to accurately estimate interest curtailment liabilities, continued demand for HECM loans and other reverse mortgages, our ability to fund HECM repurchase obligations, our ability to fund principal additions on our HECM loans, and our ability to securitize our HECM loans and tails;

•

our ability to realize all anticipated benefits of past, pending or potential future acquisitions or joint venture investments;

•

the effects of competition on our existing and potential future business, including the impact of competitors with greater financial resources and broader scopes of operation;

•

changes in interest rates and the effectiveness of any hedge we may employ against such changes;

•

risks and potential costs associated with technology and cybersecurity, including: the risks of technology failures and of cyber-attacks against us or our vendors; our ability to adequately respond to actual or alleged cyber-attacks; and our ability to implement adequate internal security measures and protect confidential borrower information;

•

risks and potential costs associated with the implementation of new or more current technology such as MSP, the use of vendors (including offshore vendors) or the transfer of our servers or other infrastructure to new data center facilities;

•

our ability to comply with evolving and complex accounting rules, many of which involve significant judgment and assumptions;

•

the risk that we could have an “ownership change” under Section 382 of the Internal Revenue Code of 1986, as amended, that could limit our ability to use tax losses to offset future taxable income;

•

uncertainties regarding impairment charges relating to our goodwill or other intangible assets;

•

our ability to maintain effective internal controls over financial reporting and disclosure controls and procedures;

•

our ability to manage conflicts of interest relating to our investment in WCO and maintain our relationship with WCO; and

•

risks related to our relationship with Walter Energy and uncertainties arising from or relating to its bankruptcy filings, including potential liability for any taxes, interest and/or penalties owed by the Walter Energy consolidated group for the full or partial tax years during which certain of the Company’s former subsidiaries were a part of such consolidated group and certain other tax risks allocated to us in connection with our spin-off from Walter Energy.

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.

Amounts or metrics that relate to future earnings projections are forward-looking and subject to significant business, economic, regulatory and competitive uncertainties, many of which are beyond the control of us and our management, and are based upon assumptions with respect to future decisions, which are subject to change. Actual results will vary and those variations may be material. Nothing in this press release should be regarded as a representation by any person that any target will be achieved and we undertake no duty to update any target. Please refer to the disclosures in this press release, in our Annual Report on Form 10-K for the year ended December 31, 2015, our Quarterly Reports on Form 10-Q for the quarterly periods ended March 31, 2016, June 30, 2016 and September 30, 2016 and our other filings with the SEC for important information regarding forward-looking statements and the use and limitations of non-GAAP financial measures.

In addition, this press 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.

Walter Investment Management Corp. and Subsidiaries

Consolidated Statements of Comprehensive Income (Loss)

(in thousands)


	For the Three Months Ended September 30,						For the Nine Months Ended September 30,
	2016			2015			2016			2015
REVENUES
Net servicing revenue and fees	$	111,629		$	(1,771	)	$	37,803		$	313,031
Net gains on sales of loans		122,014			116,218			306,667			360,844
Interest income on loans		11,332			12,410			35,352			62,537
Net fair value gains on reverse loans and related HMBS obligations		18,627			52,644			61,485			90,233
Insurance revenue		10,000			8,763			31,644			34,323
Other revenues		23,728			31,129			78,623			81,715

Total revenues		297,330			219,393			551,574			942,683

EXPENSES
Salaries and benefits		133,199			142,088			399,519			432,473
General and administrative		151,792			132,067			417,174			402,814
Goodwill and intangible assets impairment		97,716			—			313,128			56,539
Interest expense		65,302			66,728			193,950			210,264
Depreciation and amortization		16,580			20,646			45,543			53,371
Other expenses, net		1,206			2,595			5,609			8,043

Total expenses		465,795			364,124			1,374,923			1,163,504

OTHER GAINS (LOSSES)
Net gains on extinguishment		13,734			—			14,662			—
Other net fair value gains (losses)		(3,302	)		1,119			(6,265	)		3,573
Other		(150	)		12,054			(1,706	)		21,013

Total other gains		10,282			13,173			6,691			24,586

Loss before income taxes		(158,183	)		(131,558	)		(816,658	)		(196,235	)
Income tax benefit		(56,357	)		(54,630	)		(309,729	)		(50,180	)

Net loss	$	(101,826	)	$	(76,928	)	$	(506,929	)	$	(146,055	)

Comprehensive loss	$	(101,840	)	$	(76,793	)	$	(506,902	)	$	(145,804	)

Net loss	$	(101,826	)	$	(76,928	)	$	(506,929	)	$	(146,055	)

Basic and diluted loss per common and common equivalent share	$	(2.82	)	$	(2.04	)	$	(14.15	)	$	(3.87	)

Weighted-average common and common equivalent shares outstanding — basic and diluted		36,144			37,802			35,828			37,760

Walter Investment Management Corp. and Subsidiaries

Consolidated Balance Sheets

(in thousands, except share and per share data)


	September 30, 2016			December 31, 2015
	(unaudited)
ASSETS
Cash and cash equivalents	$	285,682		$	202,828
Restricted cash and cash equivalents		300,268			708,099
Residential loans at amortized cost, net (includes $3,224 and $4,457 in allowance for loan losses at September 30, 2016 and December 31, 2015, respectively)		616,936			541,406
Residential loans at fair value		12,640,302			12,673,439
Receivables, net (includes $15,010 and $16,542 at fair value at September 30, 2016 and December 31, 2015, respectively)		196,939			214,398
Servicer and protective advances, net (includes $124,055 and $120,338 in allowance for uncollectible advances at September 30, 2016 and December 31, 2015, respectively)		1,274,641			1,595,911
Servicing rights, net (includes $1,195,014 and $1,682,016 at fair value at September 30, 2016 and December 31, 2015, respectively)		1,284,543			1,788,576
Goodwill		65,302			367,911
Intangible assets, net		68,075			84,038
Premises and equipment, net		94,586			106,481

Deferred tax assets, net		425,878			108,050
Other assets (includes $80,435 and $58,512 at fair value at September 30, 2016 and December 31, 2015, respectively)		255,259			200,364

Total assets	$	17,508,411		$	18,591,501

LIABILITIES AND STOCKHOLDERS’ EQUITY
Payables and accrued liabilities (includes $18,522 and $6,475 at fair value at September 30, 2016 and December 31, 2015, respectively)	$	763,950		$	639,980
Servicer payables		141,422			603,692
Servicing advance liabilities		1,023,770			1,229,280
Warehouse borrowings		1,362,209			1,340,388
Servicing rights related liabilities at fair value		119,267			117,000
Corporate debt		2,124,541			2,157,424
Mortgage-backed debt (includes $529,373 and $582,340 at fair value at September 30, 2016 and December 31, 2015, respectively)		970,065			1,051,679
HMBS related obligations at fair value		10,699,720			10,647,382

Total liabilities		17,204,944			17,786,825

Commitments and contingencies (Note 15)

Stockholders’ equity:
Preferred stock, $0.01 par value per share:
Authorized - 10,000,000 shares
Issued and outstanding - 0 shares at September 30, 2016 and December 31, 2015		—			—
Common stock, $0.01 par value per share:
Authorized - 90,000,000 shares
Issued and outstanding - 36,311,037 and 35,573,405 shares at September 30, 2016 and December 31, 2015, respectively		363			355
Additional paid-in capital		597,139			591,454
Retained earnings (accumulated deficit)		(294,875	)		212,054
Accumulated other comprehensive income		840			813

Total stockholders’ equity		303,467			804,676

Total liabilities and stockholders’ equity	$	17,508,411		$	18,591,501

Non-GAAP Financial Measures

We manage our Company in three reportable segments: Servicing, Originations and Reverse Mortgage. We measure 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), Adjusted Earnings per share 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) and Adjusted Earnings per share is defined as net income (loss) with respect to the consolidated entity, and income (loss) before income taxes at the segment level, plus: changes in fair value due to changes in valuation inputs and other assumptions; certain depreciation and amortization costs related to the increased basis in assets (including servicing rights and sub-servicing contracts) acquired within business combination transactions (or step-up depreciation and amortization); goodwill and intangible assets impairment, if any; a portion of the provision for curtailment expense, net of expected third-party recoveries; share-based compensation expense; non-cash interest expense; restructuring 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. Adjusted Earnings (Loss) and Adjusted Earnings per share exclude unrealized changes in fair value of MSRs that are based on projections of expected future cash flows and prepayments. Adjusted Earnings (Loss) and Adjusted Earnings per share include 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) and Adjusted Earnings per share include cash generated from reverse mortgage origination activities. Adjusted Earnings (Loss) and Adjusted Earnings per share 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.

Adjusted EBITDA eliminates the effects of financing, income taxes and depreciation and amortization. Adjusted EBITDA is defined as net income (loss) with respect to the consolidated entity, and income (loss) before income taxes at the segment level, 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; share-based compensation expense; restructuring 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 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. 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. 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.

The Company intends to revise its method of calculating Adjusted Earnings (Loss) beginning with its Form 10-K for the fiscal year ended December 31, 2016 (and related earnings materials) to eliminate adjustments for step-up depreciation and amortization, which represents depreciation and amortization costs related to the increased basis in assets (including servicing rights and sub-servicing contracts) acquired within business combination transactions.

Adjusted Earnings (Loss), Adjusted Earnings per share 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), Adjusted Earnings per share 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:

•

Adjusted Earnings (Loss), Adjusted Earnings per share and Adjusted EBITDA do not reflect cash expenditures for long-term assets and other items that have been and will be incurred, future requirements for capital expenditures or contractual commitments;

•

Adjusted Earnings (Loss), Adjusted Earnings per share and Adjusted EBITDA do not reflect changes in, or cash requirements for, our working capital needs;

•

Adjusted Earnings (Loss), Adjusted Earnings per share and Adjusted EBITDA do not reflect certain tax payments that represent reductions in cash available to us;

•

Adjusted Earnings (Loss), Adjusted Earnings per share and Adjusted EBITDA do not reflect any cash requirements for the assets being depreciated and amortized that may have to be replaced in the future;

•

Adjusted Earnings (Loss), Adjusted Earnings per share and Adjusted EBITDA do not reflect non-cash compensation which is and will remain a key element of our overall long-term incentive compensation package;

•

Adjusted Earnings (Loss), Adjusted Earnings per share and Adjusted EBITDA do not reflect the change in fair value due to changes in valuation inputs and other assumptions;

•

Adjusted EBITDA does not reflect the change in fair value resulting from the realization of expected cash flows; and

•

Adjusted EBITDA does not reflect the significant interest expense or the cash requirements necessary to service interest or principal payments on our servicing rights related liabilities and corporate debt, although it does reflect interest expense associated with our servicing advance liabilities, master repurchase agreements, mortgage-backed debt, and HMBS related obligations.

Because of these limitations, Adjusted Earnings (Loss), Adjusted Earnings per share 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), Adjusted Earnings per share and Adjusted EBITDA only as supplements. Users of our financial statements are cautioned not to place undue reliance on Adjusted Earnings (Loss), Adjusted Earnings per share and Adjusted EBITDA.

Walter Investment Management Corp.

Segment Results of Operations and Non-GAAP Financial Measures

For the Three Months Ended September 30, 2016

(in thousands)


	Servicing			Originations			Reverse Mortgage			Other			Eliminations			Total Consolidated
REVENUES:
Servicing revenue and fees	$	107,473		$	—		$	7,155		$	—		$	(2,999	)	$	111,629
Gain on loan sales, net		(2,271	)		123,285			—			—			1,000			122,014
Interest income on loans		11,320			12			—			—			—			11,332
Insurance revenue		10,000			—			—			—			—			10,000
Net fair value gains on reverse loans and related HMBS obligations		—			—			18,627			—			—			18,627
Other income		22,351			10,143			1,241			(194	)		(9,813	)		23,728

Total revenues		148,873			133,440			27,023			(194	)		(11,812	)		297,330

EXPENSES:
Interest expense		16,657			8,718			2,941			36,986			—			65,302
Depreciation and amortization		12,322			2,341			1,917			—			—			16,580
Goodwill and intangible assets impairment		90,981			—			6,735			—			—			97,716
Other expenses, net		189,700			70,709			38,453			(853	)		(11,812	)		286,197

Total expenses		309,660			81,768			50,046			36,133			(11,812	)		465,795

OTHER GAINS (LOSSES)
Gain (loss) on extinguishment of debt		—			—			—			13,734			—			13,734
Net fair value gains (losses)		(644	)		—			—			(2,658	)		—			(3,302	)
Other		(150	)		—			—			—			—			(150	)

Total other gains (losses)		(794	)		—			—			11,076			—			10,282

Income (loss) before income taxes		(161,581	)		51,672			(23,023	)		(25,251	)		—			(158,183	)
ADJUSTED EARNINGS (LOSS)
Goodwill and intangible assets impairment		90,981			—			6,735			—			—			97,716
Changes in fair value due to changes in valuation inputs and other assumptions		26,672			—			—			—			—			26,672
Step-up depreciation and amortization		6,632			156			966			—			—			7,754
Step-up amortization of sub-servicing rights		4,335			—			—			—			—			4,335
Non-cash interest expense		829			—			—			2,835			—			3,664
Share-based compensation expense		1,178			357			157			259			—			1,951
Fair value to cash adjustment for reverse loans		—			—			690			—			—			690
Restructuring and exit costs		1,396			(16	)		160			1,102			—			2,642
Other⁽¹⁾		11,842			3,488			1,961			(14,666	)		—			2,625

Total adjustments		143,865			3,985			10,669			(10,470	)		—			148,049

Adjusted Earnings (Loss)		(17,716	)		55,657			(12,354	)		(35,721	)		—			(10,134	)
ADJUSTED EBITDA
Amortization of servicing rights and other fair value adjustments		61,170			—			432			—			—			61,602
Interest expense on debt		1,518			—			—			34,152			—			35,670
Depreciation and amortization		5,690			2,185			951			—			—			8,826
Other⁽²⁾		(2,215	)		119			32			(146	)		—			(2,210	)

Total adjustments		66,163			2,304			1,415			34,006			—			103,888

Adjusted EBITDA	$	48,447		$	57,961		$	(10,939	)	$	(1,715	)	$	—		$	93,754

⁽¹⁾

Includes the net provision for the repurchase of loans sold, non-cash interest income, severance, gain 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.

⁽²⁾	Includes severance, gain on extinguishment of debt, the net impact of the Non-Residual Trusts; transaction and integration costs; and certain non-recurring costs.

Walter Investment Management Corp.

Segment Results of Operations and Non-GAAP Financial Measures

For the Three Months Ended September 30, 2015

(in thousands)


	Servicing			Originations		Reverse Mortgage			Other			Eliminations			Total Consolidated
REVENUES:
Servicing revenue and fees	$	(9,859	)	$	—	$	11,247		$	—		$	(3,159	)	$	(1,771	)
Gain on loan sales, net		(2,286	)		117,580		—			—			924			116,218
Interest income on loans		12,397			13		—			—			—			12,410
Insurance revenue		8,763			—					—			—			8,763
Net fair value gains on reverse loans and related HMBS obligations		—			—		52,644			—			—			52,644
Other income		22,171			14,433		1,504			739			(7,718	)		31,129

Total revenues		31,186			132,026		65,395			739			(9,953	)		219,393

EXPENSES:
Interest expense		17,303			10,211		843			38,371			—			66,728
Depreciation and amortization		11,437			7,204		2,001			4			—			20,646
Other expenses, net		163,992			78,093		40,008			4,610			(9,953	)		276,750

Total expenses		192,732			95,508		42,852			42,985			(9,953	)		364,124

OTHER GAINS (LOSSES)
Net fair value gains (losses)		(213	)		—		—			1,332			—			1,119
Other		8,937			—		—			3,117			—			12,054

Total other gains (losses)		8,724			—		—			4,449			—			13,173

Income (loss) before income taxes		(152,822	)		36,518		22,543			(37,797	)		—			(131,558	)
ADJUSTED EARNINGS (LOSS)
Changes in fair value due to changes in valuation inputs and other assumptions		147,900			—		—			—			—			147,900
Step-up depreciation and amortization		6,945			5,068		1,329			—			—			13,342
Step-up amortization of sub-servicing contracts		4,737			—		—			—			—			4,737
Non-cash interest expense		375			—		—			2,759			—			3,134
Share-based compensation expense		3,346			1,487		929			154			—			5,916
Fair value to cash adjustments for reverse loans		—			—		(27,441	)		—			—			(27,441	)
Curtailment expense		—			—		450			—			—			450
Legal and regulatory matters		—			—		2,158			—			—			2,158
Restructuring and exit costs		3,756			664		973			127			—			5,520
Other⁽¹⁾		335			137		26			2,188			—			2,686

Total adjustments		167,394			7,356		(21,576	)		5,228			—			158,402

Adjusted Earnings (Loss)		14,572			43,874		967			(32,569	)		—			26,844
ADJUSTED EBITDA
Amortization of servicing rights and other fair value adjustments		68,098			—		499			—			—			68,597
Interest expense on debt		2,270			—		1			35,612			—			37,883
Depreciation and amortization		4,492			2,136		672			4			—			7,304
Other⁽²⁾		(232	)		4,950		76			22			—			4,816

Total adjustments		74,628			7,086		1,248			35,638			—			118,600

Adjusted EBITDA	$	89,200		$	50,960	$	2,215		$	3,069		$	—		$	145,444

⁽¹⁾

⁽²⁾	Includes severance, gain on extinguishment of debt, the net impact of the Non-Residual Trusts; transaction and integration costs; and certain non-recurring costs.

Walter Investment Management Corp.

Segment Results of Operations and Non-GAAP Financial Measures

For the Nine Months Ended September 30, 2016

(in thousands)


	Servicing			Originations			Reverse Mortgage			Other			Eliminations			Total Consolidated
REVENUES:
Servicing revenue and fees	$	25,954		$	—		$	21,065		$	—		$	(9,216	)	$	37,803
Gain on loan sales, net		(7,998	)		311,625			—			—			3,040			306,667
Interest income on loans		35,315			37			—			—			—			35,352
Insurance revenue		31,644			—			—			—			—			31,644
Net fair value gains on reverse loans and related HMBS obligations		—			—			61,485			—			—			61,485
Other income		73,516			32,264			4,705			(119	)		(31,743	)		78,623

Total revenues		158,431			343,926			87,255			(119	)		(37,919	)		551,574

EXPENSES:
Interest expense		53,549			24,729			6,870			108,802			—			193,950
Depreciation and amortization		33,807			6,934			4,792			10			—			45,543
Goodwill and intangible assets impairment		306,393			—			6,735			—			—			313,128
Other expenses, net		537,510			198,575			112,774			11,362			(37,919	)		822,302

Total expenses		931,259			230,238			131,171			120,174			(37,919	)		1,374,923

OTHER GAINS (LOSSES)
Gain (loss) on extinguishment of debt		—			—			—			14,662			—			14,662
Net fair value gains (losses)		(418	)		—			—			(5,847	)		—			(6,265	)
Other		(682	)		—			(1,024	)		—			—			(1,706	)

Total other gains (losses)		(1,100	)		—			(1,024	)		8,815			—			6,691

Income (loss) before income taxes		(773,928	)		113,688			(44,940	)		(111,478	)		—			(816,658	)
ADJUSTED EARNINGS (LOSS)
Goodwill and intangible assets impairment		306,393			—			6,735			—			—			313,128
Changes in fair value due to changes in valuation inputs and other assumptions		385,826			—			—			—			—			385,826
Step-up depreciation and amortization		19,967			608			2,755			—			—			23,330
Step-up amortization of sub-servicing rights		8,313			—			—			—			—			8,313
Non-cash interest expense		818			—			—			8,642			—			9,460
Share-based compensation expense		5,119			590			1,080			867			—			7,656
Fair value to cash adjustment for reverse loans		—			—			(2,507	)		—			—			(2,507	)
Legal and regulatory matters		2,196			—			—			—			—			2,196
Restructuring and exit costs		7,403			2,083			567			1,329			—			11,382
Other⁽¹⁾		18,215			5,003			4,407			(4,670	)		—			22,955

Total adjustments		754,250			8,284			13,037			6,168			—			781,739

Adjusted Earnings (Loss)		(19,678	)		121,972			(31,903	)		(105,310	)		—			(34,919	)
ADJUSTED EBITDA
Amortization of servicing rights and other fair value adjustments		191,422			—			1,338			—			—			192,760
Interest expense on debt		5,504			—			—			100,161			—			105,665
Depreciation and amortization		13,840			6,326			2,037			10			—			22,213
Other⁽²⁾		(3,317	)		(3,093	)		86			201			—			(6,123	)

Total adjustments		207,449			3,233			3,461			100,372			—			314,515

Adjusted EBITDA	$	187,771		$	125,205		$	(28,442	)	$	(4,938	)	$	—		$	279,596

⁽¹⁾

⁽²⁾	Includes severance, gain on extinguishment of debt, the net impact of the Non-Residual Trusts; transaction and integration costs; and certain non-recurring costs.

Walter Investment Management Corp.

Segment Results of Operations and Non-GAAP Financial Measures

For the Nine Months Ended September 30, 2015

(in thousands)


	Servicing			Originations		Reverse Mortgage			Other			Eliminations			Total Consolidated
REVENUES:
Servicing revenue and fees	$	286,405		$	—	$	34,568		$	—		$	(7,942	)	$	313,031
Gain on loan sales, net		1,418			358,600		(98	)		—			924			360,844
Interest income on loans		62,487			50		—			—			—			62,537
Insurance revenue		34,323			—		—			—			—			34,323
Net fair value gains on reverse loans and related HMBS obligations		—			—		90,233			—			—			90,233
Other income		64,512			32,378		4,791			4,886			(24,852	)		81,715

Total revenues		449,145			391,028		129,494			4,886			(31,870	)		942,683

EXPENSES:
Interest expense		67,062			27,958		3,074			112,170			—			210,264
Depreciation and amortization		34,322			13,083		5,955			11			—			53,371
Goodwill impairment		—			—		56,539			—			—			56,539
Other expenses, net		474,548			238,706		145,800			16,146			(31,870	)		843,330

Total expenses		575,932			279,747		211,368			128,327			(31,870	)		1,163,504

OTHER GAINS (LOSSES)
Net fair value gains (losses)		(545	)		—		—			4,118			—			3,573
Other		6,134			—		—			14,879			—			21,013

Total other gains (losses)		5,589			—		—			18,997			—			24,586

Income (loss) before income taxes		(121,198	)		111,281		(81,874	)		(104,444	)		—			(196,235	)
ADJUSTED EARNINGS (LOSS)
Goodwill impairment		—			—		56,539			—			—			56,539
Changes in fair value due to changes in valuation inputs and other assumptions		157,312			—		—			—			—			157,312
Step-up depreciation and amortization		20,912			6,856		3,985			—			—			31,753
Step-up amortization of sub-servicing contracts		14,564			—		—			—			—			14,564
Non-cash interest expense		1,493			—		—			7,983			—			9,476
Share-based compensation expense		8,474			3,737		1,749			385			—			14,345
Fair value to cash adjustments for reverse loans		—			—		(7,647	)		—			—			(7,647	)
Curtailment expense		—			—		23,012			—			—			23,012
Legal and regulatory matters		2,218			—		5,020			—			—			7,238
Restructuring and exit costs		5,739			985		973			851			—			8,548
Other⁽¹⁾		1,583			559		456			6,470			—			9,068

Total adjustments		212,295			12,137		84,087			15,689			—			324,208

Adjusted Earnings (Loss)		91,097			123,418		2,213			(88,755	)		—			127,973
ADJUSTED EBITDA
Amortization of servicing rights and other fair value adjustments		184,019			—		1,576			—			—			185,595
Interest expense on debt		6,987			—		2			104,187			—			111,176
Depreciation and amortization		13,410			6,227		1,970			11			—			21,618
Other⁽²⁾		(5,640	)		7,493		175			109			—			2,137

Total adjustments		198,776			13,720		3,723			104,307			—			320,526

Adjusted EBITDA	$	289,873		$	137,138	$	5,936		$	15,552		$	—		$	448,499

⁽¹⁾

⁽²⁾	Includes severance, gain on extinguishment of debt, the net impact of the Non-Residual Trusts; transaction and integration costs; and certain non-recurring costs.

Reconciliation of GAAP Net Loss to

Non-GAAP AEBITDA

(in millions)


	For the Three Months Ended						For the Nine Months Ended
	September 30, 2016			September 30, 2015			September 30, 2016			September 30, 2015
Net loss	$	(101.8	)	$	(76.9	)	$	(506.9	)	$	(146.0	)
Adjust for: income tax expense (benefit)		(56.4	)		(54.7	)		(309.7	)		(50.2	)

Loss before income taxes		(158.2	)		(131.6	)		(816.6	)		(196.2	)
Add/(Subtract):
Goodwill and intangible assets impairment		97.7			—			313.1			56.5
Amortization of servicing rights and other fair value adjustments		92.6			221.2			586.9			357.5
Interest expense		39.3			41.0			115.1			120.7
Depreciation and amortization		16.6			20.6			45.5			53.4
Legal and regulatory matters		—			2.2			2.2			7.2
Curtailment expense		—			0.5			—			23.0
Share-based compensation expense		2.0			5.9			7.7			14.3
Fair value to cash adjustment for reverse loans		0.7			(27.4	)		(2.5	)		(7.6	)
Restructuring and exit costs		2.6			5.5			11.4			8.5
Other⁽¹⁾		0.4			7.5			16.8			11.2

Sub-total		251.9			277.0			1,096.2			644.7

Adjusted EBITDA	$	93.7		$	145.4		$	279.6		$	448.5

⁽¹⁾

Reconciliation of GAAP Net Loss to

Non-GAAP Adjusted Earnings (Loss)

(in millions, except per share amounts)


	For the Three Months Ended						For the Nine Months Ended
	September 30, 2016			September 30, 2015			September 30, 2016			September 30, 2015
Net loss	$	(101.8	)	$	(76.9	)	$	(506.9	)	$	(146.0	)
Adjust for: income tax expense (benefit)		(56.4	)		(54.7	)		(309.7	)		(50.2	)

Loss before income taxes		(158.2	)		(131.6	)		(816.6	)		(196.2	)
Add/(Subtract):
Goodwill and intangible assets impairment		97.7			—			313.1			56.5
Changes in fair value due to changes in valuation inputs and other assumptions		26.7			147.9			385.8			157.3
Legal and regulatory matters		—			2.2			2.2			7.2
Curtailment expense		—			0.5			—			23.0
Step-up depreciation and amortization		7.8			13.3			23.3			31.8
Step-up amortization of sub-servicing rights		4.3			4.7			8.3			14.6
Share-based compensation expense		2.0			5.9			7.7			14.3
Non-cash interest expense		3.7			3.1			9.5			9.5
Fair value to cash adjustment for reverse loans		0.7			(27.4	)		(2.5	)		(7.6	)
Restructuring and exit costs		2.6			5.5			11.4			8.5
Other⁽¹⁾		2.6			2.7			22.9			9.1

Adjusted Earnings (Loss)	$	(10.1	)	$	26.8		$	(34.9	)	$	128.0
Tax expense (benefit) at estimated effective tax rate of 38%		(3.8	)		10.2			(13.3	)		48.7

Adjusted Earnings (Loss) after tax	$	(6.3	)	$	16.6		$	(21.6	)	$	79.3

Adjusted Earnings (Loss) after taxes per common and common equivalent share	$	(0.17	)	$	0.44		$	(0.60	)	$	2.10
Weighted-average common and common equivalent shares outstanding — basic and diluted		36.1			37.8			35.8			37.8

⁽¹⁾	Includes severance, gain on extinguishment of debt, the net impact of the Non-Residual Trusts; transaction and integration costs; and certain non-recurring costs.

Third Quarter 2016 Earnings Presentation November 9, 2016 Exhibit 99.2

GAAP net loss of $101.8 MN, ($2.82) per share, including $77.6 MN, ($2.15) per share, after-tax(1) non-cash charges: $60.6 MN goodwill and intangible assets impairments $17.0 MN fair value charges due to changes in valuation inputs and other assumptions Adjusted Loss of ($6.3) MN after tax, ($0.17) per share AEBITDA of $93.8 MN Book Value per share of $8.36(2) Q3 2016 Financial Results (1) Reflected net of tax using the Company's estimated effective tax rate of 38%. (2) Calculated by dividing total stockholder's equity by the total number of outstanding shares as of September 30, 2016

3 Focus Areas Focus remains the same with strong emphasis on performance and compliance 1 3 Capital Efficiency New Leadership and Engaged Workforce Process Efficiency 2

Business Model 3-Pillared approach provides basis for future sustainable growth and consistent profitability, driving value for stakeholders Optimizing customer service improves process efficiencies and growth opportunities Continue to enhance business model with an emphasis on performance and compliance Originations: Drive efficient and effective use of distribution channels Consumer Lending Broker / Wholesale Correspondent Lending Servicing: Increase scale and sub-servicing capabilities

New Leadership and Engaged Workforce Restructured leadership team Enriched talent and experience in critical areas through addition of new leadership Flattened, more simple management structure focused on leveraging best practices and synergies Drives culture of accountability, execution and performance Additional focus on training and development across lending and servicing operations Simplified structure to drive the company forward through improved communication, accountability and team work

Capital Efficiency Update Closed and pending MSR sales to New Residential Mortgage LLC ("NRM") expected to generate ~$215 MN proceeds in the near term(1) Repurchased $47.5 MN principal balance of Convertible Notes during Q3 for $24.8 MN Negotiating documents for WCO asset sale and related transactions(2) Engaged advisors to assist in exploring certain opportunities with respect to our corporate debt Management still evaluating options for sale of Insurance business and Reverse Mortgage balance sheet Solid steps made during the quarter towards improving capital structure (1) Pending transaction remains subject to GSE approval and other conditions to closing. (2) Transactions subject to negotiation, finalization and execution of transaction documents and, thereafter, GSE approval and other conditions to closing, as applicable.

Servicing Operations Optimizing use of servicing and operations platforms Leveraging automation and assessing the use of robotic technology Originations Operations High performance loan officer program Implementation of Lean process improvement tactics expected to reduce consumer lending cycle times Corporate Collapsing corporate infrastructure to streamline and simplify Focusing on the Fundamentals Organization progressing on process efficiency efforts to simplify, improve performance and gain efficiencies

GAAP net loss of $101.8 MN, or ($2.82) per share after tax Non-cash charges of $27.4 MN ($17.0 MN or ($0.47) per share after tax(1)) resulting from changes in valuation inputs and other assumptions Goodwill and intangible assets impairments of $97.7 MN ($60.6 MN or ($1.68) per share after tax(1)) $14.5 million gain on debt extinguishment recognized associated with the repurchase of $47.5 MN principal balance of Convertible Notes Q3 2016 Consolidated Results Q3 2016 RESULTS GAAP Net Loss of $101.8 MN, or ($2.82) per share Adjusted Loss of ($6.3) MN after tax, or ($0.17) per share AEBITDA of $93.8 MN (1) After tax amounts determined using 38% estimated effective tax rate.

Q3 2016 Servicing Results Closed previously announced ~$32 BN UPB MSR sale to NRM on October 3 (sub-servicing retained) Agreed in October to sell additional $5.0 BN UPB of MSR to NRM (sub-servicing retained)(1) Walter, WCO and NRM negotiating transaction documents relating to a sale of substantially all of WCO's assets to NRM(2) Sale by Walter of ~$24 BN UPB base MSR related to WCO excess servicing spread assets Ditech expects to sub-service MSRs sold by WCO to NRM Ending UPB of $235.0 BN at September 30, 2016; 8 bps of AEBITDA margin Target Update(3): AEBITDA and Adjusted Earnings margins to be below previously provided ranges of 11 - 15 bps and 3 - 5 bps, respectively RESULTS GAAP pre-tax loss of $161.6 MN Adjusted Loss of $17.7 MN AEBITDA of $48.4 MN (1) Transaction subject to GSE approval and other conditions to closing. (2) Transactions subject to negotiation, finalization and execution of transaction documents and, thereafter, GSE approval and other conditions to closing, as applicable. (3) Updates are in reference to the targets provided in the Q4 2015 earnings presentation.

Q3 2016 Originations Results RESULTS Funded $5.3 BN during the quarter, approximately 69% driven by the correspondent channel Quarter performance reflects strong margins and channel mix shift Total direct margins of 109 bps in Q3 2016, 3 bps higher than Q3 2015 Re-entered wholesale channel in Q3 2016, expanding non-HARP customer base Recapture rate of 16% for Q3 2016; originated approximately 6,900 HARP loans GAAP pre-tax income of $51.7 MN Adjusted Earnings of $55.7 MN AEBITDA of $58.0 MN

Q3 2016 Reverse Mortgage Results RESULTS Issued $245.6 MN of securitizations Unfunded IDL tails at September 30, 2016: $628 MN eligible for draw immediately; $189 MN scheduled to become eligible for draw over next 12 months(1) Servicing performance continues to be negatively impacted by the high default rate of pre-IDL product causing elevated servicing costs In preliminary stages of evaluating balance sheet opportunities (1) Assumes the loans remain performing. GAAP pre-tax loss of $23.0 MN Adjusted Loss of $12.4 MN AEBITDA of ($10.9) MN

Transition to fee-for-service model Opportunities with NRM continue Pursuing additional flow and sub-servicing opportunities GTAAFT facility notes issuance Extended maturity Reduced interest margins Corporate debt and leverage Engaged advisors to assist in exploring certain opportunities with respect to our corporate debt Target update: unlikely to achieve previously provided year-end 2016 target leverage ratio(1) by year end Capital and Liquidity Position (1) Update is in reference to the target provided in the Q4 2015 earnings presentation.

Appendix: Supplemental Information & Reconciliations

Use of Non-GAAP Measures and Definitions Generally Accepted Accounting Principles ("GAAP") is the term used to refer to the standard framework of guidelines for financial accounting. GAAP includes the standards, conventions, and rules accountants follow in recording and summarizing transactions and in the preparation of financial statements. In addition to reporting financial results in accordance with GAAP, the Company has provided the following non-GAAP financial measures in this presentation: Adjusted Earnings (Loss), Adjusted Earnings per share, Adjusted EBITDA and Funds Generated in Period. See the definitions below for a description of how these items are presented and see the Non-GAAP Reconciliations for a reconciliation of these measures to the most directly comparable GAAP financial measures. Management considers Adjusted Earnings (Loss), Adjusted Earnings per share, Adjusted EBITDA and Funds Generated in Period, each of which is a non-GAAP financial measure, 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), Adjusted Earnings per share, Adjusted EBITDA and Funds Generated in Period 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), Adjusted Earnings per share, Adjusted EBITDA and Funds Generated in Period are not presentations made in accordance with GAAP and our use of these measures and terms may vary from other companies in our industry. These non-GAAP financial measures should not be considered as alternatives to (1) net income (loss) or any other performance measures determined in accordance with GAAP or (2) operating cash flows determined in accordance with GAAP. These measures have important limitations as analytical tools, and should not be considered in isolation or as substitutes for analysis of the Company’s results as reported under GAAP. Because of these limitations, these measures 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), Adjusted Earnings per share and Adjusted EBITDA only as supplements. Users of our financial statements are cautioned not to place undue reliance on Adjusted Earnings (Loss), Adjusted Earnings per share and Adjusted EBITDA. Adjusted Earnings (Loss) and Adjusted Earnings per share is defined as net income (loss) with respect to the consolidated entity and income (loss) before income taxes at the segment level, plus: changes in fair value due to changes in valuation inputs and other assumptions; certain depreciation and amortization costs related to the increased basis in assets (including servicing rights and sub-servicing contracts) acquired within business combination transactions (or step-up depreciation and amortization); goodwill and intangible assets impairment, if any; a portion of the provision for curtailment expense, net of expected third-party recoveries; share-based compensation expense; non-cash interest expense; restructuring 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. Adjusted Earnings (Loss) and Adjusted Earnings per share exclude unrealized changes in fair value of MSRs that are based on projections of expected future cash flows and prepayments. Adjusted Earnings (Loss) and Adjusted Earnings per share include 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) and Adjusted Earnings per share include cash generated from reverse mortgage origination activities. Adjusted Earnings (Loss) and Adjusted Earnings per share 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. Adjusted EBITDA eliminates the effects of financing, income taxes and depreciation and amortization. Adjusted EBITDA is defined as net income (loss) with respect to the consolidated entity and income (loss) before income taxes at the segment level, 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; share-based compensation expense; restructuring 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 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. 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. 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. Funds Generated in Period is calculated as Adjusted EBITDA, as described above, less capital expenditures, cash paid for corporate debt interest expense and income taxes. Management believes Funds Generated in Period is useful as a supplemental indicator of the cash capable of being generated by the business during the relevant period and for that purpose considers the values of the OMSRs created during the period as equivalent to cash on the assumption that such OMSRs could have been sold during the period for cash equivalent to their fair value reflected in our books. There can be no assurance that the OMSRs could have been sold during the period for cash equivalent to their fair value reflected in our books. Funds Generated in Period does not represent cash flow or cash available for investment. Amounts or metrics that relate to future earnings projections are forward-looking and subject to significant business, economic, regulatory and competitive uncertainties, many of which are beyond the control of Walter Investment and its management, and are based upon assumptions with respect to future decisions, which are subject to change. Actual results will vary and those variations may be material. Nothing in this presentation should be regarded as a representation by any person that any target will be achieved and the Company undertakes no duty to update any target. Please refer to the introductory slides of this presentation, as well as additional disclosures in this Appendix and in our Annual Report on Form 10-K for the year ended December 31, 2015 and our other filings with the SEC, for important information regarding forward looking statements and the use and limitations of non-GAAP financial measures. Because we do not predict certain items that might occur in the future such as changes in fair value, and our outlook is developed at a level of detail different than that used to prepare GAAP financial measures, we are not providing a reconciliation to GAAP of any forward-looking financial measures presented herein.

Forward-Looking Statements Certain statements in this presentation constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended. 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,” "seek," "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. 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" in our Annual Report on Form 10-K for the year ended December 31, 2015 and in our Quarterly Reports on Form 10-Q for the periods ended March 31, 2016, June 30, 2016 and September 30, 2016 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: our ability to operate our business in compliance with existing and future laws, rules, regulations and contractual commitments affecting our business, including those relating to the origination and servicing of residential loans, the management of third-party assets and the insurance industry (including lender-placed insurance), and changes to, and/or more stringent enforcement of, such laws, rules, regulations and contracts; increased scrutiny and potential enforcement actions by federal and state authorities; the substantial resources (including senior management time and attention) we devote to, and the significant compliance costs we incur in connection with, regulatory compliance and regulatory examinations and inquiries, and any consumer redress, fines, penalties or similar payments we make in connection with resolving such matters; uncertainties relating to interest curtailment obligations and any related financial and litigation exposure (including exposure relating to false claims); potential costs and uncertainties, including the effect on future revenues, associated with and arising from litigation, regulatory investigations and other legal proceedings; our dependence on U.S. government-sponsored entities (especially Fannie Mae) and agencies and their residential loan programs and our ability to maintain relationships with, and remain qualified to participate in programs sponsored by, such entities, our ability to satisfy various existing or future GSE, agency and other capital, net worth, liquidity and other financial requirements applicable to our business, and our ability to remain qualified as a GSE approved seller, servicer or component servicer, including the ability to continue to comply with the GSEs’ respective residential loan and selling and servicing guides; uncertainties relating to the status and future role of GSEs, and the effects of any changes to the origination and/or servicing requirements of the GSEs or various regulatory authorities or the servicing compensation structure for mortgage servicers pursuant to programs of GSEs or various regulatory authorities; our ability to maintain our loan servicing, loan origination, insurance agency or collection agency licenses, or any other licenses necessary to operate our businesses, or changes to, or our ability to comply with, our licensing requirements; our ability to comply with the terms of the stipulated order resolving allegations arising from an FTC and CFPB investigation of Ditech Financial; operational risks inherent in the mortgage servicing and mortgage origination businesses, including our ability to comply with the various contracts to which we are a party, and reputational risks; risks related to the significant amount of senior management turnover recently experienced by the Company; risks related to our substantial levels of indebtedness, including our ability to comply with covenants contained in our debt agreements or obtain any necessary waivers or amendments, generate sufficient cash to service such indebtedness and refinance such indebtedness on favorable terms, as well as our ability to incur substantially more debt; our ability to renew advance facilities or warehouse facilities and maintain adequate borrowing capacity under such facilities; our ability to maintain or grow our servicing business and our residential loan originations business; our ability to achieve our strategic initiatives, particularly our ability to: execute and complete balance sheet management activities; execute and realize planned operational improvements and efficiencies; make arrangements with potential capital partners; complete sales of assets to, and enter into other arrangements with, third parties; increase the mix of our fee-for-service business; reduce our debt; and develop new business, including acquisitions of MSRs or entering into new subservicing arrangements; uncertainties relating to the potential sale of substantially all of our insurance business; changes in prepayment rates and delinquency rates on the loans we service or sub-service; the ability of our clients and credit owners to transfer or otherwise terminate our servicing or sub-servicing rights;

Forward-Looking Statements a downgrade of, or other adverse change relating to, our servicer ratings or credit ratings; our ability to collect reimbursements for servicing advances and earn and timely receive incentive payments and ancillary fees on our servicing portfolio; our ability to collect indemnification payments and enforce repurchase obligations relating to mortgage loans we purchase from our correspondent clients and our ability to collect in a timely manner indemnification payments relating to servicing rights we purchase from prior servicers; local, regional, national and global economic trends and developments in general, and local, regional and national real estate and residential mortgage market trends in particular, including the volume and pricing of home sales and uncertainty regarding the levels of mortgage originations and prepayments; uncertainty as to the volume of originations activity we will benefit from prior to, and following, the expiration of HARP, which is scheduled to occur on September 30, 2017, including uncertainty as to the number of "in-the-money" accounts we may be able to refinance; risks associated with the origination, securitization and servicing of reverse mortgages, including changes to reverse mortgage programs operated by FHA, HUD or Ginnie Mae, our ability to accurately estimate interest curtailment liabilities, continued demand for HECM loans and other reverse mortgages, our ability to fund HECM repurchase obligations, our ability to fund principal additions on our HECM loans, and our ability to securitize our HECM loans and tails; our ability to realize all anticipated benefits of past, pending or potential future acquisitions or joint venture investments; the effects of competition on our existing and potential future business, including the impact of competitors with greater financial resources and broader scopes of operation; changes in interest rates and the effectiveness of any hedge we may employ against such changes; risks and potential costs associated with technology and cybersecurity, including: the risks of technology failures and of cyber-attacks against us or our vendors; our ability to adequately respond to actual or alleged cyber-attacks; and our ability to implement adequate internal security measures and protect confidential borrower information; risks and potential costs associated with the implementation of new or more current technology such as MSP, the use of vendors (including offshore vendors) or the transfer of our servers or other infrastructure to new data center facilities; our ability to comply with evolving and complex accounting rules, many of which involve significant judgment and assumptions; the risk that we could have an "ownership change" under Section 382 of the Internal Revenue Code of 1986, as amended, that could limit our ability to use tax losses to offset future taxable income; uncertainties regarding impairment charges relating to our goodwill or other intangible assets; our ability to maintain effective internal controls over financial reporting and disclosure controls and procedures; our ability to manage conflicts of interest relating to our investment in WCO and maintain our relationship with WCO; and risks related to our relationship with Walter Energy and uncertainties arising from or relating to its bankruptcy filings, including potential liability for any taxes, interest and/or penalties owed by the Walter Energy consolidated group for the full or partial tax years during which certain of the Company's former subsidiaries were part of such consolidated group and certain other tax risks allocated to us in connection with our spin-off from Walter Energy. 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 presentation 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.

Servicing Segment (1) Represents the realization of cash flows (or amortization) of the MSRs accounted for at fair value. Amortization continues to be higher than anticipated as a result of the continued low interest rate environment. (2) The quarterly portfolio disappearance rate is the weighted average of the disappearance rate for each month in such quarter. The monthly disappearance rate is the annualized exponential rate of dividing the aggregate dollar amount of contractual payments, voluntary prepayments and defaults attributable to mortgage loans in the mortgage loan servicing portfolio during such month by the sum of the unpaid principal balance of the loans in the mortgage loan servicing portfolio at the beginning of such month plus the unpaid principal balance of any mortgage loans added to such portfolio during such month. $ in millions Servicing Key Metrics YTD 2016 YTD 2016 YTD 2015 YTD 2015 Q3 2016 Q3 2016 Q2 2016 Q2 2016 Q3 2015 Q3 2015 Servicing fees $ 523.2 $ 524.7 $ 171.2 $ 175.6 $ 178.7 Incentive and performance fees 47.8 71.0 14.7 15.7 19.4 Ancillary and other fees 71.4 69.8 22.8 24.5 22.7 Servicing revenue and fees $ 642.4 $ 665.5 $ 208.7 $ 215.8 $ 220.8 Amortization of servicing rights (11.7 ) (19.0 ) (5.3 ) (2.1 ) (6.2 ) Other changes in fair value of servicing rights(1) (188.0 ) (179.5 ) (60.1 ) (59.8 ) (66.7 ) Changes in valuation inputs of servicing rights (412.1 ) (173.5 ) (25.9 ) (127.7 ) (158.3 ) Changes in fair value of servicing rights related liabilities (4.7 ) (7.1 ) (9.9 ) 1.9 0.5 Net servicing revenue and fees $ 25.9 $ 286.4 $ 107.5 $ 28.1 $ (9.9 ) AEBITDA/average UPB 10 bps 16 bps 8 bps 10 bps 15 bps Adjusted Earnings/average UPB (1 ) bps 5 bps (3 ) bps — bps 2 bps Serviced UPB (in billions) $ 235.0 $ 245.6 $ 235.0 $ 248.6 $ 245.6 Serviced units (in millions) 2.0 2.1 2.0 2.1 2.1 Average UPB serviced (in billions) $ 248.6 $ 243.3 $ 241.5 $ 252.7 $ 245.5 Disappearance Rate(2) 15.4 % 14.6 % 17.7 % 15.6 % 14.4 %

Originations Segment $ in billions (2) Calculated on pull-through adjusted locked volume. (3) Calculated on funded volume. $ in thousands (1) Recapture rate represents the percent of voluntary UPB payoffs during the period refinanced in to new loans by Ditech. This metric excludes payoffs on non-marketable portfolios (e.g. sub-serviced), payoffs under $20K UPB, or payoffs prior to 60 days after boarding. Originations Data by Channel Consumer Lending Originations Economics Correspondent Lending Originations Economics Pull-Through Adjusted Locked Volume YTD 2016 YTD 2016 YTD 2015 YTD 2015 Q3 2016 Q3 2016 Q2 2016 Q2 2016 Q3 2015 Q3 2015 Consumer Lending $ 5.2 $ 5.6 $ 2.0 $ 1.7 $ 1.8 Correspondent Lending 10.5 14.0 3.8 3.6 4.5 $ 15.7 $ 19.6 $ 5.8 $ 5.3 $ 6.3 Funded Volume YTD 2016 YTD 2016 YTD 2015 YTD 2015 Q3 2016 Q3 2016 Q2 2016 Q2 2016 Q3 2015 Q3 2015 Consumer Lending $ 5.0 $ 5.7 $ 1.6 $ 1.6 $ 1.8 Correspondent Lending 10.0 13.9 3.7 3.2 5.1 $ 15.0 $ 19.6 $ 5.3 $ 4.8 $ 6.9 YTD 2016 YTD 2016 YTD 2015 YTD 2015 Q3 2016 Q3 2016 Q2 2016 Q2 2016 Q3 2015 Q3 2015 Recapture Rate(1) 20 % 25 % 16 % 18 % 22 % bps YTD 2016 YTD 2015 Q3 2016 Q2 2016 Q3 2015 Gain on Sale(2) 456 480 462 447 462 Fee Income(3) 42 29 40 41 46 Direct Expenses(3) (302 ) (285 ) (313 ) (293 ) (288 ) Direct Margin 196 224 189 195 220 bps YTD 2016 YTD 2015 Q3 2016 Q2 2016 Q3 2015 Gain on Sale(2) 71 65 83 71 75 Fee Income(3) 10 11 10 10 11 Direct Expenses(3) (40 ) (34 ) (40 ) (39 ) (34 ) Direct Margin 41 42 53 42 52 Consumer Lending Consumer Lending Correspondent Lending Correspondent Lending Total Total Funded Volume ($MNs) $ 1,616.5 $ 3,675.2 $ 5,291.7 Direct Expenses (bps) (313 ) (40 ) Direct Expenses ($MNs) $ 50.6 $ 14.7 $ 65.3 Indirect expenses (4) 14.2 Total expenses (excluding depreciation and amortization) $ 79.5 Q3 2016 Expense Detail (4) Includes support functions and corporate overhead allocations.

Reverse Mortgage Segment $ in millions (1) Representative of servicing fee for on-balance sheet residential loans serviced. (2) Cash generated by origination, purchase and securitization of HECM loans. (3) Funded volumes exclude funded tail volumes. Reverse Mortgage Key Metrics YTD 2016 YTD 2016 YTD 2015 YTD 2015 Q3 2016 Q3 2016 Q2 2016 Q2 2016 Q3 2015 Q3 2015 Interest income $ 337.1 $ 326.0 $ 112.8 $ 113.6 $ 110.3 Interest expense (309.5 ) (301.2 ) (102.9 ) (103.4 ) (102.1 ) Net interest margin(1) $ 27.6 $ 24.8 $ 9.9 $ 10.2 $ 8.2 Blended cash generated(2) 31.4 57.8 9.4 11.9 17.0 Fair value of loans and HMBS obligations 2.5 7.6 (0.7 ) (14.5 ) 27.4 Fair value $ 61.5 $ 90.2 $ 18.6 $ 7.6 $ 52.6 Net servicing revenues and fees 21.1 34.6 7.2 7.0 11.2 Other 4.7 4.7 1.2 1.5 1.6 Total revenue $ 87.3 $ 129.5 $ 27.0 $ 16.1 $ 65.4 Funded volume(3) $ 305 MN $ 891 MN $ 148 MN $ 87 MN $ 217 MN Securitized volume $ 622 MN $ 1,245 MN $ 246 MN $ 189 MN $ 390 MN Serviced UPB (in billions) $ 20.8 $ 19.8 $ 20.8 $ 20.5 $ 19.8 Serviced units 120,916 120,888 120,916 120,976 120,888 $ in millions

Securitized Reverse Mortgages and VIEs(1) $ in millions Reverse Mortgage - Securitized Portfolio Assets $ 10,639.4 Liabilities $ 10,699.7 $ (60.3 ) Residual Trusts Assets $ 498.6 Liabilities $ 442.9 $ 55.7 Non-Residual Trusts Assets $ 491.0 Liabilities $ 529.4 $ (38.4 ) Servicer and Protective Advance Financing Facilities Assets $ 996.7 Liabilities $ 867.9 $ 128.8 Ø Net fair value liability of $60.3 MN in securitized Reverse Mortgage portfolio Ø $55.7 MN of residual interest in legacy Walter Investment portfolio Ø Net fair value liability of $38.4 MN associated with mandatory clean-up call obligation in Non-Residual Trusts Ø $128.8 MN of equity in servicer advance trusts (1) Above presentation excludes impact of overall Walter tax positions. Net equity of $85.8 MN is embedded in securitized reverse mortgages and VIEs

Reconciliation of GAAP Net Loss to Non-GAAP Adjusted EBITDA $ in millions For the Three Months Ended For the Three Months Ended For the Nine Months Ended For the Nine Months Ended For the Three Months Ended For the Three Months Ended For the Nine Months Ended For the Nine Months Ended September 30, 2016 September 30, 2016 September 30, 2016 September 30, 2016 September 30, 2015 September 30, 2015 September 30, 2015 September 30, 2015 Net loss $ (101.8 ) $ (506.9 ) $ (76.9 ) $ (146.0 ) Adjust for: income tax expense (benefit) (56.4 ) (309.7 ) (54.7 ) (50.2 ) Loss before income taxes (158.2 ) (816.6 ) (131.6 ) (196.2 ) Add/(Subtract): Goodwill and intangible assets impairment 97.7 313.1 — 56.5 Amortization of servicing rights and other fair value adjustments 92.6 586.9 221.2 357.5 Interest expense 39.3 115.1 41.0 120.7 Depreciation and amortization 16.6 45.5 20.6 53.4 Share-based compensation expense 2.0 7.7 5.9 14.3 Fair value to cash adjustment for reverse loans 0.7 (2.5 ) (27.4 ) (7.6 ) Curtailment expense — — 0.5 23.0 Legal and regulatory matters — 2.2 2.2 7.2 Restructuring and exit costs 2.6 11.4 5.5 8.5 Other(1) 0.4 16.8 7.5 11.2 Sub-total 251.9 1,096.2 277.0 644.7 Adjusted EBITDA $ 93.7 $ 279.6 $ 145.4 $ 448.5 (1) Includes the net provision for the repurchase of loans sold, non-cash interest income, severance, gain 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.

Reconciliation of GAAP Net Loss to Non-GAAP Adjusted Earnings ($ in millions, except per share amounts) For the Three Months Ended For the Three Months Ended For the Nine Months Ended For the Nine Months Ended For the Three Months Ended For the Three Months Ended For the Nine Months Ended For the Nine Months Ended September 30, 2016 September 30, 2016 September 30, 2016 September 30, 2016 September 30, 2015 September 30, 2015 September 30, 2015 September 30, 2015 Net loss $ (101.8 ) $ (506.9 ) $ (76.9 ) $ (146.0 ) Adjust for: income tax expense (benefit) (56.4 ) (309.7 ) (54.7 ) (50.2 ) Loss before income taxes (158.2 ) (816.6 ) (131.6 ) (196.2 ) Add/(Subtract): Goodwill and intangible assets impairment 97.7 313.1 — 56.5 Changes in fair value due to changes in valuation inputs and other assumptions 26.7 385.8 147.9 157.3 Step-up depreciation and amortization 7.8 23.3 13.3 31.8 Step-up amortization of sub-servicing rights 4.3 8.3 4.7 14.6 Non-cash interest expense 3.7 9.5 3.1 9.5 Share-based compensation expense 2.0 7.7 5.9 14.3 Fair value to cash adjustment for reverse loans 0.7 (2.5 ) (27.4 ) (7.6 ) Curtailment expense — — 0.5 23.0 Legal and regulatory matters — 2.2 2.2 7.2 Restructuring and exit costs 2.6 11.4 5.5 8.5 Other(1) 2.6 22.9 2.7 9.1 Adjusted Earnings (Loss) $ (10.1 ) $ (34.9 ) $ 26.8 $ 128.0 Tax expense (benefit) at estimated effective tax rate of 38% (3.8 ) (13.3 ) 10.2 48.7 Adjusted Earnings (Loss) after tax $ (6.3 ) $ (21.6 ) $ 16.6 $ 79.3 Adjusted Earnings (Loss) after taxes per common and common equivalent share $ (0.17 ) $ (0.60 ) $ 0.44 $ 2.10 Weighted-average common and common equivalent shares outstanding — basic and diluted 36.1 35.8 37.8 37.8 (1) Includes severance, gain on extinguishment of debt, the net impact of the Non-Residual Trusts; transaction and integration costs; and certain non-recurring costs.

Planned Change to Non-GAAP Adjusted Earnings ($ in millions, except per share amounts) For the Three Months Ended For the Three Months Ended For the Nine Months Ended For the Nine Months Ended For the Three Months Ended For the Three Months Ended For the Nine Months Ended For the Nine Months Ended September 30, 2016 September 30, 2016 September 30, 2016 September 30, 2016 September 30, 2015 September 30, 2015 September 30, 2015 September 30, 2015 Adjusted Earnings (Loss) $ (10.1 ) $ (34.9 ) $ 26.8 $ 128.0 Subtract: Step-up depreciation and amortization 7.8 23.3 13.3 31.8 Step-up amortization of sub-servicing rights 4.3 8.3 4.7 14.6 Revised Non-GAAP Adjusted Earnings (Loss) $ (22.2 ) $ (66.5 ) $ 8.8 $ 81.6 Tax expense (benefit) at effective tax rate of 38% (8.4 ) (25.3 ) 3.3 31.0 Revised Non-GAAP Adjusted Earnings (Loss) after tax $ (13.8 ) $ (41.2 ) $ 5.5 $ 50.6 Revised Non-GAAP Adjusted Earnings (Loss) after taxes per common and common equivalent share $ (0.38 ) $ (1.15 ) $ 0.15 $ 1.34 Weighted-average common and common equivalent shares outstanding — basic and diluted 36.1 35.8 37.8 37.8 The Company intends to revise its method of calculating Adjusted Earnings (Loss) beginning in Q4 2016 The Company intends to revise its method of calculating Adjusted Earnings (Loss) beginning with its Form 10-K for the fiscal year ended December 31, 2016 (and related earnings materials) to eliminate adjustments for step-up depreciation and amortization, which represents depreciation and amortization costs related to the increased basis in assets (including servicing rights and sub-servicing contracts) acquired within business combination transactions.

Reconciliation of GAAP Income (Loss) Before Income Taxes to Non-GAAP Adjusted EBITDA by Segment ($ in millions) For the three months ended September 30, 2016 For the three months ended September 30, 2016 Servicing Servicing Originations Originations Reverse Mortgage Reverse Mortgage Other Other Total Consolidated Total Consolidated Income (loss) before income taxes $ (161.6 ) $ 51.7 $ (23.0 ) $ (25.3 ) $ (158.2 ) ADJUSTED EARNINGS (LOSS) Step-up depreciation and amortization 6.6 0.2 1.0 — 7.8 Step-up amortization of sub-servicing rights 4.3 — — — 4.3 Non-cash interest expense 0.8 — — 2.8 3.7 Share-based compensation expense 1.2 0.4 0.2 0.3 2.0 Fair value to cash adjustment for reverse loans — — 0.7 — 0.7 Changes in fair value due to changes in valuation inputs and other assumptions 26.7 — — — 26.7 Goodwill and intangible assets impairment 91.0 — 6.7 — 97.7 Legal and regulatory matters — — — — — Restructuring and exit costs 1.4 — 0.2 1.1 2.6 Other(1) 11.8 3.5 2.0 (14.7 ) 2.6 Total adjustments 143.9 4.0 10.7 (10.5 ) 148.0 Adjusted Earnings (Loss) (17.7 ) 55.7 (12.4 ) (35.7 ) (10.1 ) ADJUSTED EBITDA Depreciation and amortization 5.7 2.2 1.0 — 8.8 Amortization of servicing rights and other fair value adjustments 61.2 — 0.4 — 61.6 Interest expense on debt 1.5 — — 34.2 35.7 Other(2) (2.2 ) 0.1 — (0.1 ) (2.2 ) Total adjustments 66.2 2.3 1.4 34.0 103.9 Adjusted EBITDA $ 48.4 $ 58.0 $ (10.9 ) $ (1.7 ) $ 93.8 Please note that numbers may not foot due to rounding (1) Includes the net provision for the repurchase of loans sold, non-cash interest income, severance, gain 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. (2) Includes severance, gain on extinguishment of debt, the net impact of the Non-Residual Trusts; transaction and integration costs; and certain non-recurring costs.

Reconciliation of GAAP Income (Loss) Before Income Taxes to Non-GAAP Adjusted EBITDA by Segment ($ in millions) For the nine months ended September 30, 2016 For the nine months ended September 30, 2016 Servicing Servicing Originations Originations Reverse Mortgage Reverse Mortgage Other Other Total Consolidated Total Consolidated Income (loss) before income taxes $ (773.9 ) $ 113.7 $ (44.9 ) $ (111.5 ) $ (816.7 ) ADJUSTED EARNINGS (LOSS) Step-up depreciation and amortization 20.0 0.6 2.8 — 23.3 Step-up amortization of sub-servicing rights 8.3 — — — 8.3 Non-cash interest expense 0.8 — — 8.6 9.5 Share-based compensation expense 5.1 0.6 1.1 0.9 7.7 Fair value to cash adjustment for reverse loans — — (2.5 ) — (2.5 ) Changes in fair value due to changes in valuation inputs and other assumptions 385.8 — — — 385.8 Goodwill and intangible assets impairment 306.4 — 6.7 — 313.1 Legal and regulatory matters 2.2 — — — 2.2 Restructuring and exit costs 7.4 2.1 0.6 1.3 11.4 Other(1) 18.2 5.0 4.4 (4.7 ) 23.0 Total adjustments 754.3 8.3 13.0 6.2 781.7 Adjusted Earnings (Loss) (19.7 ) 122.0 (31.9 ) (105.3 ) (34.9 ) ADJUSTED EBITDA Depreciation and amortization 13.8 6.3 2.0 — 22.2 Amortization of servicing rights and other fair value adjustments 191.4 — 1.3 — 192.8 Interest expense on debt 5.5 — — 100.2 105.7 Other(2) (3.3 ) (3.1 ) 0.1 0.2 (6.1 ) Total adjustments 207.4 3.2 3.5 100.4 314.5 Adjusted EBITDA $ 187.8 $ 125.2 $ (28.4 ) $ (4.9 ) $ 279.6 Please note that numbers may not foot due to rounding (1) Includes the net provision for the repurchase of loans sold, non-cash interest income, severance, gain 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. (2) Includes severance, gain on extinguishment of debt, the net impact of the Non-Residual Trusts; transaction and integration costs; and certain non-recurring costs.

Reconciliation of GAAP Income (Loss) Before Income Taxes to Non-GAAP Adjusted EBITDA by Segment ($ in millions) For the three months ended September 30, 2015 For the three months ended September 30, 2015 Servicing Servicing Originations Originations Reverse Mortgage Reverse Mortgage Other Other Total Consolidated Total Consolidated Income (loss) before income taxes $ (152.8 ) $ 36.5 $ 22.5 $ (37.8 ) $ (131.6 ) ADJUSTED EARNINGS (LOSS) Step-up depreciation and amortization 6.9 5.1 1.3 — 13.3 Step-up amortization of sub-servicing contracts 4.7 — — — 4.7 Non-cash interest expense 0.4 — — 2.8 3.1 Share-based compensation expense 3.3 1.5 0.9 0.2 5.9 Fair value to cash adjustments for reverse loans — — (27.4 ) — (27.4 ) Changes in fair value due to changes in valuation inputs and other assumptions 147.9 — — — 147.9 Goodwill impairment — — — — — Curtailment expense — — 0.5 — 0.5 Legal and regulatory matters — — 2.2 — 2.2 Restructuring and exit costs 3.8 0.7 1.0 0.1 5.5 Other(1) 0.3 0.1 — 2.2 2.7 Total adjustments 167.4 7.4 (21.6 ) 5.2 158.4 Adjusted Earnings (Loss) 14.6 43.9 1.0 (32.6 ) 26.8 ADJUSTED EBITDA Depreciation and amortization 4.5 2.1 0.7 — 7.3 Amortization of servicing rights and other fair value adjustments 68.1 — 0.5 — 68.6 Interest expense on debt 2.3 — — 35.6 37.9 Other(2) (0.2 ) 5.0 0.1 — 4.8 Total adjustments 74.6 7.1 1.2 35.6 118.6 Adjusted EBITDA $ 89.2 $ 51.0 $ 2.2 $ 3.1 $ 145.4 Please note that numbers may not foot due to rounding (1) Includes the net provision for the repurchase of loans sold, non-cash interest income, severance, gain 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. (2) Includes severance, gain on extinguishment of debt, the net impact of the Non-Residual Trusts; transaction and integration costs; and certain non-recurring costs.

Reconciliation of GAAP Income (Loss) Before Income Taxes to Non-GAAP Adjusted EBITDA by Segment ($ in millions) For the nine months ended September 30, 2015 For the nine months ended September 30, 2015 Servicing Servicing Originations Originations Reverse Mortgage Reverse Mortgage Other Other Total Consolidated Total Consolidated Income (loss) before income taxes $ (121.2 ) $ 111.3 $ (81.9 ) $ (104.4 ) $ (196.2 ) ADJUSTED EARNINGS (LOSS) Step-up depreciation and amortization 20.9 6.9 4.0 — 31.8 Step-up amortization of sub-servicing contracts 14.6 — — — 14.6 Non-cash interest expense 1.5 — — 8.0 9.5 Share-based compensation expense 8.5 3.7 1.7 0.4 14.3 Fair value to cash adjustments for reverse loans — — (7.6 ) — (7.6 ) Changes in fair value due to changes in valuation inputs and other assumptions 157.3 — — — 157.3 Goodwill impairment — — 56.5 — 56.5 Curtailment expense — — 23.0 — 23.0 Legal and regulatory matters 2.2 — 5.0 — 7.2 Restructuring and exit costs 5.7 1.0 1.0 0.9 8.5 Other(1) 1.6 0.6 0.5 6.5 9.1 Total adjustments 212.3 12.1 84.1 15.7 324.2 Adjusted Earnings (Loss) 91.1 123.4 2.2 (88.8 ) 128.0 ADJUSTED EBITDA Depreciation and amortization 13.4 6.2 2.0 — 21.6 Amortization of servicing rights and other fair value adjustments 184.0 — 1.6 — 185.6 Interest expense on debt 7.0 — — 104.2 111.2 Other(2) (5.6 ) 7.5 0.2 0.1 2.1 Total adjustments 198.8 13.7 3.7 104.3 320.5 Adjusted EBITDA $ 289.9 $ 137.1 $ 5.9 $ 15.6 $ 448.5 Please note that numbers may not foot due to rounding (1) Includes the net provision for the repurchase of loans sold, non-cash interest income, severance, gain 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. (2) Includes severance, gain on extinguishment of debt, the net impact of the Non-Residual Trusts; transaction and integration costs; and certain non-recurring costs.

Reconciliation of Funds Generated in Period to Net Increase in Cash and Cash Equivalents ($ in millions) (1) Represents originated MSRs that have been capitalized upon transfer of loans. (2) Represents originations activity including purchases and originations of residential loans held for sale, proceeds from sale and payments on residential loans held for sale, net change in master repurchase agreements associated with residential loans held for sale and total net gains on sales of loans less gain on capitalized servicing rights. (3) Represents payments for acquisitions of businesses net of cash acquired, acquisitions of servicing rights and transaction & integration costs incurred as a result. For the three months ended For the three months ended September 30, 2016 September 30, 2016 September 30, 2015 September 30, 2015 Adjusted EBITDA $ 93.8 $ 145.4 Less: Cash Interest Expense on Corporate Debt (17.8 ) (17.9 ) Cash Taxes/Refund 28.2 0.5 Capital Expenditures (6.5 ) (7.0 ) Funds Generated in Period $ 97.7 $ 121.0 Investing and Financing activity and other uses of Funds Generated in Period: Investment in retained OMSRs(1) (49.9 ) (84.4 ) Net investment in originations activity(2) (13.8 ) 37.8 Net activity for servicing advances (41.7 ) 18.4 Net investment in reverse mortgage activity (1.2 ) (35.6 ) Proceeds from servicing rights related liabilities, net of payments (6.4 ) (2.3 ) Acquisitions, including related transaction costs(3) (2.8 ) (47.2 ) Proceeds from sales of servicing rights and trading securities 15.6 69.6 Net payments of corporate debt (25.4 ) (54.1 ) Other working capital 0.7 (98.4 ) Change in Cash and Cash Equivalents $ (27.2 ) $ (75.2 ) Cash flows provided by (used in) operating activities 65.1 383.3 Cash flows provided by (used in) investing activities 97.3 (105.8 ) Cash flows provided by (used in) financing activities (189.6 ) (352.7 ) Total change in cash and cash equivalents (27.2 ) (75.2 )

Reconciliation of Funds Generated in Period to Net Increase in Cash and Cash Equivalents ($ in millions) (1) Represents originated MSRs that have been capitalized upon transfer of loans. (2) Represents originations activity including purchases and originations of residential loans held for sale, proceeds from sale and payments on residential loans held for sale, net change in master repurchase agreements associated with residential loans held for sale and total net gains on sales of loans less gain on capitalized servicing rights. (3) Represents payments for acquisitions of businesses net of cash acquired, acquisitions of servicing rights and transaction & integration costs incurred as a result. For the twelve months ended For the twelve months ended For the nine months ended For the nine months ended For the year ended For the year ended For the nine months ended For the nine months ended September 30, 2016 September 30, 2016 September 30, 2016 September 30, 2016 December 31, 2015 December 31, 2015 September 30, 2015 September 30, 2015 Adjusted EBITDA $ 380.8 $ 279.6 $ 549.7 $ 448.5 Less: Cash Interest Expense on Corporate Debt (126.0 ) (79.7 ) (128.9 ) (82.6 ) Cash Taxes/Refund 29.2 28.1 1.6 0.5 Capital Expenditures (40.2 ) (29.1 ) (27.8 ) (16.7 ) Funds Generated in Period $ 243.8 $ 198.9 $ 394.6 $ 349.7 Investing and Financing activity and other uses of Funds Generated in Period: Investment in retained OMSRs(1) (211.6 ) (148.4 ) (306.7 ) (243.5 ) Net investment in originations activity(2) (23.0 ) (2.7 ) (10.1 ) 10.2 Net activity for servicing advances (15.9 ) 36.1 51.9 103.9 Net investment in reverse mortgage activity 80.2 33.4 (58.1 ) (104.9 ) Proceeds from servicing rights related liabilities, net of payments 63.9 13.7 43.4 (6.8 ) Acquisitions, including related transaction costs(3) (48.8 ) (17.4 ) (273.4 ) (242.0 ) Proceeds from sales of servicing rights and trading securities 35.5 35.5 70.4 70.4 Net payments of corporate debt (62.2 ) (32.0 ) (92.8 ) (62.6 ) Other working capital (44.7 ) (34.2 ) 63.5 74.0 Change in Cash and Cash Equivalents $ 17.2 $ 82.9 $ (117.3 ) $ (51.6 ) Cash flows provided by (used in) operating activities 212.6 375.2 (48.1 ) 114.5 Cash flows provided by (used in) investing activities 341.6 294.9 (454.9 ) (501.6 ) Cash flows provided by (used in) financing activities (537.0 ) (587.2 ) 385.7 335.5 Total change in cash and cash equivalents 17.2 82.9 (117.3 ) (51.6 )

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