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): August 8, 2017

 

 

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.)

1100 Virginia Drive, Suite 100

Fort Washington, PA 19034

(Address of principal executive offices, including zip code)

(844) 714-8603

(Registrant’s telephone number, including area code)

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))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company  ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

 

 

 


Item 1.01. Entry into a Material Definitive Agreement.

On August 9, 2017, Walter Investment Management Corp. (the “Company,” “we” or “our”) amended its previously filed Annual Report on Form 10-K for the fiscal year ended December 31, 2016 and Quarterly Reports on Form 10-Q for the quarterly periods ended June 30, 2016, September 30, 2016 and March 31, 2017 (collectively, the “Amended Filings”), in order to correct an error in the Company’s calculation of the valuation allowance on its deferred tax asset balances (the “Restatement”). On August 9, 2017, the Company also filed its Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2017 (the “2017 Second Quarter Report”).

As previously disclosed, the Company has entered into a Restructuring Support Agreement (as amended, the “RSA”) with lenders holding, as of July 31, 2017, more than 50% of the loans and/or commitments outstanding (the “Consenting Term Lenders”) under the Amended and Restated Credit Agreement, dated as of December 19, 2013, by and among the Company, as the borrower, Credit Suisse AG, as administrative agent, and the lenders party thereto (the “Credit Agreement”). As set forth in the RSA, the parties thereto have agreed to, among other things, the principal terms of a proposed financial restructuring of the Company, which will be implemented through an out-of-court restructuring and, in the absence of sufficient stakeholder support for an out-of-court restructuring, a prepackaged plan of reorganization under chapter 11 of Title 11 of the United States Code (the “In-Court Restructuring”). Due to the potential for an In-Court Restructuring, substantial doubt has been raised about the Company’s ability to continue as a going concern, and the audit opinion included in the Company’s Annual Report on Form 10-K/A for the year ended December 31, 2016 contains a going concern emphasis paragraph (collectively, the “Going Concern Disclosures”). Each of the Amended Filings and the 2017 Second Quarter Report discuss such matters in greater detail and states the Company’s consolidated financial statements included therein have been prepared assuming the Company will continue as a going concern.

As disclosed on the Company’s Current Reports on Form 8-K filed with the SEC on June 2, 2017, June 12, 2017, July 7, 2017 and July 27, 2017, the Company received limited waivers from each of its warehouse and advance facility lenders to the extent necessary to waive any default, event of default, amortization event, termination event or similar event resulting or arising from the Restatement.

Due to the Going Concern Disclosures, the Company has obtained amendments from each of its affected warehouse lenders to avoid potential defaults under its warehouse facilities in respect thereof. On August 8, 2017, the Company entered into amendments to the following agreements and related transaction documents (collectively, the “RMS Going Concern Amendments”):

 

    Amended and Restated Master Repurchase Agreement, dated May 22, 2017 (as amended, restated, supplemented or otherwise modified prior to the date hereof), among Reverse Mortgage Solutions, Inc., as a seller, RMS REO BRC, LLC, as a seller, and Barclays Bank PLC, as purchaser and agent; and

 

    Amended and Restated Master Repurchase Agreement, dated as of February 21, 2017 (as amended, restated, supplemented or otherwise modified prior to the date hereof) among Credit Suisse First Boston Mortgage Capital LLC, as administrative agent, Credit Suisse AG, acting through its Cayman Islands Branch, as a committed buyer and a buyer, Alpine Securitization LTD, as a buyer, and other buyers joined thereto from time to time, Reverse Mortgage Solutions, Inc., as a seller, and RMS REO CS, LLC.


The Company has also received similar amendments from each of its other affected warehouse lenders (collectively with the RMS Going Concern Amendments, the “Going Concern Amendments”).

The Going Concern Amendments revise certain provisions in each agreement to the extent necessary to avoid any default or event of default that may have otherwise been caused by the Going Concern Disclosures contained in the Company’s financial statements for the period ended December 31, 2016.

As previously disclosed, the Company and the Consenting Term Lenders entered into a waiver to the Credit Agreement, pursuant to which the Consenting Term Lenders representing the Required Lenders (as defined in the Credit Agreement) waived, subject to the conditions specified therein, certain events of default under the Credit Agreement as a result of or arising from a “going concern” or like qualification in the auditor report delivered in connection with the Amended Filings.

In connection with providing the various amendments described above, certain of the Company’s lenders have effected reductions in our advance rates and / or have required other changes to the terms of such facilities.

The foregoing description of the RMS Going Concern Amendments does not purport to be complete and is qualified in its entirety by reference to the full text of the RMS Going Concern Amendments, which are filed as Exhibits 10.1 and 10.2 to this Form 8-K.

Cautionary Statements Regarding Forward-Looking Information

This Current Report on Form 8-K includes “forward-looking statements” within the meaning of the safe harbor provisions of the United States Private Securities Litigation Reform Act of 1995. Certain of these forward-looking statements can be identified by the use of words such as “believes,” “expects,” “intends,” “plans,” “estimates,” “assumes,” “may,” “should,” “will,” “seeks,” “targets,” or other similar expressions. Such statements may include, but are not limited to, statements about the RSA, the Going Concern Disclosures and the Company’s plans, objectives, expectations and intentions and other statements that are not historical facts.

Forward-looking statements are subject to significant 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 the Company’s current beliefs, intentions and expectations and are not guarantees or indicative of future performance, nor should any conclusions be drawn or assumptions be made as to the potential outcome of any strategic initiatives we pursue. Risks and uncertainties relating to the Restatement include: reactions from the Company’s creditors, stockholders, or business partners; our ability to remediate control deficiencies and material weaknesses, and the timing and expense of such remediation; and the impact and result of any litigation or regulatory inquiries or investigations related to the findings of the Company’s assessment or the Company’s Restatement. Risks and uncertainties relating to the proposed financial restructuring include: the ability of the Company to comply with the terms of the RSA, including completing various stages of the restructuring within the dates specified by the RSA; the ability of the Company to obtain requisite support of the restructuring from various stakeholders; the effects of disruption from the proposed restructuring making it more difficult to maintain business, financing and operational relationships; and the ability of the Company to continue as a going concern. 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 above and in more detail under the heading “Risk Factors” in the Company’s annual and quarterly reports filed with the SEC.


The above factors, risks and uncertainties are difficult to predict, contain uncertainties that may materially affect actual results and may be beyond the Company’s control. New factors, risks and uncertainties emerge from time to time, and it is not possible for management to predict all such factors, risks and uncertainties. Although the Company believes that the assumptions underlying the forward-looking statements 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 the Company or any other person that the results or conditions described in such statements or our objectives and plans will be achieved. The Company makes 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 the Company were in any particular instance to update or correct a forward-looking statement, investors and others should not conclude that the Company would make additional updates or corrections thereafter except as otherwise required under the federal securities laws.

 

Item 9.01. Financial Statements and Exhibits.

 

(d) Exhibits.

 

10.1    Amendment No. 1 to Amended and Restated Master Repurchase Agreement, dated as of August 8, 2017, among Reverse Mortgage Solutions, Inc., RMS REO BRC, LLC, Walter Investment Management Corp. and Barclays Bank PLC.
10.2    Amendment No. 1 to Amended and Restated Master Repurchase Agreement, dated as of August 8, 2017, among Credit Suisse First Boston Mortgage Capital LLC, Credit Suisse AG, Cayman Islands Branch, Alpine Securitization LTD, Ditech Financial LLC, Reverse Mortgage Solutions, Inc., RMS REO CS, LLC and Walter Investment Management Corp.


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: August 11, 2017

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


Exhibit Index

 

Exhibit No.    Exhibit
10.1    Amendment No. 1 to Amended and Restated Master Repurchase Agreement, dated as of August 8, 2017, among Reverse Mortgage Solutions, Inc., RMS REO BRC, LLC, Walter Investment Management Corp. and Barclays Bank PLC.
10.2    Amendment No. 1 to Amended and Restated Master Repurchase Agreement, dated as of August 8, 2017, among Credit Suisse First Boston Mortgage Capital LLC, Credit Suisse AG, Cayman Islands Branch, Alpine Securitization LTD, Ditech Financial LLC, Reverse Mortgage Solutions, Inc., RMS REO CS, LLC and Walter Investment Management Corp.

Exhibit 10.1

EXECUTION

AMENDMENT NO. 1 TO

AMENDED AND RESTATED MASTER REPURCHASE AGREEMENT

THIS AMENDMENT NO. 1 TO AMENDED AND RESTATED MASTER REPURCHASE AGREEMENT, dated as of August 8, 2017 (this “ Amendment ”), is entered into by and among Reverse Mortgage Solutions, Inc. (“ RMS ”), RMS REO BRC, LLC (“ REO Subsidiary ” and, individually or collectively with RMS, as the context may require, “ Seller ”) and Barclays Bank PLC, as purchaser (“ Purchaser ”) and as agent (“ Agent ”), and amends that certain Amended and Restated Master Repurchase Agreement, dated as of May 22, 2017 (as amended, restated, supplemented or otherwise modified from time to time, the “ Repurchase Agreement ”), among RMS, REO Subsidiary, Purchaser and Agent. Unless otherwise defined herein, capitalized terms used in this Amendment have the meanings assigned to such terms in the Repurchase Agreement.

Recitals

WHEREAS, pursuant to Section 28 of the Repurchase Agreement, the parties hereto desire to amend the Repurchase Agreement to make such modifications as further described below.

NOW, THEREFORE, pursuant to the provisions of the Repurchase Agreement concerning modification and amendment thereof, and in consideration of the amendments, agreements and other provisions herein contained and of certain other good and valuable consideration the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows:

Agreements

Section 1. Amendment . Effective as of the Amendment Effective Date, the parties hereto hereby agree to amend Section 2 of the Repurchase Agreement by amending clause (vi) of the defined term “ Act of Insolvency ” by inserting the text “(except with respect to financial statements for the period ended December 31, 2016)” immediately after the words “financial statements”.

Section 2. Agreement in Full Force and Effect as Amended . As specifically amended hereby, the Repurchase Agreement remains in full force and effect. All references to the Agreement in any Program Document shall be deemed to mean the Repurchase Agreement as supplemented and amended hereby. This Amendment shall not constitute a novation of the Repurchase Agreement, but is a supplement thereto. The parties hereto agree to be bound by the terms and conditions of the Repurchase Agreement, as supplemented and amended by this Amendment, to the same effect as if such terms and conditions were set forth herein verbatim .

Section 3. Conditions to Effectiveness of this Amendment . This Amendment shall become effective on the day (the “ Amendment Effective Date ”) when Seller shall have (i) paid to Purchaser and Agent and Purchaser and Agent shall have received all accrued and unpaid fees and expenses owed to Purchaser and Agent in accordance with the Program Documents, in each case, in immediately available funds, and without deduction, set-off or counterclaim, (ii) delivered to Purchaser and Agent (a) a copy of this Amendment duly executed by each of the parties hereto and (b) any other documents reasonably requested by Purchaser or Agent, each of which shall be in form and substance acceptable to Purchaser and Agent and (iii) received an executed amendment or waiver with substantially the same effect as this Amendment from each affected warehouse lender.

Section 4. Additional Covenant . In the event Seller or Walter Investment Management Corp. (“ Guarantor ”) agrees, in connection with any amendment or waiver referred to in Section 3(iii) hereof, to (i) pay any structuring fee, upfront fee or waiver fee (in each case, howsoever described or


denominated), (ii) a change in any existing upfront fee or structuring fee (in each case, howsoever described or denominated), or (iii) any change in any existing applicable interest margin (howsoever described or denominated) (and that, in the case of clause (ii) or (iii), results in an upfront fee, structuring fee or applicable interest margin under another of Seller’s or Guarantor’s warehouse financing arrangement that is more favorable to Seller’s or Guarantor’s lender than the upfront fee, structuring fee or applicable interest margin (in each case, howsoever described or denominated) in the Program Documents), such waiver fee, such upfront fee, such structuring fee or such applicable interest margin shall be automatically incorporated into the Program Documents as if fully set forth therein without the need of any further action on the part of any party. Any such waiver fee or increase of such upfront fee or structuring fee shall be deemed fully earned and shall be paid by Seller or Guarantor to Purchaser by wire transfer of immediately available funds in accordance with Purchaser’s Wire Instructions on the date so incorporated into the Transaction Documents.

Section 5. Termination . This Amendment shall terminate and the amendment herein shall be void if any warehouse lender, term loan lender, or other affected party accelerates the debt of Seller or Guarantor, declares an event of default, or exercises any remedies, or takes an action in furtherance of any of the foregoing as a result of the restatement of Guarantor’s or Seller’s financial statements for the fiscal quarters ended June 30, 2016 and September 30, 2016, its financial statements for the fiscal year ended December 31, 2016, and its financial statements for the fiscal quarter ended March 31, 2017.

Section 6. Representations . In order to induce Purchaser and Agent to execute and deliver this Amendment, Sellers hereby represent to Purchaser and Agent, that as of the date of this Amendment and after giving effect to the amendment provided for in Section 1 hereof, (i) each is in full compliance with all of the terms and conditions of the Program Documents and remains bound by the terms thereof and (ii) no Default or Event of Default has occurred and is continuing under the Program Documents.

Section 7. Miscellaneous .

(a) This Amendment shall be binding upon the parties hereto and their respective successors and assigns.

(b) The various headings and sub-headings of this Amendment are inserted for convenience only and shall not affect the meaning or interpretation of this Amendment or the Repurchase Agreement or any provision hereof or thereof.

(c) THIS AMENDMENT SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAWS PROVISIONS EXCEPT SECTIONS 5-1401 AND 5-1402 OF NEW YORK GENERAL OBLIGATIONS LAW, AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HEREUNDER SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.

(d) This Amendment may be executed in one or more counterparts and by the different parties hereto on separate counterparts, including without limitation counterparts transmitted by facsimile or in .pdf format, each of which, when so executed, shall be deemed to be an original and such counterparts, together, shall constitute one and the same agreement.

(The remainder of this page is intentionally blank.)

 

2


IN WITNESS WHEREOF, each undersigned party has caused this Amendment to be duly executed by one of its officers thereunto duly authorized as of the date and year first above written.

 

REVERSE MORTGAGE SOLUTIONS, INC. ,
as a Seller
By:   /s/ Cheryl Collins
Name: Cheryl Collins
Title: Senior Vice President
RMS REO BRC, LLC ,
as a Seller
By:   /s/ Cheryl Collins
Name: Cheryl Collins
Title: Manager
BARCLAYS BANK PLC ,
as Purchaser and as Agent
By:   /s/ Joseph O’Doherty
Name: Joseph O’Doherty
Title: Managing Director

Acknowledged and Agreed with respect to Section 4:

WALTER INVESTMENT MANAGEMENT CORP. ,

as Guarantor
By:   /s/ Cheryl Collins
Name: Cheryl A. Collins
Title: SVP & Treasurer

[Signature Page to Barclays – RMS Amendment No. 1 to A&R MRA]

Exhibit 10.2

AMENDMENT NO. 1

TO AMENDED AND RESTATED MASTER REPURCHASE AGREEMENT

Amendment No. 1 to Amended and Restated Master Repurchase Agreement, dated as of August 8, 2017 (this “ Amendment ”), among CREDIT SUISSE FIRST BOSTON MORTGAGE CAPITAL LLC (the “ Administrative Agent ”), CREDIT SUISSE AG, a company incorporated in Switzerland, acting through its Cayman Islands Branch (“ CS Cayman, ” a “ Committed Buyer ” and a “ Buyer ”), ALPINE SECURITIZATION LTD (“ Alpine ” and a “ Buyer ”) and other Buyers joined thereto from time to time (the “ Buyers ”), REVERSE MORTGAGE SOLUTIONS, INC. (the “ Seller ”) and RMS REO CS, LLC (“ REO Subsidiary ” and together with Seller, each a “ Seller Party ” and collectively, the “ Seller Parties ”).

RECITALS

The Administrative Agent, Buyers and the Seller Parties are parties to that certain (a) Amended and Restated Master Repurchase Agreement, dated as of February 21, 2017 (as amended, restated, supplemented or otherwise modified from time to time, the “ Existing Repurchase Agreement ”; and as further amended by this Amendment, the “ Repurchase Agreement ”) and (b) Amended and Restated Pricing Side Letter, dated as of February 21, 2017 (the “ Pricing Side Letter ”). The Guarantor is party to that certain Amended and Restated Guaranty (as amended, restated, supplemented or otherwise modified from time to time, the “ Guaranty ”), dated as of February 21, 2017, by the Guarantor in favor of Administrative Agent for the benefit of Buyers. Capitalized terms used but not otherwise defined herein shall have the meanings given to them in the Existing Repurchase Agreement, Pricing Side Letter and Guaranty, as applicable.

The Administrative Agent, Buyers, Seller Parties and the Guarantor have agreed, subject to the terms and conditions of this Amendment, that the Existing Repurchase Agreement be amended to reflect certain agreed upon revisions to the terms of the Existing Repurchase Agreement. As a condition precedent to amending the Existing Repurchase Agreement, the Administrative Agent and Buyers have required the Guarantor to ratify and affirm the Guaranty on the date hereof.

Accordingly, the Administrative Agent, Buyers, Seller Parties and the Guarantor hereby agree, in consideration of the mutual promises and mutual obligations set forth herein, that the Existing Repurchase Agreement is hereby amended as follows:

SECTION 1. Event of Default . Section 15(n) of the Existing Repurchase Agreement is hereby amended by inserting the text “(except with respect to financial statements for the period ended December 31, 2016)” immediately after the words “financial statements”.

SECTION 2. Conditions Precedent . This Amendment shall become effective as of the date hereof (the “ Amendment Effective Date ”), subject to the satisfaction of the following conditions precedent:

2.1 Delivered Documents . On the Amendment Effective Date, the Administrative Agent on behalf of Buyer shall have received the following documents, each of which shall be satisfactory to the Administrative Agent in form and substance:

(a) this Amendment, executed and delivered by the Administrative Agent, Buyers, the Seller and the Guarantor;


(b) written e-mail confirmation from an authorized officer of Guarantor stating that Seller has received amendments substantially similar to this Amendment from all of other relevant counterparties with whom Seller has an additional repurchase or warehouse facility; and

(c) such other documents as the Administrative Agent or counsel to the Administrative Agent may reasonably request.

SECTION 3. Representations and Warranties . Seller hereby represents and warrants to the Administrative Agent and Buyers that it is in compliance with all the terms and provisions set forth in the Repurchase Agreement on its part to be observed or performed, and that no Event of Default has occurred or is continuing, and hereby confirms and reaffirms the representations and warranties contained in Section 13 of the Repurchase Agreement.

SECTION 4. Limited Effect . Except as expressly amended and modified by this Amendment, the Existing Repurchase Agreement shall continue to be, and shall remain, in full force and effect in accordance with its terms.

SECTION 5. Severability . Each provision and agreement herein shall be treated as separate and independent from any other provision or agreement herein and shall be enforceable notwithstanding the unenforceability of any such other provision or agreement.

SECTION 6. Counterparts . This Amendment may be executed by each of the parties hereto on any number of separate counterparts, each of which shall be an original and all of which taken together shall constitute one and the same instrument.

SECTION 7. Reaffirmation of Guaranty . The Guarantor hereby ratifies and affirms all of the terms, covenants, conditions and obligations of the Guaranty and acknowledges and agrees that the term “ Obligations ” as used in the Guaranty shall apply to all of the Obligations of Seller to Administrative Agent and Buyers under the Repurchase Agreement and Pricing Side Letter, as amended hereby.

SECTION 8. GOVERNING LAW . THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REFERENCE TO THE CHOICE OF LAW PROVISIONS THEREOF.

[SIGNATURE PAGE FOLLOWS]

 

2


IN WITNESS WHEREOF, the undersigned have caused this Amendment to be duly executed as of the date first above written.

 

CREDIT SUISSE FIRST BOSTON MORTGAGE CAPITAL LLC , as Administrative Agent

By:   /s/ Michael B. Dryden
Name:   Michael B. Dryden
Title:   Managing Director

CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH , as Committed Buyer

By:   /s/ Michael Eaton
Name:   Michael Eaton
Title:   Authorized Signatory
By:   /s/ Patrick Duggan
Name:   Patrick Duggan
Title:   Authorized Signatory

ALPINE SECURITIZATION LTD , as a Buyer, by Credit Suisse AG, New York Branch as Attorney-in-Fact

By:   /s/ Michael Eaton
Name:   Michael Eaton
Title:   Associate
By:   /s/ Patrick Duggan
Name:   Patrick Duggan
Title:   Associate

Signature Page to Amendment No. 1 to Amended and Restated Master Repurchase Agreement


REVERSE MORTGAGE SOLUTIONS, INC. , as Seller

By:   /s/ Cheryl Collins
Name:   Cheryl Collins
Title:   SVP & Treasurer

RMS REO CS LOLC, as REO Subsidiary

By:   /s/ Cheryl Collins
Name:   Cheryl Collins
Title:   Manager

WALTER INVESTMENT MANAGEMENT CORP. , as Guarantor

By:   /s/ Cheryl Collins
Name:   Cheryl Collins
Title:   SVP & Treasurer

Signature Page to Amendment No. 1 to Amended and Restated Master Repurchase Agreement