Operational success defined 2014 for Walter Investment Management Corp., and the groundwork we laid over the past several years was realized via operational increases in each of our businesses. Aligned with our strategic initiatives, select highlights include:

• Our servicing portfolio realized 18% year-over-year growth to $256.1 billion, closing $79.6 billion of MSR purchases and sub-servicing transfers in a challenging transfer environment, including $18.5 billion of replenishment from our Originations segment.
• Our originations business realized 16% year-over-year growth in funded volumes to $18.5 billion.
• Our reverse mortgage operations issued $1.5 billion of securitized unpaid principal balances, ranking it as the largest HMBS issuer for the year.
• We assisted approximately 66,000 homeowners in obtaining modifications compared to 39,000 in 2013, providing our customers with affordable solutions that allowed them to stay in their homes and demonstrating our commitment to sustainable homeownership.
• We originated approximately 56,000 HARP loans, helping homeowners gain access to affordable refinancing.
• Our 30+ day delinquencies for the mortgage portfolio were 200 basis points lower year-over-year.

Additionally, our servicing business maintained the prestigious Fannie Mae 4-STAR servicer rating, earning this distinction for the second consecutive year.

We are proud of the number of homeowners we assisted and of our overall operational accomplishments in 2014 and remain starkly conscious of the work we need to continue to do to meet our business objectives to positively impact our shareholder value — increasing value for you.

We continue to redouble our efforts to not just meet but exceed all regulatory expectations. We have worked to improve our processes and inspire our people, resulting in a more aware and proactive employee population.

This said, we also understand there is more work to be done because the standards of compliance are so exacting, and we are collectively focused on creating a stronger culture of compliance. Our overarching goal remains to provide compliant and excellent service to both our consumers and the owners of credit.

The changes to the HECM product announced by HUD in late 2013 meaningfully impacted our Reverse Mortgage business this year as the new products available to borrowers resulted in lower initial available principal draws, deferring a significant amount of potential cash flow to future years. As utilization caps on the loans originated in 2014 expire and borrowers decide to make their second draws we expect to realize the full value of this product.

All told, the operational gains we experienced in 2014, balanced with our continued dedication to building a culture of compliance, position us for what I believe will be a year of marked and steady growth, delivering a quality experience for the many constituents we serve.

I am personally excited about the value proposition that will be realized in 2015 via our Walter family of mortgage companies. With originations, servicing and reverse under one roof, consumers can remain with the Walter family from their first mortgage through servicing and ultimately obtain a reverse mortgage should it be the right product for the borrower. We can truly meet the consumer at every stage of their homeownership lifecycle, a unique opportunity not many organizations can offer.

Aligned with our value proposition, in 2015 we will consolidate our originations business, Ditech, and our servicing business, Green Tree, under a single unified business: “Ditech, A Walter Company.” As we undertake this important customer-focused and efficiency-driven effort, all activities will be underscored by the guiding principles of this consolidation:

• Partnering with our customers to achieve sustainable homeownership
• Providing service excellence through the life of the mortgage relationship — from originations through servicing and ultimately the origination of a reverse mortgage
• Streamlining our operations to operate more efficiently and effectively

The consolidation of our originations and servicing entities under one business and brand creates an end-to-end mortgage operation, which we believe supports our target of meaningful growth in our mortgage servicing portfolio. We expect this growth to be driven by bulk MSR acquisitions, organic replenishment from originations and an increase in our sub-servicing mix via leveraging our relationships with external capital partners. We also anticipate servicing to benefit from improving borrower credit quality and declining delinquency rates which we expect to result in a reduction of related servicing costs.

In originations, we anticipate retention volumes will be impacted by a reduction in the HARP opportunity and expect a transition to the retail and consumer direct channels to somewhat offset volume lost in the retention channel. Further, we believe consolidating originations and servicing is strategically important as loans originated can be serviced by the same company, building stronger brand identity and loyalty over the life of the loan.

The consolidation will be underscored by an enhanced focus on the use of technology to drive efficiencies through the reduction of duplicative functions, driving cost out of our operations and enabling us to become a stronger, more unified end-to-end mortgage company. Simply, on multiple levels, we believe these businesses will be stronger together, more nimble and better poised to deliver on our value proposition to our consumers.

Our goal for our reverse mortgage business is steady growth in 2015, as earnings should be positively impacted by the realization of income from anticipated tail draws from eligible borrowers.

Finally, we will continue to leverage relationships with external capital partners to maintain additional flexibility in our balance sheet.

Our Walter Investment team is actively engaged in taking steps to better deliver on our promise to our current customers and potential consumers to provide compliant and excellent service while supporting sustainable homeownership.

We believe these collective efforts will position us to deliver value in a meaningful way to all our stakeholders, including each and every shareholder.

Mark J. O'Brien
Chairman of the Board and Chief Executive Officer