10-Q

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

Form 10-Q

þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2010

or

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from            to

Commission file number: 001-13417

Walter Investment Management Corp.

(Exact name of registrant as specified in its charter)

Maryland
(State or other Jurisdiction of
Incorporation or Organization) 13-3950486
(I.R.S. Employer
Identification No.)

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

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

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ   No o

     Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes o   No o

     Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer o Accelerated filer þ Non-accelerated filer o (Do not check if a smaller reporting company) Smaller reporting company o

     Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o   No þ

The registrant had 25,703,880 shares of common stock outstanding as of May 3, 2010.

WALTER INVESTMENT MANAGEMENT CORP.

FORM 10-Q

INDEX

	Page No.
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements	3
Consolidated Balance Sheets as of March 31, 2010 (unaudited) and December 31, 2009	3
Consolidated Statements of Income for the Three Months Ended March 31, 2010 and 2009 (unaudited)	4
Consolidated Statement of Stockholders’ Equity and Comprehensive Income for the Three Months Ended March 31, 2010 (unaudited)	5
Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2010 and 2009 (unaudited)	6
Notes to Consolidated Financial Statements (unaudited)	7
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	20
Item 3. Quantitative and Qualitative Disclosures About Market Risk	32
Item 4. Controls and Procedures	33
PART II. OTHER INFORMATION
Item 1. Legal Proceedings	35
Item 1A. Risk Factors	35
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	35
Item 3. Defaults Upon Senior Securities	35
Item 4. (Removed and Reserved)	35
Item 5. Other Information	35
Item 6. Exhibits	35
Signatures	36
EX-10.4
EX-10.5
EX-10.6
EX-10.9
EX-10.10
EX-10.11
EX-10.12
EX-31.1
EX-31.2
EX-32

PART 1. FINANCIAL INFORMATION

Item 1. Financial Statements

WALTER INVESTMENT MANAGEMENT CORP. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share data)

	March 31,		December 31,
	2010		2009
	(Unaudited)
ASSETS
Cash and cash equivalents	$	96,302	$	99,286
Restricted cash		8,901		8,963
Restricted cash of securitization trusts		41,324		42,691
Receivables, net		3,542		3,052
Residential loans, net of allowance for loan losses of $3,384 and $3,460, respectively		327,775		333,636
Residential loans of securitization trusts, net of allowance for loan losses of $13,940 and $14,201, respectively		1,292,561		1,310,710
Subordinate security		1,837		1,801
Real estate owned		25,284		21,981
Real estate owned of securitization trusts		36,667		41,143
Deferred debt issuance costs of securitization trusts		18,137		18,450
Other assets		5,073		5,961
Total assets	$	1,857,403	$	1,887,674
LIABILITIES AND STOCKHOLDERS’ EQUITY
Accounts payable	$	477	$	13,489
Accounts payable of securitization trusts		555		556
Accrued expenses		25,438		28,296
Deferred income taxes, net		161		173
Mortgage-backed debt of securitization trusts		1,244,379		1,267,454
Accrued interest of securitization trusts		8,555		8,755
Other liabilities		776		767
Total liabilities		1,280,341		1,319,490
Commitments and contingencies (Note 17)
Stockholders’ equity:
Preferred stock, $0.01 par value per share:
Authorized — 10,000,000 shares
Issued and outstanding — 0 shares at March 31, 2010 and December 31, 2009		—		—
Common stock, $0.01 par value per share:
Authorized — 90,000,000 shares
Issued and outstanding — 25,694,073 and 25,642,889 shares at March 31, 2010 and December 31, 2009, respectively		257		256
Additional paid-in capital		123,471		122,552
Retained earnings		451,545		443,433
Accumulated other comprehensive income		1,789		1,943
Total stockholders’ equity		577,062		568,184
Total liabilities and stockholders’ equity	$	1,857,403	$	1,887,674

The accompanying notes are an integral part of the consolidated financial statements.

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WALTER INVESTMENT MANAGEMENT CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(in thousands, except share and per share data)

	For the Three Months
	Ended March 31,
	2010		2009
Net interest income:
Interest income	$	41,628	$	45,829
Less: Interest expense		21,274		23,089
Total net interest income		20,354		22,740
Less: Provision for loan losses		3,190		4,376
Total net interest income after provision for loan losses		17,164		18,364
Non-interest income:
Premium revenue		2,691		3,065
Other income, net		760		160
Total non-interest income		3,451		3,225
Non-interest expenses:
Claims expense		912		1,289
Salaries and benefits		6,981		4,285
Legal and professional		899		704
Occupancy		345		335
Technology and communication		728		818
Depreciation and amortization		91		78
General and administrative		2,365		1,533
Other expense		51		337
Related party — allocated corporate charges		—		853
Total non-interest expenses		12,372		10,232
Income before income taxes		8,243		11,357
Income tax expense		131		4,155
Net income	$	8,112	$	7,202
Basic earnings per common and common equivalent share	$	0.30	$	0.36
Diluted earnings per common and common equivalent share	$	0.30	$	0.36
Weighted average common and common equivalent shares outstanding — basic		26,343,279		19,871,205
Weighted average common and common equivalent shares outstanding — diluted		26,403,281		19,871,205

The accompanying notes are an integral part of the consolidated financial statements.

4

WALTER INVESTMENT MANAGEMENT CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF STOCKHOLDERS’ EQUITY

AND COMPREHENSIVE INCOME

(Unaudited)

(in thousands, except share data)

																	Accumulated
									Additional								Other
				Common Stock					Paid-In			Comprehensive			Retained		Comprehensive
	Total			Shares			Amount		Capital			Income			Earnings		Income
Balance at December 31, 2009	$	568,184			25,642,889		$	256	$	122,552					$	443,433	$	1,943
Comprehensive income:
Net income		8,112										$	8,112			8,112
Other comprehensive income (loss), net of tax:
Change in postretirement benefit plans, net of $7 tax effect		(126	)										(126	)				(126	)
Net unrealized gain on subordinate security, net of $0 tax effect		36											36					36
Net amortization of realized gain on closed hedges, net of $0 tax effect		(64	)										(64	)				(64	)
Comprehensive income												$	7,958
Share-based compensation		1,172								1,172
Shares issued upon exercise of stock options and vesting of RSUs		12			70,180			1		11
Repurchase and cancellation of common stock		(264	)		(18,996	)				(264	)
Balance at March 31, 2010	$	577,062			25,694,073		$	257	$	123,471					$	451,545	$	1,789

The accompanying notes are an integral part of the consolidated financial statements.

5

WALTER INVESTMENT MANAGEMENT CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(in thousands)

	For the Three Months
	Ended March 31,
	2010			2009
Operating activities:
Net income	$	8,112		$	7,202
Adjustments to reconcile net income to net cash (used in) provided by operating activities:
Provision for loan losses		3,190			4,376
Amortization of residential loan discount to interest income		(3,235	)		(4,143	)
Depreciation and amortization		91			78
Benefit from deferred income taxes		(5	)		(183	)
Amortization of deferred debt issuance costs to interest expense		259			260
Share-based compensation		1,172			67
Other		(124	)		(121	)
(Increase) decrease in assets:
Receivables		1,108			281
Other		805			(88	)
Increase (decrease) in liabilities:
Accounts payable		235			(188	)
Accrued expenses		(2,858	)		3,906
Accrued interest		(200	)		(253	)
Cash flows provided by operating activities		8,550			11,194
Investing activities:
Principal payments received on residential loans		24,736			30,813
Additions to real estate owned		(3,327	)		(2,071	)
Cash proceeds from sales of real estate owned		2,221			2,452
Additions to property and equipment, net		(8	)		(1,881	)
Decrease in restricted cash		1,429			7
Cash flows provided by investing activities		25,051			29,320
Financing activities:
Payments on mortgage-backed debt		(23,085	)		(27,673	)
Net activity with Walter Energy		—			(8,680	)
Dividends and dividend equivalents declared		(13,248	)		—
Shares issued upon exercise of stock options and vesting of RSUs		12			—
Repurchase and cancellation of common stock		(264	)		—
Cash flows used in financing activities		(36,585	)		(36,353	)
Net increase (decrease) in cash and cash equivalents		(2,984	)		4,161
Cash and cash equivalents at the beginning of the period		99,286			1,319
Cash and cash equivalents at the end of the period	$	96,302		$	5,480
Supplemental Disclosure of Non-Cash Investing and Financing Activities:
Real estate owned acquired through foreclosure	$	21,104		$	20,863
Residential loans originated to finance the sale of real estate owned	$	20,476		$	13,473
Residential loans acquired with warehouse proceeds and/or advances from Walter Energy	$	—		$	1,390
Dividends to Walter Energy	$	—		$	3,356

The accompanying notes are an integral part of the consolidated financial statements.

6

WALTER INVESTMENT MANAGEMENT CORP. AND SUBSIDARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

1. Business

     The Company is a mortgage servicer and mortgage portfolio owner specializing in subprime, non-conforming and other credit-challenged residential loans primarily in the southeastern United States, or U.S. The Company also operates mortgage advisory and insurance ancillary businesses. At March 31, 2010, the Company had four wholly owned, primary subsidiaries: Hanover Capital Partners 2, Ltd., doing business as Hanover Capital, Walter Mortgage Company, LLC, or WMC, Best Insurors, Inc., or Best, and Walter Investment Reinsurance Company, Ltd., or WIRC.

     The Company’s business, headquartered in Tampa, Florida, was established in 1958 as the financing segment of Walter Energy, Inc., formerly known as Walter Industries, Inc., or Walter Energy. Throughout the Company’s history, it purchased residential loans originated by Walter Energy’s homebuilding affiliate, Jim Walter Homes, Inc., or JWH, originated and purchased residential loans on its own behalf, and serviced these residential loans to maturity. Over the past 50 years, the Company has developed significant expertise in servicing credit-challenged accounts through its differentiated high-touch approach which involves significant face-to-face borrower contact by trained servicing personnel strategically located in the markets where its borrowers reside. As of March 31, 2010, the Company serviced approximately 34,000 individual residential loans.

The Spin-off

     On September 30, 2008, Walter Energy outlined its plans to separate its Financing business from its core Natural Resources business through a spin-off to stockholders. Immediately prior to the spin-off, substantially all of the assets and liabilities related to the Financing business were contributed, through a series of transactions, to Walter Investment Management LLC, or WIM, in return for all of WIM’s membership units. See Note 3 for further information.

     The combined financial statements of WMC, Best and WIRC (collectively representing substantially all of Walter Energy’s Financing business prior to the spin-off) are considered the predecessor to WIM for accounting purposes. Under Walter Energy’s ownership, the Financing business operated through separate subsidiaries. A direct ownership relationship did not exist among the legal entities prior to the contribution to WIM.

The Merger

     On September 30, 2008, Walter Energy and WIM entered into a definitive agreement to merge with Hanover Capital Mortgage Holdings, Inc., or Hanover, which agreement was amended and restated on February 17, 2009. On April 17, 2009, Hanover completed the transactions, or the Merger, contemplated by the Second Amended and Restated Agreement and Plan of Merger (as amended on April 17, 2009, or the Merger Agreement) by and among Hanover, Walter Energy, WIM, and JWH Holding Company, LLC, or JWHHC. The merged business, together with its consolidated subsidiaries, was renamed Walter Investment Management Corp. on April 17, 2009 and is referred to herein as “Walter Investment” or the “Company”. See Note 3 for further information.

2. Basis of Presentation

Interim Financial Reporting

     The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States, or GAAP, for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments, consisting of normal recurring accruals, considered necessary for a fair presentation have been included. Operating results for the three month period ended March 31, 2010 are not necessarily indicative of the results that may be expected for the year ended December 31, 2010. These unaudited interim financial statements should be read in conjunction with our audited consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2009.

     Although Hanover was the surviving legal and tax entity in the Merger, for accounting purposes the Merger was treated as a reverse acquisition of the operations of Hanover and has been accounted for pursuant to the guidance concerning business combinations, with WIM as the accounting acquirer. As such, the pre-acquisition financial statements of WIM are treated as the historical financial statements of Walter Investment. The Hanover assets acquired and the liabilities assumed were recorded at the date of acquisition, April 17, 2009, at their respective fair values. The results of operations of Hanover were included in the consolidated statements of income for periods subsequent to the Merger.

     The consolidated financial statements have been prepared in accordance with GAAP, which requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements. Actual results could differ from those estimates. All significant intercompany balances have been eliminated in the consolidated financial statements.

7

     Although the Company did not operate as an independent, stand-alone entity prior to April 17, 2009, management believes the assumptions underlying the consolidated financial statements for the period through April 17, 2009 are reasonable. However, the consolidated financial statements included herein do not include all of the expenses that would have been incurred had the Company been a separate, stand-alone entity, although, the consolidated financial statements do include certain costs and expenses that have been allocated to the Company from Walter Energy for the three months ended March 31, 2009. As such, the financial information does not necessarily reflect what would have been reflected had the Company been a separate, stand-alone entity during the period through April 17, 2009.

Recent Accounting Guidance

Transfers and Servicing

     In June 2009, the FASB issued new accounting guidance concerning the accounting for transfers of financial assets which amends the existing derecognition accounting and disclosure guidance. The guidance eliminates the exemption from consolidation for QSPEs, it also requires a transferor to evaluate all existing QSPEs to determine whether it must be consolidated in accordance with the accounting guidance concerning variable interest entities. The guidance was effective for financial asset transfers occurring after the beginning of an entity’s first fiscal year that begins after November 15, 2009. The adoption of this guidance on January 1, 2010 did not have a significant impact on the Company’s consolidated financial statements.

Fair Value Measurements and Disclosures

     In January 2010, the FASB updated the accounting standards to require new disclosures for fair value measurements and to provide clarification for existing disclosure requirements. More specifically, this update will require (a) an entity to disclose separately the amounts of significant transfers in and out of levels 1 and 2 fair value measurements and to describe the reasons for the transfers and (b) information about purchases, sales, issuances, and settlements to be presented separately (i.e., present the activity on a gross basis rather than net) in the roll forward of fair value measurements using significant unobservable inputs (Level 3 inputs). This update clarifies existing disclosure requirements for the level of disaggregation used for classes of assets and liabilities measured at fair value and requires disclosures about the valuation techniques and inputs used to measure for fair value for both recurring and nonrecurring fair value measurements using Level 2 and Level 3 inputs. The standard was effective for interim and annual reporting periods beginning after December 15, 2009, except for the disclosures about purchases, sales, issuances, and settlements in the roll forward of activity in Level 3 fair value measurements. Those disclosures are effective for fiscal years beginning after December 12, 2010, and for interim periods within those fiscal years. The adoption of this guidance on January 1, 2010 did not have a significant impact on the Company’s consolidated financial statements or disclosures. See Note 5 for the additional required disclosures.

Subsequent Events

     In May 2009, the FASB issued guidelines on subsequent event accounting to establish general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued. This guidance was subsequently amended in February 2010 to no longer require disclosure of the date through which an entity has evaluated subsequent events. The adoption of this guidance did not have a significant impact on the Company’s consolidated financial statements.

Receivables

     In April 2010, the FASB updated the accounting standards to clarify that modifications of acquired loans that are accounted for within a pool would not result in the removal of those loans from the pool even if the modification would otherwise be considered a troubled debt restructuring. The guidance will be effective for modifications of acquired loans accounted for within pools occurring in the first interim or annual period ending on or after July 15, 2010. The Company is continuing to evaluate the impact that the guidance will have on the Company’s consolidated financial statements.

Reclassifications

     In order to provide comparability between periods presented, certain amounts have been reclassified from the previously reported consolidated financial statements to conform to the consolidated financial statement presentation of the current period.

3. Business Separation and Merger

     On September 30, 2008, Walter Energy outlined its plans to separate its Financing business from its core Natural Resources businesses through a spin-off to stockholders and subsequent Merger with Hanover. In furtherance of these plans, on September 30, 2008, Walter Energy and WIM entered into a definitive agreement to merge with Hanover, which agreement was amended and restated on February 17, 2009. To effect the separation, WIM was formed on February 3, 2009, as a wholly-owned subsidiary of Walter Energy, having no independent assets or operations. Immediately prior to the spin-off, substantially all of the assets and

8

liabilities related to the Financing business were contributed, through a series of transactions, to WIM in return for WIM’s membership unit.

     On April 17, 2009, the Company completed its separation from Walter Energy. In connection with the separation, WIM and Walter Energy executed the following transactions or agreements which involved no cash:

• Walter Energy distributed 100% of its interest in WIM to holders of Walter Energy’s common stock;

• All intercompany balances between WIM and Walter Energy were settled with the net balance recorded as a dividend to Walter Energy;

• In accordance with the Tax Separation Agreement, Walter Energy will, in general, be responsible for any and all taxes reported on any joint return through the date of the separation, which may also include WIM for periods prior to the separation. WIM will be responsible for any and all taxes reported on any WIM separate tax return and on any consolidated returns for Walter Investment subsequent to the separation;

• Walter Energy’s share-based awards held by WIM employees were converted to equivalent share-based awards of Walter Investment, with the number of shares and the exercise price being equitably adjusted to preserve the intrinsic value. The conversion was accounted for as a modification pursuant to the guidance concerning stock compensation.

     The assets and liabilities transferred to WIM from Walter Energy also included $26.6 million in cash, which was contributed to WIM by Walter Energy on April 17, 2009. Following the spin-off, WIM paid a taxable dividend consisting of cash of $16.0 million and additional equity interests to its members.

     The Merger occurred immediately following the spin-off and taxable dividend on April 17, 2009. The surviving company, Walter Investment, continues to operate as a publicly traded REIT subsequent to the Merger. After the spin-off and Merger, Walter Energy’s stockholders that became members of WIM as a result of the spin-off, and certain holders of options to acquire limited liability company interests of WIM, collectively owned 98.5% and stockholders of Hanover owned 1.5% of the shares of common stock of Walter Investment outstanding or reserved for issuance in settlement of restricted stock units of Walter Investment. As a result, the business combination has been accounted for as a reverse acquisition, with WIM considered the accounting acquirer. Walter Investment applied for, and was granted approval, to list its shares on the NYSE Amex. On April 20, 2009, the Company’s common stock began trading on the NYSE Amex under the symbol “WAC”.

     The purchase price for the acquisition was $2.2 million based on the fair value of Hanover (308,302 Hanover shares, which represented 1.5% of the shares of common stock at the time of the transaction, at $7.09, the closing stock price of Walter Investment) on April 17, 2009.

     The above purchase price has been allocated to the tangible assets acquired and liabilities assumed based on management’s estimates of their current fair values. Acquisition-related transaction costs, including legal and accounting fees and other external costs directly related to the Merger, were expensed as incurred.

     Prior to the acquisition, the Company loaned Hanover funds under a revolving line of credit, as well as a loan and security agreement which were automatically terminated by operation of law upon consummation of the Merger.

4. Restricted Cash

Restricted Cash

     Restricted cash totaled $8.9 million and $9.0 million at March 31, 2010 and December 31, 2009, respectively. Restricted cash includes approximately $5.9 million at March 31, 2010 and December 31, 2009 held in an insurance trust account which secures payments under the Company’s reinsurance agreements. The funds in the insurance trust account include investments in money market funds. The remaining restricted cash at March 31, 2010 and December 31, 2009 consists primarily of compensating balance requirements.

Restricted Cash of Securitization Trusts

     Restricted cash of securitization trusts relate primarily to funds collected on residential loans owned by the Company’s various securitization trusts (see Note 9), which are available only to pay expenses of the securitization trusts and principal and interest on indebtedness of the securitization trusts ($41.3 million and $42.7 million, at March 31, 2010 and December 31, 2009, respectively). Restricted cash also includes amounts to provide overcollateralization within the Company’s mortgage-backed debt arrangements. Restricted cash at March 31, 2010 and December 31, 2009 include short-term deposits in FDIC-insured accounts.

9

5. Fair Value

     Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. A three-tier fair value hierarchy is used to prioritize the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted market prices in active markets for identical assets or liabilities and the lowest priority to unobservable inputs. A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. The three levels of the fair value hierarchy are as follows:

Basis or Measurement

     Level 1 Unadjusted quoted prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.

     Level 2 Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly.

     Level 3 Prices or valuations that require inputs that are both significant to the fair value measurement and unobservable.

     The accounting guidance concerning fair value allows the Company to elect to measure certain items at fair value and report the changes in fair value through the statements of income. This election can only be made at certain specified dates and is irrevocable once made. The Company does not have a policy regarding specific assets or liabilities to elect to measure at fair value, but rather makes the election on an instrument by instrument basis as they are acquired or incurred. The Company has not made the fair value election for any financial assets or liabilities as of March 31, 2010.

     The Company determines fair value based upon quoted broker prices when available or through the use of alternative approaches, such as discounting the expected cash flows using market rates commensurate with the credit quality and duration of the investment.

Items Measured at Fair Value on a Recurring Basis

     The subordinate security is measured in the consolidated financial statements at fair value on a recurring basis in accordance with the accounting guidance concerning debt and equity securities and is categorized in the table below based upon the lowest level of significant input to the valuation (in thousands):

	March 31, 2010
	Quoted Prices in
	Active Markets				Significant
	for Identical		Significant Other		Unobservable
	Assets		Observable Inputs		Inputs
	(Level 1)		(Level 2)		(Level 3)		Total
Subordinate security	$	—	$	—	$	1,837	$	1,837
Total	$	—	$	—	$	1,837	$	1,837

     The subordinate security, acquired as part of the Merger, consists of a single, fixed-rate security backed by notes that are collateralized by manufactured housing. Approximately one-third of the notes include attached real estate on which the manufactured housing is located as additional collateral. The subordinate security has a coupon of 8.0% and a contractual maturity of 2038. The underlying notes were originated primarily in 2004 and 2005, have a weighted-average coupon rate of 9.6% and a weighted-average maturity of 19.3 years. The subordinate security has an overcollateralization level of 8.6% with a 1.1% annual loss rate.

     To estimate the fair value, the Company used a discounted cash flow approach. The significant inputs for the valuation model include the following:

• Yield: 18.5%

• Probability of default: 2.3%

• Loss severity: 55.0%

• Prepayment: 3.5%

     The following table provides a reconciliation of the beginning and ending balances of the Company’s subordinate security which is measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the three months ended March 31, 2010 (in thousands):

10

	As of and for the
	Three Months Ended
	March 31, 2010
Beginning balance	$	1,801
Principal reductions		—
Total gains (losses):
Included in net income		—
Included in other comprehensive income		36
Purchases, sales, issuances and settlements, net		—
Transfer into or out of Level 3 category		—
	$	1,837
Total gains (losses) for the period included in earnings attributable to the change in unrealized gains or losses relating to assets still held at the reporting date	$	—

Items Measured at Fair Value on a Non-Recurring Basis

     At the time a residential loan becomes real estate owned, or REO, the Company records the property at the lower of its carrying amount or estimated fair value less estimated costs to sell. Upon foreclosure and through liquidation, the Company evaluates the property’s fair value as compared to its carrying amount and records a valuation adjustment when the carrying amount exceeds fair value. Any valuation adjustment at the time the loan becomes real estate owned is charged to the allowance for loan losses.

     Carrying values, and the corresponding fair value adjustments, for Level 3 assets and liabilities measured in the consolidated financial statements at fair value on a non-recurring basis are as follows (in thousands):

	Fair Value Measurements at Reporting Date Using
			Quoted Prices in
	Real		Active Markets for		Significant Other		Significant
	Estate		Identical Assets		Observable Inputs		Unobservable Inputs		Fair Value
Fair Value at	Owned		(Level 1)		(Level 2)		(Level 3)		Adjustment
Real estate owned:
March 31, 2010	$	25,284	$	—	$	—	$	25,284	$	(5,167	)
December 31, 2009	$	21,981	$	—	$	—	$	21,981	$	(4,430	)
Real estate owned of securitization trusts:
March 31, 2010	$	36,667	$	—	$	—	$	36,667	$	(9,617	)
December 31, 2009	$	41,143	$	—	$	—	$	41,143	$	(10,615	)

     As of March 31, 2010, the fair value of the Company’s Level 3 REO was $62.0 million. These REO properties are generally located in rural areas and are primarily concentrated in Texas, Mississippi, Alabama, Florida, South Carolina and Georgia. The REO properties have a weighted-average holding period of 10 months. To estimate the fair value, the Company utilized historical loss severity rates experienced on similar REO properties previously sold by the Company. The blended loss severity utilized at March 31, 2010 was 19.2%.

Fair Value of Financial Instruments

     The following table presents the carrying values and estimated fair values of financial assets and liabilities that are required to be recorded or disclosed at fair value as of March 31, 2010 and December 31, 2009, respectively (in thousands):

	March 31, 2010				December 31, 2009
	Carrying Amount		Estimated Fair Value		Carrying Amount		Estimated Fair Value
Financial assets:
Cash and cash equivalents	$	96,302	$	96,302	$	99,286	$	99,286
Cash and short-term investments		8,901		8,901		8,963		8,963
Restricted cash of securitization trusts		41,324		41,324		42,691		42,691
Receivables, net		3,542		3,542		3,052		3,052
Residential loans, net		327,775		295,600		333,636		295,000

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	March 31, 2010				December 31, 2009
	Carrying Amount		Estimated Fair Value		Carrying Amount		Estimated Fair Value
Residential loans of securitization trusts, net		1,292,561		1,243,047		1,310,710		1,238,267
Subordinate security		1,837		1,837		1,801		1,801
Financial liabilities:
Accounts payable		477		477		13,489		13,489
Accounts payable of securitization trusts		555		555		556		556
Accrued expenses		25,438		25,438		28,296		28,296
Mortgage-backed debt, net of deferred debt issuance costs, of securitization trusts		1,226,242		1,147,056		1,249,004		1,147,142
Accrued interest of securitization trusts		8,555		8,555		8,755		8,755

     For assets and liabilities measured in the consolidated financial statements on a historical cost basis, the estimated fair value shown in the above table is for disclosure purposes only. The following methods and assumptions were used to estimate fair value:

     Cash, restricted cash and short-term investments, receivables, accounts payable, accrued expenses, and accrued interest — The estimated fair value of these financial instruments approximates their carrying value due to their high liquidity or short-term nature.

     Residential loans — The fair value of residential loans is estimated by discounting the net cash flows estimated to be generated from the asset. The discounted cash flows were determined using assumptions such as, but not limited to, interest rates, prepayment speeds, default rates, loss severities, and a risk-adjusted market discount rate. The value of these assets is very sensitive to changes in interest rates.

     Subordinate security — The fair value of the subordinate security is measured in the consolidated financial statements at fair value on a recurring basis by discounting the net cash flows estimated to be generated from the asset. Unrealized gains and losses are reported in accumulated other comprehensive income. To the extent that the cost basis exceeds the fair value and the unrealized loss is considered to be other-than-temporary, an impairment charge is recognized and the amount recorded in accumulated other comprehensive income or loss is reclassified to earnings as a realized loss.

     Mortgage-backed debt, net of deferred debt issuance costs, of securitization trusts — The fair value of mortgage-backed debt of securitization trusts is determined by discounting the net cash outflows estimated to be used to repay the debt. These obligations are to be satisfied using the proceeds from the residential loans that secure these obligations and are non-recourse to the Company. The value of mortgage-backed debt is very sensitive to changes in interest rates.

6. Residential Loans

     Residential loans, net are held for investment and consist of unencumbered residential mortgage loans and residential retail instalment agreements, summarized in the table below (in thousands):

	March 31, 2010			December 31, 2009
Residential loans, principal balance	$	360,543		$	365,797
Less: Yield adjustment, net (1)		(29,384	)		(28,701	)
Less: Allowance for loan losses		(3,384	)		(3,460	)
Residential loans, net (2)	$	327,775		$	333,636

(1)

Deferred origination costs, premiums and discounts are amortized over the life of the note portfolio. Deferred origination costs included in the yield adjustment, net for residential loans, net at March 31, 2010 and December 31, 2009 were $2.7 million and $2.8 million, respectively. Premiums and discounts, net included in the yield adjustment, net for residential loans, net at March 31, 2010 and December 31, 2009 were $35.0 million and $35.9 million, respectively.

(2)

The weighted average life of the portfolio approximates 10 years based on assumptions for prepayment speeds, default rates and losses.

     The following table summarizes the activity in the allowance for loan losses on residential loans, net (in thousands):

	Three Months Ended
	March 31,
	2010			2009
Balance, December 31	$	3,460		$	3,418
Provision charged to income		1,399			1,269
Less: Charge-offs, net of recoveries		(1,475	)		(1,314	)
Balance, March 31	$	3,384		$	3,373

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     The amount of residential loans, net that had been put on nonaccrual status due to delinquent payments of 90 days past due or greater was $18.8 million and $21.4 million at March 31, 2010 and December 31, 2009, respectively. Residential loans are placed on non-accrual status when any portion of the principal or interest is 90 days past due. When placed on non-accrual status, the related interest receivable is reversed against interest income of the current period. Residential loans are removed from non-accrual status when the amount financed and the associated interest are no longer over 90 days past due.

     The following table presents delinquencies as a percent of amounts outstanding on the principal balance of residential loans, net:

	March 31, 2010			December 31, 2009
31-60 days		1.62	%		1.98	%
61-90 days		0.83	%		1.53	%
91 days or more		5.21	%		5.84	%
		7.66	%		9.35	%

7. Residential Loans of Securitization Trusts

     Residential loans of securitization trusts, net consist of residential mortgage loans and residential retail instalment agreements that the Company has securitized in structures that are accounted for as financings. These securitizations are structured legally as sales, but for accounting purposes are treated as financings under the accounting guidance concerning transfers of financial assets, as amended. Accordingly, the loans in these securitizations remain on the balance sheet as residential loans. Given this treatment, retained interests are not created, and securitization mortgage-backed debt is reflected on the balance sheet as a liability. The assets of the securitization trusts are not available to satisfy claims of general creditors of the Company and the mortgage-backed debt issued by the securitization trusts is to be satisfied solely from the proceeds of the residential loans of securitization trusts and are non-recourse to the Company. The Company records interest income on residential loans of securitization trusts and interest expense on mortgage-backed debt issued in the securitizations over the life of the securitizations. Deferred debt issuance costs and discounts related to the mortgage-backed debt are amortized on a level yield basis over the estimated life of the mortgage-backed debt.

     Residential loans of securitization trusts, net are summarized as follows (in thousands):

	March 31, 2010			December 31, 2009
Residential loans of securitization trusts, principal balance	$	1,432,403		$	1,454,062
Less: Yield adjustment, net (1)		(125,902	)		(129,151	)
Less: Allowance for loan losses		(13,940	)		(14,201	)
Residential loans of securitization trusts, net (2)	$	1,292,561		$	1,310,710

(1)

Deferred origination costs, premiums and discounts are amortized over the life of the note portfolio. Deferred origination costs included in the yield adjustment, net for residential loans of securitization trusts, net at March 31, 2010 and December 31, 2009 were $8.6 million and $8.8 million, respectively. Premiums and discounts, net included in the yield adjustment, net for residential loans of securitization trusts, net at March 31, 2010 and December 31, 2009 were $142.3 million and $145.8 million, respectively.

(2)

The weighted average life of the portfolio approximates 8 years based on assumptions for prepayment speeds, default rates and losses.

     The following table summarizes the activity in the allowance for loan losses on residential loans of securitization trusts, net (in thousands):

	Three Months Ended
	March 31,
	2010			2009
Balance, December 31	$	14,201		$	15,551
Provision charged to income		1,791			3,107
Less: Charge-offs, net of recoveries		(2,052	)		(3,549	)
Balance, March 31	$	13,940		$	15,109

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     The amount of residential loans of securitization trusts, net that had been put on nonaccrual status due to delinquent payments of 90 days past due or greater was $32.9 million and $39.8 million at March 31, 2010 and December 31, 2009, respectively. Residential loans are placed on non-accrual status when any portion of the principal or interest is 90 days past due. When placed on non-accrual status, the related interest receivable is reversed against interest income of the current period. Residential loans are removed from non-accrual status when the amount financed and the associated interest are no longer over 90 days past due.

     All of the Company’s residential loans of securitization trusts, net are pledged as collateral for the mortgage-backed debt (see Note 9). The Company’s only continued involvement with the residential loans of securitization trusts, net is retaining all of the beneficial interests in the securitization trusts and servicing the residential loans collateralizing the mortgage-backed debt.

     The following table presents delinquencies as a percent of amounts outstanding on the principal balance of residential loans of securitization trusts:

	March 31, 2010			December 31, 2009
31-60 days		0.73	%		1.17	%
61-90 days		0.31	%		0.54	%
91 days or more		2.30	%		2.74	%
		3.34	%		4.45	%

8. Subordinate Security

     The Company’s subordinate security totaled $1.8 million at March 31, 2010 and December 31, 2009. The subordinate security was acquired as part of the Merger with Hanover. Subordinate security is summarized as follows (in thousands):

	March 31, 2010			December 31, 2009
Principal balance	$	3,812		$	3,812
Purchase price and other adjustments		(2,200	)		(2,200	)
Amortized cost	$	1,612		$	1,612
Unrealized gain		225			189
Carrying value (fair value)	$	1,837		$	1,801

     Actual maturities on mortgage-backed securities are generally shorter than the stated contractual maturities because the actual maturities are affected by the contractual lives of the underlying notes, periodic payments of principal, and prepayments of principal. The contractual maturity of the subordinate security is 2038.

9. Mortgage-Backed Debt and Related Collateral of Securitization Trusts

Mortgage-Backed Debt

     Mortgage-backed debt consists of mortgage-backed/asset-backed notes and collateralized mortgage obligations issued by the Company to fund its residential loans via the securitization market. The securitization trusts beneficially owned by WIMC and its wholly owned subsidiary, Mid-State Capital, LLC, or Mid-State Capital, are the depositors under the Company’s outstanding mortgage-backed and asset-backed notes (the “Trust Notes”), which consist of eight separate series of public debt offerings and one private offering. Hanover Capital Grantor Trust, acquired from Hanover as part of the Merger, is a public debt offering. These ten trusts have an aggregate of $1.2 billion of outstanding debt, collateralized by $1.5 billion of assets, including residential loans, REO and restricted cash. All of the Company’s mortgage-backed debt is non-recourse and not cross-collateralized and, therefore, must be satisfied exclusively from the proceeds of the residential loans and REO held in each securitization trust. The Company services the collateral underlying the nine securitization trusts owned by WIMC and Mid-State Capital.

     The securitization trusts contain provisions that require the cash payments received from the underlying residential loans be applied to reduce the principal balance of the Trust Notes unless certain overcollateralization or other similar targets are satisfied. The securitization trusts also contain delinquency and loss triggers, that, if exceeded, require that any excess overcollateralization be paid to reduce the outstanding principal balance of the Trust Notes for that particular securitization at an accelerated pace. Assuming no servicer trigger events have occurred and the overcollateralization targets have been met, any excess cash is released to the Company either monthly or quarterly, in accordance with the terms of the respective underlying trust agreements. As of March 31, 2010, two of the Company’s securitization trusts exceeded certain triggers and did not provide any significant levels of excess cash flow to the Company during the three months ended March 31, 2010.

     Borrower remittances received on the residential loan collateral are used to make payments on the mortgage-backed debt. The maturity of the mortgage-backed debt is directly affected by principal prepayments on the related residential loan collateral. As a result, the actual maturity of the mortgage-backed debt is likely to occur earlier than the stated maturity. Certain of the Company’s

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mortgage-backed debt is also subject to redemption at the option of the Company according to specific terms of the respective indenture agreements.

Collateral for Mortgage-Backed Debt

     The following table summarizes the carrying value of the collateral for the mortgage-backed debt as of March 31, 2010 and December 31, 2009, respectively (in thousands):

	March 31, 2010		December 31, 2009
Residential loans of securitization trusts, principal balance	$	1,432,403	$	1,454,062
Restricted cash of securitization trusts		41,324		42,691
Real estate owned of securitization trusts		36,667		41,143
Total mortgage-backed debt collateral of securitization trusts	$	1,510,394	$	1,537,896

10. Share-Based Compensation Plans

     The Company’s share-based expense has been reflected in the consolidated statements of income in salaries and benefits expense.

Option Activity

     On January 4, 2010, certain executive officers of the Company were awarded a total of 118,651 nonqualified options, or the Executive Options, to acquire common stock of the Company pursuant to the 2009 LTIP. The Executive Options granted to each executive officer of the Company will vest and become exercisable in equal installments on the first, second and third anniversary of the date of grant. The exercise price of $14.39 for each of the Executive Options was determined based on the mean of the high and low sales prices for a share of common stock of the Company as reported by the NYSE Amex on the date of grant.

     On January 22, 2010, an executive, in connection with his employment with the Company, was awarded a total of 90,000 nonqualified options to acquire common stock of the Company pursuant to the 2009 LTIP. The options granted will vest and become exercisable on the fourth anniversary of the award. The exercise price of $14.29 for each option was determined based on the mean of the high and low sales prices for a share of common stock of the Company as reported by the NYSE Amex on the date of grant.

     On March 3, 2010, the Company granted stock options to its new non-employee director who was awarded a total of 5,195 nonqualified options to acquire common stock of the Company pursuant to the 2009 LTIP. The options granted will vest and become exercisable in equal installments on the first, second and third anniversary of the date of grant. The exercise price of $14.79 for each option was determined based on the mean of the high and low sales prices for a share of common stock of the Company as reported by the NYSE Amex on the date of grant.

     The grant date fair value of the stock options granted during the three months ended March 31, 2010 approximated $0.6 million.

Non-Vested Share Activity

     The Company’s non-vested share-based awards consist of restricted stock and restricted stock units.

     On January 4, 2010, certain executive officers of the Company were awarded a total of 100,548 restricted stock units, or the Executive RSUs, of the Company pursuant to the 2009 LTIP. The Executive RSUs granted to each executive officer of the Company will vest in equal installments on the first, second and third anniversary of the date of grant, and each such Executive RSU vested on such date will be paid out with a single share of common stock of the Company. Each executive receiving Executive RSUs will be entitled to receive cash payments equivalent to any dividend paid to the holders of common stock of the Company, but they will not be entitled to any voting rights otherwise associated with the common stock.

     On January 22, 2010, an executive, in connection with his employment with the Company, was awarded a total of 135,556 restricted stock units, or RSUs, of the Company under the 2009 LTIP. Of the RSUs granted, 110,000 will vest in equal installments on the first, second and third anniversary of the date of grant. The settlement date for these RSUs is January 22, 2013, and each such RSU vested on such date will be paid out with a single share of common stock of the Company. The remaining 25,556 RSUs granted will vest on the first anniversary of the date of grant. The settlement date for these RSUs is March 14, 2011, and each such RSU vested on such date will be paid out with a single share of common stock of the Company. The executive receiving the RSUs will be entitled to receive cash payments equivalent to any dividend paid to the holders of common stock of the Company, but they will not be entitled to any voting rights otherwise associated with the common stock.

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     The grant date fair value of RSUs granted during the three months ended March 31, 2010 approximated $3.4 million.

11. Credit Agreements

     On April 20, 2009, the Company entered into a syndicated credit agreement, a revolving credit agreement and security agreement, and a support letter of credit agreement. All three of these agreements mature on April 20, 2011. As of March 31, 2010, no funds have been drawn under any of the credit agreements and the Company is in compliance with all covenants.

12. Transactions with Walter Energy

     Following the spin-off, Walter Investment and Walter Energy have operated independently, and neither has any ownership interest in the other. In order to govern certain of the ongoing relationships between the Company and Walter Energy after the spin-off and to provide mechanisms for an orderly transition, the Company and Walter Energy entered into certain agreements, pursuant to which (a) the Company and Walter Energy provide certain services to each other, (b) the Company and Walter Energy will abide by certain non-compete and non-solicitation arrangements, and (c) the Company and Walter Energy will indemnify each other against certain liabilities arising from their respective businesses. The specified services that the Company and Walter Energy may provide each other, as requested, include tax and accounting services, certain human resources services, communications systems and support, and insurance/risk management. Each party will be compensated for services rendered, as set forth in the Transition Services Agreement. The Transition Services Agreement provides for terms not to exceed 24 months for the various services, with some of the terms capable of extension. See Note 3 for further information regarding the spin-off transaction.

13. Comprehensive Income and Accumulated Other Comprehensive Income

     The components of comprehensive income are as follows (in thousands):

	Three Months Ended
	March 31,
	2010			2009
Net income	$	8,112		$	7,202
Other comprehensive income (loss):
Change in postretirement benefit plans, net of $7 tax effect		(126	)		—
Net unrealized gain on subordinate security, net of $0 tax effect		36			—
Net amortization of realized gain on closed hedges, net of $0 and $30 tax effect, respectively		(64	)		(51	)
Comprehensive income	$	7,958		$	7,151

     The components of accumulated other comprehensive income are as follows (in thousands):

	Excess of
	Additional
	Postretirement			Net Unrealized Gain		Net Amortization of
	Employee Benefits			on Subordinate		Realized Gain on
	Liability			Security		Closed Hedges			Total
Balance at December 31, 2009	$	1,117		$	189	$	637		$	1,943
Pre-tax amount		(133	)		36		(64	)		(161	)
Tax benefit		7			—		—			7
Balance at March 31, 2010	$	991		$	225	$	573		$	1,789

14. Common Stock and Earnings Per Share

     In accordance with the accounting guidance concerning earnings per share, or EPS, unvested share-based payment awards that include non-forfeitable rights to dividends or dividend equivalents, whether paid or unpaid, are considered participating securities. As a result, the awards are required to be included in the calculation of basic earnings per common share pursuant to the “two-class” method. For the Company, participating securities are comprised of certain unvested restricted stock and restricted stock units.

     Under the two-class method, net income is reduced by the amount of dividends declared in the period for common stock and participating securities. The remaining undistributed earnings are then allocated to common stock and participating securities as if all of the net income for the period had been distributed. Basic earnings per share excludes dilution and is calculated by dividing net income allocable to common shares by the weighted-average number of common shares outstanding for the period. Diluted earnings per share is calculated by dividing net income allocable to common shares by the weighted-average number of common shares for the period, as adjusted for the potential dilutive effect of non-participating share-based awards.

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     The following is a reconciliation of the numerators and denominators of the basic and diluted EPS computations shown on the face of the accompanying consolidated statements of income (in thousands, except per share data):

	Three Months Ended March 31,
	2010			2009
Basic earnings per share:
Net income	$	8,112		$	7,202
Less: net income allocated to unvested restricted stock units		(113	)		—
Net income available to common stockholders (numerator)	$	7,999		$	7,202
Weighted-average common shares outstanding		25,657			19,871
Add: vested restricted stock units		686			—
Total weighted-average common shares outstanding (denominator)		26,343			19,871
Basic earnings per share	$	0.30		$	0.36
Diluted earnings per share:
Net income	$	8,112		$	7,202
Less: net income allocated to unvested restricted stock units		(113	)		—
Net income available to common stockholders (numerator)	$	7,999		$	7,202
Weighted-average common shares outstanding		25,657			19,871
Add: Potentially dilutive stock options and restricted stock units		746			—
Diluted weighted-average common shares outstanding (denominator)		26,403			19,871
Diluted earnings per share	$	0.30		$	0.36

     The calculation of diluted earnings per share for the three months ended March 31, 2010 does not include 0.2 million shares because their effect would have been anti-dilutive. There were no anti-dilutive shares for the three months ended March 31, 2009.

15. REIT Qualification

     The Company has elected to be taxed as a REIT under the Internal Revenue Code of 1986, as amended. The Company’s continuing qualification as a REIT depends on its ability to meet the various requirements imposed by the Code, which relate to organizational structure, distribution levels, diversity of stock ownership and certain restrictions with regard to owned assets and categories of income. As a REIT, the Company will generally not be subject to United States, or U.S., federal corporate income tax on its taxable income that is currently distributed to stockholders.

     Even as a REIT, the Company may be subject to U.S. federal income and excise taxes in various situations, such as on the Company’s undistributed income.

     Certain of the Company’s operations or portions thereof, including mortgage advisory and insurance ancillary businesses, are conducted through taxable REIT subsidiaries, or TRSs. A TRS is a C-corporation that has not elected REIT status and, as such, is subject to U.S. federal corporate income tax. The Company’s TRSs facilitate its ability to offer certain services and conduct activities that generally cannot be offered directly by the REIT. The Company also will be required to pay a 100% tax on any net income on non-arm’s length transactions between the REIT and any of its TRSs.

16. Income Taxes

     The Company recorded income tax expense of $0.1 million for the three months ended March 31, 2010. During the three months ended March 31, 2010 and 2009, an estimated tax rate of 1.6% and 36.6%, respectively, was used to derive income tax expense of $0.1 million and $4.2 million, respectively, calculated on our income from operations, before taxes, of $8.2 million and $11.4 million, respectively. The decrease in income tax expense was due to the Company’s REIT qualification in conjunction with the spin-off from Walter Energy and Merger with Hanover which resulted in only the Company’s TRSs being taxable entities.

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     The Company recognizes tax benefits in accordance with the FASB guidance concerning uncertainty in income taxes. This guidance establishes a “more-likely-than-not” recognition threshold that must be met before a tax benefit can be recognized in the financial statements. As of March 31, 2010 and December 31, 2009, the total gross amount of unrecognized tax benefits was $7.7 million.

17. Commitments and Contingencies

Securities Sold with Recourse

     In October 1998, Hanover sold 15 adjustable-rate FNMA certificates and 19 fixed-rate FNMA certificates that the Company received in a swap for certain adjustable-rate and fixed-rate mortgage loans. These securities were sold with recourse. Accordingly, the Company retains credit risk with respect to the principal amount of these mortgage securities. As of March 31, 2010, the unpaid principal balance of the 15 remaining mortgage securities was approximately $1.7 million.

Employment Agreements

     At March 31, 2010, the Company had employment agreements with its senior officers, with varying terms that provide for, among other things, base salary, bonus, and change-in-control provisions that are subject to the occurrence of certain triggering events.

Bayport Plaza Lease

     On May 1, 2009, the Company entered into a sublease with Municipal Mortgage & Equity, LLC to secure the Company’s corporate headquarters located at 3000 Bayport Drive, Suite 1100, Tampa, Florida 33607. The lease commenced on May 15, 2009 and expires on April 29, 2016. The base rent over the lease term is $4.0 million.

Income Tax Exposure

     A dispute exists with regard to federal income taxes owed by the Walter Energy consolidated group. The Company was part of the Walter Energy consolidated group prior to the spin-off and Merger. As such, the Company is jointly and severally liable with Walter Energy for any final taxes, interest and/or penalties owed by the Walter Energy consolidated group during the time that the Company was a part of the Walter Energy consolidated group. According to Walter Energy’s most recent public filing, they state that a controversy exists with regard to federal income taxes allegedly owed by Walter Energy for fiscal years ended August 31, 1983 through May 31, 1994, and the amount of tax claimed by the IRS in an adversary proceeding in bankruptcy court, including interest and penalties, is substantial. The public filing goes on to disclose that Walter Energy believes, should the IRS prevail on any such issues, Walter Energy’s financial exposure is limited to interest and possible penalties. Walter Energy discloses further that it believes that all of its current and prior tax filing positions have substantial merit and it intends to defend vigorously any tax claims asserted. Under the terms of the Tax Separation Agreement between the Company and Walter Energy dated April 17, 2009, Walter Energy is responsible for the payment of all federal income taxes (including any interest or penalties applicable thereto) of the consolidated group, which includes the aforementioned claims of the IRS. However, to the extent that Walter Energy is unable to pay any amounts owed, the Company could be responsible for any unpaid amounts.

     The Tax Separation Agreement also provides that Walter Energy is responsible for the preparation and filing of any tax returns for the consolidated group for the periods when the Company was part of the Walter Energy consolidated group. This arrangement may result in conflicts between Walter Energy and the Company. In addition, the spin-off of WIM from Walter Energy was intended to qualify as a tax-free spin-off under Section 355 of the Code. The Tax Separation Agreement provides generally that if the spin-off is determined not to be tax-free pursuant to Section 355 of the Code, any taxes imposed on Walter Energy or a Walter Energy shareholder as a result of such determination (“Distribution Taxes”) which are the result of the acts or omissions of Walter Energy or its affiliates, will be the responsibility of Walter Energy. However, should Distribution Taxes result from the acts or omissions of the Company or its affiliates, such Distribution Taxes will be the responsibility of the Company. The Tax Separation Agreement goes on to provide that Walter Energy and the Company shall be jointly liable, pursuant to a designated allocation formula, for any Distribution Taxes that are not specifically allocated to Walter Energy or the Company. To the extent that Walter Energy is unable or unwilling to pay any Distribution Taxes for which it is responsible under the Tax Separation Agreement, the Company could be liable for those taxes as a result of being a member of the Walter Energy consolidated group for the year in which the spin-off occurred. The Tax Separation Agreement also provides for payments from Walter Energy in the event that an additional taxable dividend is required to cure a REIT disqualification from the determination of a shortfall in the distribution of non-REIT earnings and profits made immediately following the spin-off. As with Distribution Taxes, the Company will be responsible for this dividend if Walter Energy is unable or unwilling to pay.

Miscellaneous Litigation

     The Company is a party to a number of lawsuits arising in the ordinary course of its business. While the results of such litigation cannot be predicted with certainty, the Company believes that the final outcome of such litigation will not have a materially adverse effect on the Company’s financial condition, results of operations or cash flows.

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18. Subsequent Events

Purchase of a Pool of Loans

     On April 14, 2010, the Company entered into a definitive agreement to purchase a pool of 100% performing, fixed-rate residential loans on single-family, owner occupied residences located within the Company’s existing southeastern United States geographic footprint. The purchase closed on April 19, 2010, utilizing $11.1 million of the proceeds from the Company’s secondary offering that closed on October 21, 2009. The Company is in the process of evaluating the loans acquired for evidence of credit quality deterioration since origination and for which it is probable at the purchase date that the Company will be unable to collect all contractually required payments.

Dividend Declaration

     On April 30, 2010, the Company declared a dividend of $0.50 per share on its common stock to stockholders of record on May 14, 2010 which will be paid on May 28, 2010.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

     The following discussion should be read in conjunction with the consolidated financial statements and notes thereto appearing elsewhere in this Form 10-Q and in our results for the year ended December 31, 2009, filed in our Annual Report on Form 10-K on March 2, 2010. Historical results and trends which might appear should not be taken as indicative of future operations. Our results of operations and financial condition, as reflected in the accompanying statements and related footnotes, are subject to management’s evaluation and interpretation of business conditions, changing capital market conditions, and other factors.

     Our website can be found at www.walterinvestment.com. We make available, free of charge through the investor relations section of our website, access to our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, current reports on Form 8-K, other documents and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, as well as proxy statements, as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC. We also make available, free of charge, access to our Corporate Governance Standards, charters for our Audit Committee, Compensation and Human Resources Committee, and Nominating and Corporate Governance Committee, and our Code of Conduct governing our directors, officers, and employees. Within the time period required by the SEC and the New York Stock Exchange, we will post on our website any amendment to the Code of Conduct and any waiver applicable to any executive officer, director, or senior officer (as defined in the Code of Conduct). In addition, our website includes information concerning purchases and sales of our equity securities by our executive officers and directors, as well as disclosure relating to certain non-GAAP and financial measures (as defined by SEC Regulation G) that we may make public orally, telephonically, by webcast, by broadcast, or by similar means from time to time. The information on our website is not part of this Quarterly Report on Form 10-Q.

     Our Investor Relations Department can be contacted at 3000 Bayport Drive, Suite 1100, Tampa, FL 33607, Attn: Investor Relations, telephone (813) 421-7694.

Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995

     Certain statements in this report, including, without limitation, matters discussed under Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” should be read in conjunction with the financial statements, related notes, and other detailed information included elsewhere in this Quarterly Report on Form 10-Q. We are including this cautionary statement to make applicable and take advantage of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. 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,” or other similar expressions. Such forward-looking statements involve known and unknown risks, uncertainties and other important factors, which could cause actual results, performance or achievements to differ materially from future results, performance or achievements. 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 in our Annual Report on Form 10-K filed on March 2, 2010 under the caption “Risk Factors” and in our other securities filings with the SEC.

     In particular (but not by way of limitation), the following important factors and assumptions could affect our future results and could cause actual results to differ materially from those expressed in the forward-looking statements: local, regional, national and global economic trends and developments in general, and local, regional and national real estate and residential mortgage market trends and developments in particular; the availability of suitable qualifying investments for the proceeds of our October 2009 secondary offering and risks associated with any such investments we may pursue; the availability of additional investment capital and suitable qualifying investments, and risks associated with the expansion of our business activities, including risks associated with expanding our business outside of our current geographic footprint and/or expanding the scope of our business to include activities not currently undertaken by our business; limitations imposed on our business due to our real estate investment trust, or REIT, status and our continued qualification as a REIT for federal income tax purposes; financing sources and availability, and future interest expense; fluctuations in interest rates and levels of mortgage prepayments; increases in costs and other general competitive factors; natural disasters and adverse weather conditions, especially to the extent they result in material payouts under insurance policies placed with our captive insurance subsidiary; changes in federal, state and local policies, laws and regulations affecting our business, including, without limitation, mortgage financing or servicing, changes to licensing requirements, and/or the rights and obligations of property owners, mortgagees and tenants; the effectiveness of risk management strategies; unexpected losses resulting from pending, threatened or unforeseen litigation or other third party claims against us; the ability or willingness of Walter Energy, Inc. and other counterparties to satisfy material obligations under agreements with us; our continued listing on the NYSE Amex; uninsured losses or losses in excess of insurance limits and the availability of adequate insurance coverage at reasonable costs; the integration of the former Hanover Capital Mortgage Holdings, Inc., or Hanover, business into that of Walter Investment Management, LLC and its affiliates as a result of the merger of the two companies, and the realization of anticipated synergies, cost savings and growth opportunities from the Merger; future performance generally; and other presently unidentified factors.

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     All forward looking statements set forth herein are qualified by these cautionary statements and are made only as of the date hereof. We undertake no obligation to update or revise the information contained herein, including without limitation any forward-looking statements whether as a result of new information, subsequent events or circumstances, or otherwise, unless otherwise required by law.

The Company

     We are a mortgage servicer and mortgage portfolio owner specializing in subprime, non-conforming and other credit-challenged residential loans primarily in the southeastern United States, or U.S. We also operate mortgage advisory and insurance ancillary businesses. At March 31, 2010, we had four wholly owned, primary subsidiaries: Hanover Capital Partners 2, Ltd., doing business as Hanover Capital, Walter Mortgage Company, or WMC, Best Insurors, Inc., or Best, Walter Investment Reinsurance Co., Ltd., or WIRC. We operate as an internally managed, publicly traded real estate investment trust, or REIT.

Basis of Presentation

     The consolidated financial statements reflect the historical operations of the Financing business which was operated as part of Walter Energy prior to the spin-off. Under Walter Energy’s ownership, the Financing business operated through separate subsidiaries. A direct ownership relationship did not exist among the legal entities prior to the contribution to Walter Investment Management LLC, or WIM. The consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States, or GAAP, which requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements. Actual results could differ from those estimates. All significant intercompany balances have been eliminated in the consolidated financial statements.

     Although we have operated as an independent, stand-alone entity only since April 17, 2009, management believes the assumptions underlying the consolidated financial statements as of March 31, 2009 are reasonable. However, the consolidated financial statements included herein do not include all of the expenses that would have been incurred had we been a separate, stand-alone entity, although, the consolidated financial statements do include certain costs and expenses that have been allocated to us from Walter Energy. As such, the financial information does not necessarily reflect or is not necessarily indicative of our consolidated financial position, results of operations and cash flows in the future, or what would have been reflected had we been a separate, stand-alone entity during the period presented prior to the Merger.

     Results of operations for the three months ended March 31, 2010 and 2009 include the results of operations of legacy WIM. The results of operations of legacy Hanover are included for the three months ended March 31, 2010. Since the Merger constitutes a reverse acquisition for accounting purposes, the pre-acquisition consolidated financial statements of WIM are treated as the historical financial statements of Walter Investment. The combined financial statements of WMC, Best and WIRC (collectively representing substantially all of Walter Energy’s Financing business prior to the Merger) are considered the predecessor to WIM for accounting purposes. The combined financial statements of WMC, Best and WIRC have become WIM’s historical financial statements for periods prior to the Merger.

Business Separation and Merger

     On September 30, 2008, Walter Energy outlined its plans to separate its Financing business from its core Natural Resources business through a spin-off to stockholders and subsequent Merger with Hanover. In furtherance of these plans, on September 30, 2008, Walter Energy and WIM entered into a definitive agreement to merge with Hanover which agreement was amended and restated on February 17, 2009. Immediately prior to the spin-off, substantially all of the assets and liabilities related to the Financing business were contributed, through a series of transactions, to WIM in return for all of WIM’s membership units. On April 17, 2009, immediately following the spin-off from Walter Energy, WIM was merged with and into Hanover with Hanover continuing as the surviving corporation in the Merger. Following the Merger, Hanover was renamed Walter Investment Management Corp. After the spin-off and Merger, Walter Energy’s stockholders that became members of WIM as a result of the spin-off, and certain holders of options to acquire limited liability company interests of WIM, collectively owned 98.5% of the shares of common stock of the surviving corporation in the Merger, while stockholders of Hanover owned 1.5% of the shares of common stock of such corporation. As a result, the business combination has been accounted for as a reverse acquisition, with WIM considered the accounting acquirer. On April 20, 2009, our common stock began trading on the NYSE Amex under the symbol “WAC”.

     Although Hanover was the legal and tax surviving entity in the Merger, for accounting purposes the Merger was treated as a reverse acquisition of the operations of Hanover and has been accounted for pursuant to the guidance concerning business combinations, with WIM as the accounting acquirer. As such, the pre-acquisition financial statements of WIM are treated as the historical financial statements of Walter Investment. The Hanover assets acquired and the liabilities assumed were recorded at the date of acquisition, April 17, 2009, at their respective fair values. The results of operations of Hanover were included in the consolidated statements of income for periods subsequent to the Merger.

     On April 17, 2009, we completed our separation from Walter Energy. In connection with the separation, WIM and Walter Energy executed the following transactions or agreements which involved no cash:

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• Walter Energy distributed 100% of its interest in WIM to holders of Walter Energy’s common stock;

• All intercompany balances between WIM and Walter Energy were settled with the net balance recorded as a dividend to Walter Energy;

• In accordance with the Tax Separation Agreement, Walter Energy will, in general, be responsible for any and all taxes reported on any joint return through the date of the separation, which may also include WIM for periods prior to the separation. WIM will be responsible for any and all taxes reported on any WIM separate tax return and on any consolidated returns for Walter Investment subsequent to the separation;

• Walter Energy’s share-based awards held by WIM employees were converted to equivalent share-based awards of Walter Investment, with the number of shares and the exercise price being equitably adjusted to preserve the intrinsic value. The conversion was accounted for as a modification under the provisions of the guidance concerning stock compensation.

     The assets and liabilities transferred to WIM from Walter Energy also included $26.6 million in cash, which was contributed to WIM by Walter Energy on April 17, 2009. Following the spin-off, WIM paid a taxable dividend consisting of cash of $16.0 million and additional equity interests to its members. The Merger occurred immediately following the spin-off and taxable dividend on April 17, 2009. The surviving company continues to operate as a publicly traded REIT subsequent to the Merger.

Critical Accounting Policies

     The significant accounting policies used in preparation of our consolidated financial statements are described in Note 2 of “Notes to Consolidated Financial Statements” for the year ended December 31, 2009 included in our Annual Report on Form 10-K filed with the SEC on March 2, 2010. There have been no material changes to our critical accounting policies or the methodologies or assumptions we apply under them.

Results of Operations

Revenue by Portfolio Type

     For the three months ended March 31, 2010 and 2009, we reported net income of $8.1 million and $7.2 million, respectively. The main components of the change in net income for the three months ended March 31, 2010 and 2009 are detailed in the following table (in thousands):

	Three Months Ended
	March 31,				Increase/
	2010		2009		(Decrease)
Residential loans
Interest income	$	7,714	$	8,928	$	(1,214	)
Less: Interest expense		—		—		—
Net interest income		7,714		8,928		(1,214	)
Less: Provision for loan losses (1)		1,399		1,269		130
Net interest income after provision for loan losses		6,315		7,659		(1,344	)
Residential loans of securitization trusts
Interest income		33,914		36,901		(2,987	)
Interest expense		21,274		23,089		(1,815	)
Net interest income		12,640		13,812		(1,172	)
Less: Provision for loan losses (1)		1,791		3,107		(1,316	)

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	Three Months Ended
	March 31,				Increase/
	2010		2009		(Decrease)
Net interest income after provision for loan losses		10,849		10,705		144
Non-interest income
Premium revenue		2,691		3,065		(374	)
Other income, net		760		160		600
Total		3,451		3,225		226
Total revenues, net		20,615		21,589		(974	)
Total non-interest expenses		12,372		10,232		2,140
Income before income taxes		8,243		11,357		(3,114	)
Income tax expense		131		4,155		(4,024	)
Net income	$	8,112	$	7,202	$	910

(1) Excludes the impact of the REO sale from the securitized residential loan portfolio to the unencumbered residential loan portfolio.

Net Interest Income

     The decrease in unencumbered residential loan net interest income for the three months ended March 31, 2010, as compared to the same period in 2009 was due primarily to the declining portfolio balance as a result of principal repayments and foreclosures and a decrease in the volume of voluntary prepayments. The average prepayment rate for the unencumbered portfolio was 3.0% for the three months ended March 31, 2010, as compared to 4.5% in the same period of 2009.

     The decrease in the securitized residential loan net interest income for the three months ended March 31, 2010, as compared to the same period in 2009 was due primarily to the declining balance as a result of principal repayments and foreclosures, a decrease in voluntary prepayments and a decrease in interest expense due to lower average outstanding borrowings. The average prepayment rate for the securitized portfolio was 2.6% for the three months ended March 31, 2010, as compared to 3.3% in the same period of 2009. The reduction in average borrowings was due to principal payments on the mortgage-backed debt issued with no new issuances over the past year.

Provision for Loan Losses

     The unencumbered residential loan provision for loan losses was relatively unchanged for the three months ended March 31, 2010, as compared to the same period in 2009 due to an improvement in the performance experienced by this portfolio.

     The decrease in the securitized residential loan provision for loan losses for the three months ended March 31, 2010, as compared to the same period in 2009 was primarily due to a decline in seriously delinquent accounts and foreclosures in process as well as an improvement in the net charge-off ratio experienced by this portfolio.

Non-Interest Income

     The increase in non-interest income for the three months ended March 31, 2010, as compared to the same period in 2009 was primarily due to the addition of mortgage advisory services revenue as a result of our Merger with Hanover in April 2009 as well as an improvement in taxes, insurance and other advances as a result of lower insurance advances and a slight increase in collections, partially offset by lower earned premiums from our insurance business.

Non-Interest Expenses

     The increase in non-interest expenses for the three months ended March 31, 2010, as compared to the same period in 2009 was primarily due to the additional expenses incurred in order to support the stand-alone corporate functions required subsequent to the spin-off from Walter Energy and Merger with Hanover, as well as the timing of compensation expense associated with share-based awards. Share-based awards were granted during the first quarter in 2010 versus the second quarter in 2009. Share-based award compensation expense is recognized over the vesting term, which is generally three years, using the graded method.

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Income Taxes

     The decrease in income tax expense for the three months ended March 31, 2010, as compared to the same period in 2009 was due to our REIT qualification in conjunction with the spin-off from Walter Energy and Merger with Hanover which generally limits our income tax expense to our TRSs.

Residential Loan Portfolio and Related Liabilities

     Our results of operations for our portfolio during a given period typically reflect the net interest spread earned on our residential loan portfolio. The net interest spread is impacted by factors such as the interest rate our residential loans are earning and our cost of funds. Furthermore, the amount of discount on the residential loans will impact the net interest spread as such amounts will be amortized over the expected term of the residential loans and the amortization will be accelerated due to voluntary prepayments. Loan losses due to defaults will also negatively impact our earnings.

Residential Loan Portfolio

     The following table reflects the average balances of our unencumbered residential loan portfolio, net with corresponding rates of interest and effective yields (in thousands):

	Three Months Ended March 31,
	2010			2009
Average residential loan balance (1)	$	334,128		$	363,211
Interest income	$	7,714		$	8,928
Effective interest income yield on the residential loan portfolio (2)		9.23	%		9.83	%

(1)	Average residential loan balance is net of yield adjustments and gross of allowance for losses for the period.
(2)	Results have been annualized.

Interest Income

     Net interest income decreased for the three months ended March 31, 2010, as compared to the same period in 2009, primarily due to the declining portfolio balance as a result of principal repayments and foreclosures and a decrease in the volume of voluntary prepayments.

Effective Interest Income Yield

     Effective interest income yield decreased for the three months ended March 31, 2010, compared to the same period in 2009. This decrease is primarily due to a decrease in voluntary prepayment speeds which resulted in a decrease in the recognition of purchase discounts into interest income.

Securitized Residential Loan Portfolio

     The following table reflects the average balances of our securitized residential loan portfolio, net, as well as associated liabilities, with corresponding rates of interest and effective yields (in thousands):

	Three Months Ended March 31,
	2010		2009
Average securitized residential loan balance (1)	$	1,315,706	$	1,409,975
Average mortgage-backed debt balance		1,255,917		1,358,991
Net investment	$	59,789	$	50,984
Interest income	$	33,914	$	36,901
Less: Interest expense		21,274		23,089
Net interest income	$	12,640	$	13,812

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	Three Months Ended March 31,
	2010			2009
Effective interest income yield on the securitized residential loan portfolio (2)		10.31	%		10.47	%
Effective interest expense rate on the mortgage-backed debt (2)		6.78	%		6.80	%
Net interest spread (2)		3.53	%		3.67	%
Average equity balance		572,623			411,441
Average leverage ratio (3)		2.19			3.30
Net interest margin (2)(4)		3.84	%		3.92	%
Net yield on net investment (2)(5)		84.56	%		108.37	%

(1)	Average securitized residential loan balance is net of yield adjustments and gross of allowance for losses for the period.
(2)	Results have been annualized.
(3)	Average leverage ratio is calculated as average mortgage-backed debt balance divided by average equity.
(4)	Net interest margin is calculated by dividing net interest income by the average securitized residential loan balance.
(5)	Net yield on net investment is calculated by dividing net interest income by the net investment.

Average Net Investment

     Average net investment increased for the three months ended March 31, 2010, as compared to the same period in 2009, primarily due to the acceleration of debt repayments due to exceeding loss triggers on certain securitization trusts.

Net Interest Income

     Net interest income decreased for the three months ended March 31, 2010, as compared to the same period in 2009, primarily due to the declining portfolio balance as a result of principal repayments and foreclosures coupled with a decrease in the volume of voluntary prepayments.

Net Interest Spread

     Net interest spread decreased for the three months ended March 31, 2010, compared to the same period in 2009. This decrease is primarily due to a reduction in the effective interest yield on the securitized residential loan portfolio due to a decrease in voluntary prepayment speeds which resulted in a decrease in the recognition of purchase discounts into interest income, as well as an increase in borrower delinquencies.

Average Leverage Ratio

     The average leverage ratio decreased for the three months ended March 31, 2010, compared to the same period in 2009. The decrease is primarily related to a decrease in the average mortgage-backed debt balance due to repayments as well as an increase in average equity primarily resulting from the settlement of the net activity with Walter Energy in conjunction with the spin-off and Merger, net income generated, as well as our secondary offering in October 2009, partially offset by dividends paid.

Net Yield on Net Investment

     Net yield on net investment decreased for the three months ended March 31, 2010, as compared to the same period in 2009. The decrease is primarily the result of the increase in our average net investment resulting from accelerated mortgage-backed debt repayments coupled with a slight decrease in net interest income due to the run-off of the portfolio and lower voluntary prepayments.

Additional Analysis of Residential Loan Portfolio

Allowance for Loan Losses

     The allowance for loan losses represents management’s estimate of probable incurred credit losses inherent in our residential loan portfolio as of the balance sheet date. The determination of the level of the allowance for loan losses and, correspondingly, the provision for loan losses, is based on delinquency levels and trends, prior loan loss severity experience, and management’s judgment and assumptions regarding various matters, including the composition of the residential loan portfolio, the estimated value of the underlying real estate collateral, the level of the allowance in relation to total loans and to historical loss levels, national and local economic conditions, changes in unemployment levels and the impact that changes in interest rates have on a borrower’s ability to

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refinance their loan and to meet their repayment obligations. Management continuously evaluates these assumptions and various other relevant factors impacting credit quality and inherent losses when quantifying our exposure to credit losses and assessing the adequacy of our allowance for such losses as of each reporting date. The level of the allowance is adjusted based on the results of management’s analysis.

     Given continuing pressure on residential property values, especially in our southeastern U.S. market, continued high unemployment and a generally uncertain economic backdrop, we expect the allowance for loan losses to continue to remain elevated until such time as we experience a sustained improvement in the credit quality of the residential loan portfolio. The future growth of the allowance is highly correlated to unemployment levels and changes in home prices within our markets.

     While we consider the allowance for loan losses to be adequate based on information currently available, future adjustments to the allowance may be necessary due to changes in economic conditions, delinquency levels, foreclosure rates, loss severity rates, and further declines in real estate values.

     The following table shows information about the allowance for losses by portfolio for the periods presented.

						Net Losses and			Net Losses and
						Charge-offs			Charge-offs as a %
	Allowance		Allowance as a % of			Deducted from the			of Average
	for Loan Losses		Residential Loans (1)			Allowance			Residential Loans (2)
	(in thousands)
Residential loans:
March 31, 2010	$	3,384		1.02	%	$	5,900	(3)		1.77%	(3)(4)
December 31, 2009	$	3,460		1.03	%	$	4,317			1.23	%
Residential loans of securitization trusts:
March 31, 2010	$	13,940		1.07	%	$	8,208	(3)		0.62%	(3)(4)
December 31, 2009	$	14,201		1.07	%	$	12,173			0.89	%

(1)	The allowance for loan loss ratio is calculated as period end allowance for loan losses divided by period end residential loans, by portfolio type, before the allowance for loan losses.
(2)	The charge off ratio is calculated as charge-offs, net of recoveries divided by average residential loans, by portfolio type, before the allowance for loan  losses.
(3)	Annualized.
(4)	Excludes the impact of the REO sale from the securitized residential loan portfolio to the unencumbered residential loan portfolio.

     The following table summarizes activity in the allowance for loan losses in our residential loan portfolios, net for the three months ended March 31, 2010 and 2009 (in thousands):

	Residential Loans						Residential Loans of Securitization Trusts
	Three Months Ended March 31,						Three Months Ended March 31,
	2010			2009			2010			2009
Balance, December 31	$	3,460		$	3,418		$	14,201		$	15,551
Provision charged to income		1,399			1,269			1,791			3,107
Less: Charge-offs, net of recoveries		(1,475	)		(1,314	)		(2,052	)		(3,549	)
Balance, March 31	$	3,384		$	3,373		$	13,940		$	15,109

Delinquency Information

     The following table presents information about delinquencies as a percent of amounts outstanding in our residential loan portfolios:

							Residential Loans
	Residential Loans						of Securitization Trusts
	March 31,			December 31,			March 31,			December 31,
	2010			2009			2010			2009
Principal balance outstanding (in thousands)	$	360,543		$	365,797		$	1,432,403		$	1,454,062
31-60 days		1.62	%		1.98	%		0.73	%		1.17	%
61-90 days		0.83	%		1.53	%		0.31	%		0.54	%
91 days or more		5.21	%		5.84	%		2.30	%		2.74	%
		7.66	%		9.35	%		3.34	%		4.45	%

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     The following table presents information about delinquencies as a percent of the total number of loans outstanding in our residential loan portfolios:

							Residential Loans
	Residential Loans						of Securitization Trusts
	March 31,			December 31,			March 31,			December 31,
	2010			2009			2010			2009
Total number of residential loans		3,676			3,703			30,054			30,502
31-60 days		1.61	%		1.84	%		0.63	%		1.07	%
61-90 days		0.82	%		1.51	%		0.26	%		0.47	%
91 days or more		4.79	%		5.51	%		1.83	%		2.15	%
		7.22	%		8.86	%		2.72	%		3.69	%

     The past due or delinquency status is generally determined based on the contractual payment terms. The calculation of delinquencies excludes from delinquent amounts those accounts that are in bankruptcy proceedings that are paying their mortgage payments in contractual compliance with the bankruptcy court approved mortgage payment obligations.

     The following table summarizes our residential loans placed in non-accrual status due to delinquent payments of 90 days past due or greater:

	March 31,		December 31,
	2010		2009
Residential loans
Number of loans		176		204
Balance (in millions)	$	18.8	$	21.4
Residential loans of securitization trusts
Number of loans		551		656
Balance (in millions)	$	32.9	$	39.8
Total
Number of loans		727		860
Balance (in millions)	$	51.7	$	61.2

Portfolio Characteristics

     The weighted average original loan-to-value, or LTV, dispersion of our portfolios is as follows:

							Residential Loans
	Residential Loans						of Securitization Trusts
	March 31,			December 31,			March 31,			December 31,
	2010			2009			2010			2009
Weighted Average LTV		88.00	%		88.00	%		89.00	%		89.00	%
0.00 - 70.00		3.84	%		3.91	%		0.96	%		0.95	%
70.01 - 80.00		6.63	%		6.88	%		1.91	%		1.93	%
80.01 - 90.00(1)		44.84	%		43.56	%		77.35	%		76.90	%
90.01 - 100.00		44.69	%		45.65	%		19.78	%		20.22	%
Total		100.00	%		100.00	%		100.00	%		100.00	%

(1) For those residential loans in the portfolio prior to electronic tracking of original LTVs, the maximum LTV was 90%, or 10% equity. Thus, these residential loans have been included in the 80.01 to 90.00 LTV category.

     Original LTVs do not include additional value contributed by the borrower to complete the home. This additional value typically

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was created by the installation and completion of wall and floor coverings, landscaping, driveways and utility connections in more recent periods.

     Current LTVs are not readily determinable given the rural geographic distribution of our portfolio which precludes us from obtaining reliable comparable sales information to utilize in valuing the collateral.

     The weighted average FICO score dispersion of the loans in our residential loan portfolios, refreshed as of December 31, 2009, is as follows:

							Residential Loans
	Residential Loans						of Securitization Trusts
	March 31,			December 31,			March 31,			December 31,
	2010			2009			2010			2009
Weighted Average FICO		566			566			584			583
<=600		62.97	%		62.77	%		55.06	%		54.90	%
601 - 640		11.19	%		11.07	%		14.01	%		13.97	%
641 - 680		6.85	%		6.84	%		8.82	%		8.85	%
681 - 720		4.58	%		4.55	%		4.93	%		4.99	%
721 - 760		2.36	%		2.42	%		2.95	%		2.94	%
761-800		1.99	%		2.01	%		2.44	%		2.46	%
>=801		0.82	%		0.84	%		0.98	%		0.99	%
Unknown or unavailable		9.24	%		9.50	%		10.81	%		10.90	%
Total		100.00	%		100.00	%		100.00	%		100.00	%

     Our residential loans are concentrated in the following states:

							Residential Loans
	Residential Loans						of Securitization Trusts
	March 31,			December 31,			March 31,			December 31,
	2010			2009			2010			2009
Texas		34.01	%		33.85	%		34.06	%		33.92	%
Mississippi		12.81	%		12.86	%		16.09	%		16.11	%
Alabama		10.31	%		10.25	%		8.30	%		8.31	%
Louisiana		7.96	%		8.00	%		6.14	%		6.15	%
Florida		9.16	%		9.38	%		5.27	%		5.25	%
Others		25.75	%		25.66	%		30.14	%		30.26	%
Total		100.00	%		100.00	%		100.00	%		100.00	%

     Our residential loans outstanding as of March 31, 2010 were originated in the following periods:

				Residential Loans
	Residential Loans			of Securitization Trusts
Year 2010 Origination		1.56	%		1.09	%
Year 2009 Origination		3.76	%		3.13	%
Year 2008 Origination		27.96	%		2.10	%
Year 2007 Origination		57.24	%		1.62	%
Year 2006 Origination		6.92	%		12.89	%
Year 2005 Origination		0.35	%		10.51	%
Year 2004 Origination and earlier		2.21	%		68.66	%
Total		100.00	%		100.00	%

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Real Estate Owned

     The following table presents information about foreclosed property (dollars in thousands):

	Real Estate Owned Related to the						Real Estate Owned Related to the
	Residential Loan Portfolio						Residential Loans of Securitization Trusts
	Units			Balance			Units			Balance
Balance, December 31, 2009		271		$	21,981			760		$	41,143
Foreclosures, net of fair value adjustments		78			6,835			269			17,750
Purchases from the securitized residential loan portfolio		72			3,882			—			—
Sales to the residential loan portfolio		—			—			(72	)		(3,882	)
Sales to third parties		(86	)		(7,414	)		(298	)		(18,344	)
Balance, March 31, 2010		335		$	25,284			659		$	36,667

     During the three months ended March 31, 2010, we purchased 72 Mid-State Trust X REO accounts for approximately $3.9 million which is the economic value of the accounts as defined by the Trust agreement. As a result of this transaction, the loss trigger on Mid-State Trust X was cured. The purchased REO accounts are now included in the unencumbered REO balance.

Liquidity and Capital Resources

Overview

     Our principal sources of funds are our existing cash balances, monthly principal and interest payments we receive from our unencumbered residential loan portfolio, cash releases from our securitized residential loan portfolio, proceeds from our secondary offering and other financing activities. We generally use our liquidity for our operating costs, to make additional investments, and to make dividend payments.

     Our securitization trusts are consolidated for financial reporting purposes under GAAP. Our results of operations and cash flows include the activity of these Trusts. The cash proceeds from the repayment of the collateral held in securitization trusts are owned by the Trusts and serve to only repay the obligations of the Trusts unless certain overcollateralization or other similar targets are satisfied. Principal and interest on the mortgage-backed debt of the Trusts can only be paid if there are sufficient cash flows from the underlying collateral. As of March 31, 2010, total debt decreased $23.1 million as compared to December 31, 2009.

     The securitization trusts contain delinquency and loss triggers, that, if exceeded, result in any excess overcollateralization going to pay down our outstanding mortgage-backed and asset-backed notes for that particular securitization at an accelerated pace. Assuming no servicer trigger events have occurred and the overcollateralization targets have been met, any excess cash is released to the Company either monthly or quarterly, in accordance with the terms of the respective underlying trust agreements. As of March 31, 2010, two of our securitization trusts exceeded certain triggers and did not provide any excess cash flow to us. With the exception of the two trusts which have exceeded their triggers and the recently cured Mid-State Trust X, none of our other securitization trusts have reached or are near the levels of underperformance that would trigger a delay in cash releases.

     We believe that, based on current forecasts and anticipated market conditions, funding generated from the residential loans and the proceeds from our recent secondary offering will be sufficient to meet operating needs, to invest in residential loans, to make planned capital expenditures, to make all required principal and interest payments on mortgage-backed debt of the Trusts, for general corporate purposes and to pay cash dividends as required for our qualification as a REIT. However, our operating cash flows and liquidity are significantly influenced by numerous factors, including the general economy, interest rates and, in particular, conditions in the mortgage markets.

Mortgage-Backed Debt

     We have historically funded our residential loans through the securitization market. As of March 31, 2010, we had nine separate non-recourse securitization trusts where we service the underlying collateral and one non-recourse securitization for which we do not service the underlying collateral. These ten trusts have an aggregate of $1.2 billion of outstanding debt, collateralized by residential loans, REO and restricted cash with a principal balance of $1.5 billion. All of our mortgage-backed debt is non-recourse and not cross-collateralized and, therefore, must be satisfied exclusively from the proceeds of the residential loans and REO held in each securitization trust. As we retained the beneficial interests in the securitizations, will absorb a majority of any losses on the underlying collateral and significantly direct the activities of the securitization trusts, we have consolidated the securitization entities and treat the residential loans as our assets and the related mortgage-backed debt as our debt.

     Borrower remittances received on the residential loan collateral held in securitization trusts are used to make payments on the mortgage-backed debt. The maturity of the mortgage-backed debt is directly affected by principal prepayments on the related residential loan collateral. As a result, the actual maturity of the mortgage-backed debt is likely to occur earlier than the stated maturity. Certain of our mortgage-backed debt is also subject to redemption according to specific terms of the respective indenture agreements.

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Credit Agreements

     In April 2009, we entered into a syndicated credit agreement, a revolving credit agreement and security agreement, and a support letter of credit agreement. All three of these agreements mature on April 20, 2011. As of March 31, 2010, no funds have been drawn under any of the credit agreements and we are in compliance with all covenants.

Sources and Uses of Cash

     Our quarterly sources and uses of cash is one of the financial metrics on which we focus. As a supplement to the Consolidated Statements of Cash Flows included in this Quarterly Report on Form 10-Q, we provide the table below which sets forth, for the periods indicated, our quarterly sources and uses of cash (in millions). The cash balance at the beginning and ending of the first quarter of 2010 and 2009 are GAAP amounts and the sources and uses of cash are organized in a manner consistent with the way management analyzes them. The presentation of our sources and uses of cash for the table below is derived by aggregating and netting all items within our GAAP Consolidated Statements of Cash Flows for the respective periods.

	Three Months Ended
	March 31,
	2010			2009
Beginning cash and cash equivalents balance	$	99.3		$	1.3
Principal sources of cash:
Cash collections from the unencumbered portfolio		11.9			14.8
Cash releases from the securitized portfolio		13.9			8.9
Cash flow from ancillary businesses		2.9			3.3
		28.7			27.0
Other sources of cash:
Other		0.1			4.0
Total sources of cash		28.8			31.0
Principal uses of cash:
Acquisition of REO from the securitized portfolio		(3.9	)		—
Claims paid		(0.9	)		(0.6	)
Operating expenses paid		(12.5	)		(9.6	)
Capital expenditures		—			(0.8	)
		(17.3	)		(11.0	)
Other uses of cash:
Dividends paid		(13.2	)		—
Other		(1.3	)		(15.8	)
Total uses of cash		(31.8	)		(26.8	)
Net (uses) sources of cash		(3.0	)		4.2
Ending cash and cash equivalents balance	$	96.3		$	5.5

     Our principal business cash flows are those associated with managing our portfolio and totaled $11.4 million for the three months ended March 31, 2010, down $4.6 million from the three months ended March 31, 2009, as cash collections from our unencumbered residential loan portfolio decreased by $2.9 million due to the declining balance nature of our portfolio and a decline in the level of voluntary prepayments. Additionally, cash flow from our ancillary businesses decreased by $0.4 million, cash of $3.9 million was used to acquire REO from the securitized portfolio and cash operating expenses increased by $2.4 million due to expenses required as part of being a stand-alone company, partially offset by an increase of cash releases from our securitized portfolio of $5.0 million. The cash utilized to acquire REO from the securitized portfolio resulted in the increase in cash releases.

     Cash releases from the securitized portfolio consist of servicing fees and residual cash flows on residential loans held as securitized collateral within the securitization trusts after distributions are made to investors on the securitized mortgage-backed debt to the extent required credit enhancements are maintained and the delinquency and loss triggers are not exceeded. These cash flows represent the difference between principal and interest payments received on the underlying residential loans reduced by principal payments, including accelerated payments, if any, on the securitized mortgage-backed debt; interest paid on the securitized mortgage-backed debt; actual losses, net of any gains incurred upon disposition of REO; and the maintenance of overcollateralization requirements.

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     Our net other cash use totaled $14.4 million for the three months ended March 31, 2010, up $2.6 million from the three months ended March 31, 2009, primarily due to dividends paid to stockholders, partially offset by the termination of transactions with Walter Energy as a result of our spin-off.

     During April 2010, we deployed $11.1 million of the proceeds from our secondary offering to purchase a pool of residential loans. We intend to invest the remainder of the proceeds from the secondary offering in our targeted asset classes. We expect our future sources of cash will continue to be generated from our existing residential loan portfolios, as well as from future acquisitions of residential loans. If conditions in the securitization market improve, we may securitize in the future. Additionally, we expect that our future cash operating expenses will be relatively consistent with annualized fourth quarter 2009 actual results as a stand-alone entity.

     The following table sets forth, for the periods indicated, selected consolidated cash flow information (in thousands):

	For the Three Months Ended
	March 31,
	2010			2009
Cash flows provided by operating activities	$	8,550		$	11,194
Cash flows provided by investing activities		25,051			29,320
Cash flows used in financing activities		(36,585	)		(36,353	)
Net increase (decrease) in cash and cash equivalents	$	(2,984	)	$	4,161

     Operating activities. Net cash provided by operating activities was $8.6 million for the three months ended March 31, 2010 as compared to $11.2 million for the same period in 2009. During the three months ended March 31, 2010 and 2009, the primary sources of cash in operating activities were the income generated from our portfolio and our ancillary businesses.

     Investing activities. Net cash provided by investing activities was $25.1 million for the three months ended March 31, 2010 as compared to $29.3 million for the same period in 2009. For the three months ended March 31, 2010 and 2009, the primary source of cash from investing activities was provided by principal payments received on our residential loans.

     Financing activities. Net cash used in financing activities was $36.6 million for the three months ended March 31, 2010 as compared to $36.4 million for the same period in 2009. For the three months ended March 31, 2010, net cash used in financing activities was primarily for principal payments on our mortgage-backed debt as well as the payment of dividends to our stockholders. For the three months ended March 31, 2009, net cash used in financing activities was primarily for principal payments on our mortgage-backed debt as well as net activity with Walter Energy, our former parent company.

Off-Balance Sheet Arrangements

     As of March 31, 2010, we retained credit risk on 15 remaining mortgage securities totaling $1.7 million that were sold with recourse by Hanover in a prior year. Accordingly, we are responsible for credit losses, if any, with respect to these securities.

     We do not have any relationships with unconsolidated entities or financial partnerships, such as entities often referred to as structured finance, special purpose or variable interest entities, which would have been established for the purpose of facilitating off-balance sheet arrangements or other contractually narrow or limited purposes. In addition, we do not have any undisclosed borrowings or debt, and have not entered into any derivative contracts or synthetic leases. We are, therefore, not materially exposed to any financing, liquidity, market or credit risk that could arise if we had engaged in such relationships.

Dividends

     As a REIT, we are required to have declared dividends amounting to at least 90% of our net taxable income (excluding net capital gain) for each year by the time our U.S. federal tax return is filed. Therefore, a REIT generally passes through substantially all of its earnings to stockholders without paying U.S. federal income tax at the corporate level.

     As of March 31, 2010, we expect to pay dividends to our stockholders of all or substantially all of our net income in each year to qualify for the tax benefits accorded to a REIT under the Code. All distributions will be made at the discretion of our Board of Directors and will depend on our earnings, both tax and GAAP, financial condition and liquidity, maintenance of REIT qualification and such other factors as the Board of Directors deems relevant.

     On April 30, 2010, we declared a dividend of $0.50 per share on our common stock which was paid on May 14, 2010 to stockholders of record on May 28, 2010.

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Item 3. Quantitative and Qualitative Disclosures About Market Risk

Qualitative Information on Market Risk

     We seek to manage the risks inherent in our business — including but not limited to credit risk, interest rate risk, prepayment risk, liquidity risk, real estate risk and inflation risk — in a prudent manner designed to enhance our earnings and dividends and preserve our capital. In general, we seek to assume risks that can be quantified from historical experience, to actively manage such risks, and to maintain capital levels consistent with these risks.

Credit Risk

     Credit risk is the risk that we will not fully collect the principal we have invested in residential loans due to borrower defaults. Our portfolio as of March 31, 2010 consisted of securitized residential loans with a principal balance of $1.4 billion and approximately $0.4 billion of unencumbered residential loans.

     The residential loans were principally originated by or for JWH prior to our spin-off from Walter Energy. These are predominantly subprime loans with an average LTV ratio at origination of approximately 89% and average borrower credit core of 580. While we feel that our origination and underwriting of these loans will help to mitigate the risk of significant borrower default on these loans, we cannot assure you that all borrowers will continue to satisfy their payment obligations under these loans, thereby avoiding default.

     The $1.4 billion of residential loans held in securitization trusts are permanently financed with $1.2 billion of mortgage-backed debt leaving us with a net credit exposure of $188.0 million, which approximates our equity interest in the securitization trusts.

     When we purchase residential loans, the credit underwriting process will vary depending on the pool characteristics, including loan seasoning or age, LTV ratios, payment histories and counterparty representations and warranties. We will perform a due diligence review of potential acquisitions which may include a review of the residential loan documentation, appraisal reports and credit underwriting. Generally, an updated property valuation is obtained.

Interest Rate Risk

     Interest rate risk is the risk of changing interest rates in the market place. Our primary interest rate risk exposures relate to the interest rates on mortgage-backed debt of the Trusts and the yields on our residential loan portfolios and prepayments thereof.

     Our fixed-rate residential loan portfolio had $1.8 billion of unpaid principal as of March 31, 2010 and December 31, 2009, and fixed-rate mortgage-backed debt was $1.2 billion and $1.3 billion as of March 31, 2010 and December 31, 2009, respectively. The fixed rate nature of these instruments and their offsetting positions effectively mitigate significant interest rate risk exposure from these instruments. If interest rates decrease, we may be exposed to higher prepayment speeds. This could result in a modest increase in short-term profitability. However, it could adversely impact long-term profitability as a result of a shrinking portfolio. Changes in interest rates may impact the fair value of these financial instruments.

Prepayment Risk

     Prepayment risk is the risk that borrowers will pay more than their required monthly mortgage payment including payoffs of residential loans. When borrowers repay the principal on their residential loans before maturity, or faster than their scheduled amortization, the effect is to shorten the period over which interest is earned, and therefore, increases the yield for residential loans purchased at a discount to their then current balance, as with the majority of our portfolio. Conversely, residential loans purchased at a premium to their then current balance exhibit lower yields due to faster prepayments. Historically, when market interest rates declined, borrowers had a tendency to refinance their residential loans, thereby increasing prepayments. Increases in residential loan prepayment rates could result in GAAP earnings volatility including substantial variation from quarter to quarter.

     We monitor prepayment risk through periodic reviews of the impact of a variety of prepayment scenarios on revenues, net earnings, dividends, and cash flow.

Liquidity Risk

     Liquidity is a measure of our ability to meet potential cash requirements, including ongoing commitments to repay mortgage-backed debt of the Trusts, fund and maintain the portfolio, pay dividends to our stockholders and other general business needs. We recognize the need to have funds available to operate our business. It is our policy to have adequate liquidity at all times.

     Our principal sources of liquidity are the mortgage-backed debt of the Trusts we have issued to finance our residential loans held in securitization trusts, the principal and interest payments received from unencumbered residential loans, cash releases from the securitized portfolio and cash proceeds from the issuance of equity securities. We expect these sources of funds will be sufficient to meet our liquidity requirements.

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     Our unencumbered and securitized mortgage loans are accounted for as held-for-investment and reported at amortized cost. Thus, changes in the fair value of the residential loans do not have an impact on our liquidity. However, the delinquency and loss triggers discussed previously may impact our liquidity. Our obligations consist solely of mortgage-backed debt issued by our securitization trusts. Changes in fair value of mortgage-backed debt generally have no impact on our liquidity. Mortgage-backed debt issued by the securitization trusts are reported at amortized cost as are the residential loans collateralizing the debt.

Real Estate Risk

     We own assets secured by real property and own property directly as a result of foreclosures. Residential property values are subject to volatility and may be affected adversely by a number of factors, including, but not limited to, national, regional and local economic conditions (which may be adversely affected by industry slowdowns and other factors); local real estate conditions (such as an oversupply of housing); changes or continued weakness in specific industry segments; construction quality, age and design; demographic factors; and retroactive changes to building or similar codes. In addition, decreases in property values reduce the value of the collateral and the potential proceeds available to a borrower to repay our loans, which could also cause us to suffer losses.

Inflation Risk

     Virtually all of our assets and liabilities are financial in nature. As a result, changes in interest rates and other factors influence our performance far more so than inflation. Changes in interest rates do not necessarily correlate with inflation rates or changes in inflation rates. Our consolidated financial statements are prepared in accordance with GAAP. Our activities and balance sheets are measured with reference to historical cost or fair value without considering inflation.

Effect of Governmental Initiatives on Market Risk

     Recent market and economic conditions have been unprecedented and challenging. There are continuing concerns about the overall economy, the systemic impact of inflation or deflation, the availability and cost of credit, the U.S. mortgage market, unemployment, and the declining real estate market in the U.S.

     These market and economic conditions have spurred government initiatives and interventions designed to address them. Given the size and scope of the government actions, they will affect many of the market risks described above, although the total impact is not yet fully known. As these initiatives are further developed and their effects become more apparent, we will continue to take them into account in managing the risks inherent in our business.

Quantitative Information on Market Risk

     Our future earnings are sensitive to a number of market risk factors; changes in these factors may have a variety of secondary effects that, in turn, will also impact our earnings. To supplement this discussion on the market risk we face, the following table incorporates information that may be useful in analyzing certain market risks.

     The table presents principal cash flows by year of repayment. The timing of principal cash flows includes assumptions on the prepayment speeds of assets based on their recent performance and future prepayment expectations. Our future results depend greatly on the credit performance of the underlying loans (this table assumes no credit losses).

	Principal Amounts Maturing and Effective Rates During Period												At March 31, 2010
													Principal
(dollars in thousands)	Q2-Q4 2010		2011		2012		2013		2014		Thereafter		Value		Book Value		Fair Value
Residential loans
Principal		11,742		16,812		17,938		17,896		17,202		278,953		360,543		327,775		295,600
Residential loans of securitization trusts
Principal		68,492		95,031		91,612		87,885		84,391		1,004,992		1,432,403		1,292,561		1,243,047
Mortgage-backed debt
Principal		59,422		95,710		92,971		88,690		86,136		822,041		1,244,970		1,244,379		1,147,056

     Approximately 99% of residential loans have fixed interest rates. Residential loans with adjustable interest rates comprise only $1.3 million of the unencumbered loans and $20.9 million of the securitized loans. Similarly, all of our mortgage-backed debt of securitization trusts is fixed rate. The weighted-average coupon is 9.2% for residential loans, 9.1% for residential loans of securitization trusts and 6.7% for mortgage-backed debt.

Item 4. Controls and Procedures

     (a) Evaluation of Disclosure Controls and Procedures. As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief

33

Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Rule 13a-15 under the Securities Exchange Act of 1934, as amended. Based upon that evaluation, our management, including our Chief Executive Officer and Chief Financial Officer, concluded that our disclosure controls and procedures are effective in timely alerting them to material information required to be included in our periodic SEC filings.

     (b) Changes in Internal Controls. There have been no changes in our internal control over financial reporting during our first quarter ended March 31, 2010, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

34

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

     We are not currently a party to any lawsuit or proceeding which, in the opinion of management, is likely to have a material adverse effect on our business, financial condition, or results of operation.

     As discussed in Note 17 of “Notes to Consolidated Financial Statements”, Walter Energy is in dispute with the IRS on a number of federal income tax issues. Walter Energy has stated in its public filings that it believes that all of its current and prior tax filing positions have substantial merit and that Walter Energy intends to defend vigorously any tax claims asserted. Under the terms of the tax separation agreement between us and Walter Energy dated April 17, 2009, Walter Energy is responsible for the payment of all federal income taxes (including any interest or penalties applicable thereto) of the consolidated group, which includes the aforementioned claims of the IRS. However, to the extent that Walter Energy is unable to pay any amounts owed, we could be responsible for any unpaid amounts.

Item 1A. Risk Factors

     For risk factors, see Item 1A, “Risk Factors,” of our Annual Report on Form 10-K for the year ended December 31, 2009. Our risk factors have not changed materially since December 31, 2009.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

(a)	Not applicable.
(b)	Not applicable.
(c)	Not applicable.

Item 3. Defaults Upon Senior Securities

     None.

Item 4. Removed and Reserved

Item 5. Other Information

     None.

Item 6. Exhibits

     The exhibits listed on the Exhibit Index, which appears immediately following the signature page below, are included or incorporated by reference herein.

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Signatures

     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 thereunto duly authorized.

WALTER INVESTMENT MANAGEMENT CORP.
By:	/s/ Mark J. O'Brien
	Mark J. O'Brien
	Chief Executive Officer (Principal Executive Officer)

Dated: May 5, 2010

By:	/s/ Kimberly A. Perez
	Kimberly A. Perez
	Vice President and Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)

Dated: May 5, 2010

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INDEX TO EXHIBITS

Exhibit No	Notes	Description
2.1	(1)	Second Amended and Restated Agreement and Plan of Merger dated as of February 6, 2009, among Registrant, Walter Industries, Inc., JWH Holding Company, LLC, and Walter Investment Management LLC.
2.2	(1)	Amendment to the Second Amended and Restated Agreement and Plan of Merger, entered into as of February 17, 2009 between Registrant, Walter Industries, Inc., JWH Holding Company, LLC and Walter Investment Management LLC
3.1	(2)	Articles of Amendment and Restatement of Registrant effective April 17, 2009.
3.2	(2)	By-Laws of Registrant, effective April 17, 2009.
10.1	(3)	Form of Indemnity Agreement dated March 3, 2010 between the Registrant and Steven R. Berrard.
10.2	(4)	Employment Agreement between the Registrant and Denmar Dixon dated January 22, 2010
10.3	(5)	Separation and General Release Between the Registrant and John A. Burchett
10.4	(9)	Amended and Restated Contract of Employment between the Registrant and Mark J. O’Brien dated March 15, 2010
10.5	(9)	Amended and Restated Contract of Employment between the Registrant and Charles E. Cauthen dated March 15, 2010
10.6	(9)	Amended and Restated Contract of Employment between the Registrant and Kimberly A. Perez dated March 15, 2010
10.7	(6)	Executive RSU Award Agreements between Registrant and Mark J. O’Brien, Charles E. Cauthen and Kimberly A. Perez dated January 4, 2010
10.8	(6)	Non-Qualified Option Award Agreements between Registrant and Mark J. O’Brien, Charles E. Cauthen and Kimberly A. Perez dated January 4, 2010
10.9	(9)	Executive RSU Award Agreement between Registrant and Stuart D. Boyd dated January 4, 2010
10.10	(9)	Executive RSU Award Agreement between Registrant and Del Pulido dated January 4, 2010
10.11	(9)	Non-Qualified Option Award Agreement between Registrant and Stuart D. Boyd dated January 4, 2010
10.12	(9)	Non-Qualified Option Award Agreements between Registrant and Del Pulido dated January 4, 2010
10.13	(7)	2009 Long Term Incentive Award Agreements for Special RSU Award, Bonus RSU Award and Nonqualified Option Award Between Registrant and Denmar Dixon
10.14	(8)	Amendment No. 1 to Revolving Credit Agreement
31.1	(9)	Certification by Mark J. O’Brien pursuant to Securities Exchange Act Rule 13a-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2	(9)	Certification by Kimberly A. Perez pursuant to Securities Exchange Act Rule 13a-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32	(9)	Certification by Mark J. O’Brien and Kimberly A. Perez pursuant to 18 U.S.C. Section 1352, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

37

Note	Notes to Exhibit Index
(1)	Incorporated herein by reference to the Annexes to the proxy statement/ prospectus forming a part of Amendment No. 4 to the Registrant’s Registration Statement on Form S-4, Registration No. 333-155091, as filed with the Securities and Exchange Commission on February 17, 2009.
(2)	Incorporated herein by reference to Registrant’s Current Report on Form 8-K filed with the Securities and Exchange Commission on April 21, 2009.
(3)	Incorporated by reference to Registrant’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2009, as filed with the Securities and Exchange Commission on August 14, 2009.
(4)	Incorporated by reference to Registrant’s Current Report on Form 8-K, as filed with the Securities and Exchange Commission on January 26, 2010.
(5)	Incorporated by reference to Registrant’s Annual Report on Form 10-K for the year ended December 31, 2009, as filed with the Securities and Exchange Commission on March 2, 2010
(6)	Incorporated by reference to Registrant’s Current Report on Form 8-K, as filed with the Securities and Exchange Commission on January 8, 2010.
(7)	Incorporated by reference to Registrant’s Current Report on Form 8-K, as filed with the Securities and Exchange Commission on January 28, 2010.
(8)	Incorporated by reference to Registrant’s Current Report on Form 8-K, as filed with the Securities and Exchange Commission on February 19, 2010.
(9)	Filed herewith

38

EX-10.4

Exhibit 10.4

March 15, 2010

Mark J. O’Brien
4919 W. Bay Way Drive

Tampa, FL 33629

Dear Mark:

On or about December 23, 2008, you entered into an agreement pursuant to which you would act as the Chairman of the Board of Directors and Chief Executive Officer of Walter Investment Management Corp. (the “Company”), the surviving entity following the merger of JWH Holding Company, LLC (“JWHHC”) with Hanover Capital Mortgage Holdings, Inc. (“HCM”) pursuant to the Agreement and Plan of Merger entered into between JWHHC and HCM. You have been acting in that capacity since April 17, 2009, however, you and the Company agree that there is a need to clarify or amend certain of the provisions of your December 23, 2008 agreement. This letter is intended to amend and restate your initial agreement and this agreement (the “Agreement”) will be the sole obligation of the Company with respect to your employment; it being specifically understood that this Agreement does not supersede any provisions of any individual long term incentive or other benefit plans or programs to which you may be a party. The term of this Agreement shall continue until the close of business on April 17, 2012 (the “Term”). Thereafter, the Term shall automatically extend annually for one year terms (any then current period of extension being referred to as the Term) unless and until terminated as provided herein. While employed during the Term, you agree to devote, during normal business hours during business days, your full time and efforts to advancing the Company’s interests; provided, however, that you may continue engaging in the other business and investment activities you are currently engaged in so long as such activities are not directly competitive with the Company’s business and do not prevent you from carrying out your duties as Chairman of the Board of Directors and Chief Executive Officer of the Company.

The purpose of this amended and restated letter is to ratify and confirm your acceptance of the terms of your employment as set forth herein. Any capitalized terms not defined herein shall have the definition set forth in the Appendix hereto.

1. As the Chairman of the Board of Directors and Chief Executive Officer of the Company, you shall report to and serve at the direction of the Board of Directors of the Company. In your capacity as Chairman of the Board of Directors and Chief Executive Officer of the Company, you will be responsible for directing all aspects of the business of the Company.

2. During the Term of this Agreement your annual compensation package will be as follows:

(a)	Base Salary Your Base Salary will be $500,000 per year which will be subject to annual review and increase (but not decrease) to the extent deemed appropriate by the Compensation Committee and paid in accordance with the payroll practices of the Company, as they may change from time to time.
(b)	Bonus
	Your annual target bonus will be 100% of your Base Salary, or $500,000 at your current Base Salary, with the potential to increase your bonus to a maximum of 200% of your Base Salary (i.e., $1,000,000 at your current Base Salary) subject to increase as your Base Salary increases, provided, however, that the actual amount of your bonus will be dependent upon the achievement of the Company’s annual financial and other goals consistent with those established for other members of executive management, as well as the accomplishment of any individual objectives, established annually by the Board of Directors (the actual bonus awarded in any given year, which may be greater or less than your target bonus is referred to herein as your “Annual Bonus” for that year). Except as provided in sections 6(a), (b) and (d) below, to receive any Annual Bonus, you must be employed through the end of the year for which the bonus is payable (the “Bonus Year”). The bonus for a Bonus Year will be payable to you during the next following year (the “Bonus Payment Year”) immediately upon the closing of the Company’s books for the Bonus Year, but not later than March 14 of the Bonus Payment Year (the “Bonus Payment Date”).
(c)	Benefits

(i)

You will be entitled to receive from the Company prompt reimbursement for all reasonable out-of-pocket business expenses incurred by you in the performance of your duties hereunder, in accordance with the most favorable policies, practices and procedures of the Company relating to reimbursement of business expenses incurred by Company directors, officers or employees in effect at any time during the 12 month period preceding the date you incur the expenses; provided, however, that any such expense reimbursement will be made no later than the last day of the calendar year following the calendar year in which you incur the expense, will not affect the expenses eligible for reimbursement in any other calendar year, and cannot be liquidated or exchanged for any other benefit.

(ii)

Participation in the Company’s group life and health insurance benefit programs generally applicable to executives in Tampa in accordance with their terms, as they may change from time to time. Such group life and health insurance benefits shall be at least comparable to those provided to the chief executive officer of similar-size companies engaged in a business similar to the Company’s business.

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(iii)	Participation in the Company’s retirement plan, generally applicable to salaried employees in Tampa as it may change from time to time and in accordance with its terms. Your eligibility to participate will be consistent with the requirements of ERISA. Such retirement plan benefits shall be at least comparable to those provided to the chief executive officer of similar-size companies engaged in a business similar to the Company’s business.
(iv)	Participation in the Company’s long-term incentive plan(s), as such plan(s) may be in effect from time to time. For 2010 your annual long-term incentive opportunity will have an economic value of $625,000 as of the effective date of the award. Thereafter, the annual economic value shall be determined by the Compensation Committee. The components of any award and the methodology for determining the economic value shall be as provided in the plan(s) or otherwise as determined by the Compensation Committee in its discretion. Notwithstanding the foregoing, except to the extent inconsistent with the terms and conditions of the plan(s), any award agreements shall be consistent with the terms and conditions of this Agreement. In particular, with respect to the award of annual equity grants any such grants will (a) vest over a period that is no longer than one-third per year over three years, (b) option grants will have a minimum 10-year term, and (c) upon your death, Disability, your Constructive Termination, Retirement (except as otherwise provided below), or upon a Change in Control of the Company, vesting will accelerate. Subject to the foregoing, the specific terms of your annual long-term incentive opportunity will be mutually agreed upon and set forth in separate grant agreements.
(v)	30 days of annual vacation to be used each year in accordance with the Company’s vacation policy, as it may change from time to time.
(vi)	You will receive a monthly auto allowance of $2,000, subject to the usual withholding taxes.
(vii)	You may use company-owned, leased or chartered aircraft for your business travel as appropriate. However, you will not use any company-owned, leased or chartered aircraft for personal travel at company expense, except in the case of a family emergency and with the prior approval of the Chairman of the Compensation Committee, or in the event of his unavailability, the Chairman of the Corporate Governance Committee. You will not be required to reimburse the Company for the cost of any such pre-approved emergency travel, but the value of such travel will be taxable to you in accordance with applicable IRS regulations. You shall not pilot company aircraft or leased or chartered aircraft used for company business.
(viii)	Your Benefits under this Agreement, including grants to you under the Company’s long-term incentive plan(s), will be subject to periodic review and increase by the Compensation Committee.

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(d) Recapitalization

Any equity award agreement will provide that in the event of any change in the capitalization of the Company such as a stock spilt or a corporate transaction such as a merger, consolidation, separation or otherwise, the number and class of RSU’s or options, as the case may be, shall be equitably adjusted by the Company’s Compensation and Human Resources Committee, in its sole discretion, to prevent dilution or enlargement of rights.

3.	It is specifically agreed and understood that, notwithstanding any stated Term of this Agreement, your employment with the Company is to be at will, and either you or the Company may terminate the employment relationship at any time for any reason, with or without cause, and with or without notice to the other; nothing herein or elsewhere constitutes or shall be construed as a commitment to employ you for any period of time.
4.	You agree that all inventions, improvements, trade secrets, reports, manuals, computer programs, systems, tapes and other ideas and materials developed or invented by you during the period of your employment with the Company, either solely or in collaboration with others, which relate to the actual or anticipated business or research of the Company, which result from or are suggested by any work you may do for the Company, or which result from use of the Company’s premises or the Company’s or its customers’ property (collectively, the “Developments”) shall be the sole and exclusive property of the Company. You hereby assign to the Company your entire right and interest in any such Developments, and will hereafter execute any documents in connection therewith that the Company may reasonably request.
5.	As an inducement to the Company to make this offer to you, you represent and warrant that you are not a party to any agreement or obligation for personal services that would prevent you from performing your duties as Chairman of the Board and Chief Executive Officer of the Company hereunder, and there exists no impediment or restraint, contractual or otherwise on your power, right or ability to accept this offer and to perform the duties and obligations specified herein.
6.	In the event of a termination or cessation of your employment with the Company for any reason, the Term shall expire (except as specifically provided herein) as of the date of such termination or cessation and the sole rights and obligations of the Company in connection with your termination shall be those provided under the relevant provision below.

(a) In the event of your death or Retirement during the Term, the Company will pay to you, your beneficiaries or your estate, as the case may be, as soon as practicable after your death or Retirement (with the exception of subsection (iii) below which will be paid in the Bonus Payment Year) (i) the unpaid Base Salary through the date of your death or Retirement, plus payment of any bonus amount payable to you (as determined by the Compensation Committee), in respect of any bonus period ended prior to your termination of employment

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	(collectively, the “Compensation Payments”), (ii) for any accrued but unused vacation days, to the extent and in the amounts, if any, provided under the Company’s usual policies and arrangements (the “Vacation Payment”), and (iii) the Annual Bonus, in respect of the fiscal year in which your termination occurs, multiplied by (x) the number of days prior to your termination during such fiscal year, divided by (y) 365 (the “Prorated Bonus”), which payment shall be made on the Bonus Payment Date for the year in which your death or Retirement occurs.
(b)	In the event you suffer a Disability the Company may terminate your employment on written notice thereof, and the Company will pay you (i) amounts payable pursuant to the terms of any applicable disability insurance policy or similar arrangement (if any) that the Company maintains, (ii) the Compensation Payments, (iii) the Vacation Payment and (iv) the Prorated Bonus.
(c)	In the event your employment is terminated by the Company for Cause or by you other than as a result of Constructive Termination, Disability, Retirement, or death, the Company will pay to you (i) unpaid Base Salary through the date of your termination, plus (ii) the Vacation Payment, and you will be entitled to no other compensation, except as otherwise due to you under applicable law or the terms of any applicable plan or program. You will not be entitled, among other things, to the payment of any unpaid bonus payments in respect of any period prior to your termination of employment.
(d)	In the event you are subjected to Involuntary Termination other than for Cause, Disability or death, or you terminate your employment as a result of Constructive Termination, the Company will (i) pay to you the Compensation Payments, the Vacation Payment, and the Prorated Bonus, (ii) continue to pay your Base Salary then in effect and Annual Bonus (which shall be in an amount that is consistent with other Company executives of your level), for a period of 18 months after your termination, paid in the same periodic installments as such Base Salary and during the same Bonus Payment Year (as the case may be) as you would have been paid had you remained on the Company’s ordinary payroll during such period; and (iii) you will be entitled to continued participation in benefits, to the extent the plans allow, until the earlier of the 18 month anniversary of the termination date or until you are eligible to receive comparable benefits from subsequent employment. For purposes of clarification, the period of the foregoing severance for salary, bonus and benefits shall be 18 months regardless of how much time remains in the then current Term of this Agreement. For example, there shall be no additional period of severance if the balance of the then current Term at the time of termination exceeds 18 months, nor shall there be a reduction in severance if the balance of the then current Term at the time of termination is less than 18 months. Moreover, you will remain entitled to the foregoing severance notwithstanding the Company’s failure to extend any Term beyond its expiration date. Regarding your Annual Bonus, by way of example should you be terminated on June 30 of 2010, you will be paid the Prorated Bonus for the year in which you were terminated (which is equal to the Annual Bonus for such year prorated for the period from the Effective Date through June 30), plus the balance of the Bonus for 2010 (i.e., the Annual Bonus for the first six months of your 18 month severance period), plus the full Annual Bonus for 2011 (the Annual Bonus for the remaining 12 months of the

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18 month severance period). Payment of the foregoing severance is subject to your execution, delivery and non-revocation of the release attached hereto as Appendix 2 within thirty (30) days following the termination of your employment, and your resignation, effective as of the date of your termination of employment, as an officer and/or director of the Company or any of its subsidiaries or affiliates. The COBRA election period will not commence until the expiration of that 18 month period. The amount of expenses eligible for reimbursement, or in-kind benefits provided, during a calendar year may not affect the expenses eligible for reimbursement, or the in-kind benefits to be provided, in any other calendar year. Your right to reimbursement or in-kind benefits is not subject to liquidation or exchange for another benefit. Payment will be provided only if the filing of the claim for payment and completion of the reimbursement payment can reasonably be completed by the end of the calendar year following the year in which the expense is incurred. In order to be entitled to the foregoing in the event of Constructive Termination, you must provide written notice, including details describing the basis of your claim, to the Company within 60 days of the occurrence of the event(s) giving rise to a claim of Constructive Termination and the Company will have 30 days to remedy any non-compliance. In the event the Company fails or is unable to remedy any non-compliance, the effective date of your termination of employment shall be 90 days from the date the Company received notice, unless otherwise agreed by you and the Company. Should you fail to provide the foregoing notice, you will thereafter be barred from receiving benefits based upon the events giving rise to the claim.

(e)

Treatment of Grants of Equity — Any grants of equity that you may receive subsequent to the date of this Agreement, and the disposition of such awards in the event of the occurrence of any of the circumstances set forth in subsections (a) – (d) above, shall be subject to the terms and conditions of the plan(s) or program(s) under which the awards are granted; provided, however, that to the extent not inconsistent with such plan(s) or program(s), any such awards will provide that, in the event of termination pursuant to (i) subsections (a) or (b) above, or as a result of Constructive Termination, all outstanding equity awards will immediately vest and any restrictions shall lapse (provided, however, that in the case of Retirement such immediate vesting will only apply to grants that vest after April 17, 2012 – any grants that are due to vest prior to April 17, 2012 but have not vested as of the time of Retirement shall be forfeited), or (ii) subsection (c) or (d) above, other than as a result of Constructive Termination, all unvested awards will be forfeited, subject to the discretion of the Board of Directors to vest some or all of these awardd. For purposes of clarification, the restricted stock units awarded to you in connection with the spin-off of Walter Investment Management, LLC from Walter Industries on April 17, 2009 will not be subject to forfeiture under this Agreement. In the event of a Change of Control, you will not have the right to terminate your employment, other than as otherwise permitted in this Agreement; however, upon such Change of Control, all unvested equity will immediately vest and all restrictions on any stock awarded shall lapse.

7. Non-Compete. It is understood and agreed that the Company and you will have substantial relationships with specific businesses and personnel, prospective and existing, vendors, contractors, customers, and employees of the Company that result in the creation of customer goodwill. Therefore, except with respect to business and investment activities you are currently engaged in, following the termination of employment under this Agreement for any reason and continuing for a period of eighteen (18) months from the date of such termination,

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so long as the Company or any subsidiary, affiliate, successor or assigns thereof is in the residential real estate mortgage servicing business or directly related businesses within the Restricted Area, unless the Board of Directors approves an exception, you shall not, directly or indirectly, for yourself or on behalf of, or in conjunction with, any other person, persons, company, partnership, corporation, business entity or otherwise:

(a)

Call upon, solicit, write, direct, divert, influence, or accept residential real estate mortgage servicing and directly related business (either directly or indirectly) with respect to any account or customer or prospective customer of the Company or any corporation controlling, controlled by, under common control with, or otherwise related to the Company, including but not limited to Walter Investment Management Corp., Hanover Capital Mortgage Holdings, Inc., Walter Mortgage Company, or any other affiliated companies; or

(b)

hire away any independent contractors or personnel of the Company and/or entice any such persons to leave the employ of the Company or its affiliated entities without the prior written consent of the Company

8. Non-Disparagement. Following the termination of employment under this Agreement for any reason and continuing for so long as the Company or any affiliate, successor or assigns thereof carries on the same business within the Restricted Area, neither you nor any director or executive officer of the Company shall, directly or indirectly, for yourself or itself or on behalf of, or in conjunction with, any other person, persons, company, partnership, corporation, business entity or otherwise:

(a)	Make any statements or announcements or permit anyone to make any public statements or announcements concerning your termination with the Company, or
(b)	Make any statements that are inflammatory, detrimental, slanderous, or negative in any way to the interests of you or the Company or its affiliated entities as the case may be.
(c)	Nothing in this section shall prevent either party from testifying or responding truthfully to any request for discovery or testimony in any judicial or quasi-judicial, proceeding or any government inquiry, investigation or other proceeding.

9. You acknowledge and agree that you will respect and safeguard the Company’s property, trade secrets and confidential information. You acknowledge that the Company’s electronic communication systems (such as email and voicemail) are maintained to assist in the conduct of the Company’s business and that such systems and data exchanged or stored thereon are Company property. In the event that you leave the employ of the Company, you will not disclose any Company trade secrets or confidential information you acquired while an employee of the Company to any other person or entity, including without limitation, a subsequent employer, or use such information in any manner.

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10.	Tax Compliance Delay in Payment. If the Company reasonably determines that any payment or benefit due under this Agreement, or any other amount that may become due to you after termination of employment, is subject to Section 409A of the Code, and also determines that you are a “specified employee,” as defined in Section 409A(a)(2)(B)(i) of the Code, upon your termination of employment for any reason other than death (whether by resignation or otherwise), no amount may be paid to you or on your behalf earlier than six months after the date of your termination of employment (or, if earlier, your death) if such payment would violate the provisions of Section 409A of the Code and the regulations issued thereunder, and payment shall be made, or commence to be made, as the case may be, on the date that is six months and one day after your termination of employment (or, if earlier, one day after your death). For this purpose, you will be considered a “specified employee” if you are employed by an employer that has its stock publicly traded on an established securities market or certain related entities have their stock traded on an established securities market and you are a “key employee”, with the exact meaning of “specified employee”, “key employee” and “publicly traded” defined in Section 409A(a)(2)(B)(i) of the Code and the regulations thereunder. Notwithstanding the above, the Company hereby retains discretion to make determinations regarding the identification of “specified employees” and to take any necessary corporate action in connection with such determination.
11.	You acknowledge and agree that you have read this Agreement carefully, have been advised by the Company to consult with an attorney regarding its contents, and that you fully understand the same.
12.	It is agreed and understood that this acceptance letter shall constitute our entire agreement with respect to the subject matter hereof and shall supersede all prior agreements, discussions, understandings and proposals (written or oral) relating to your employment with the Company. This letter agreement will be interpreted under and in accordance with the laws of the State of Florida without regard to conflicts of laws principles of such State. The parties hereto shall first seek to resolve any dispute over the terms and conditions or application of this Agreement through binding arbitration pursuant to the rules of the American Arbitration Association (“AAA”). The arbitration will be heard by one arbitrator to be chosen as provided by the rules of the AAA and shall be held in Tampa, Florida. If you prevail in the dispute, the Company will pay your reasonable fees and costs in connection with the matter (including attorneys fees). Whether you have prevailed or not shall be determined by the arbitrator or if the arbitrator declines to determine whether or not you have prevailed, you will be deemed to have prevailed if, in the case of monetary damages you receive in excess of 50% of what you demanded. Notwithstanding the foregoing, in the event of a breach or threatened breach of the provisions of section 7-9, the party that is in breach or in threatened breach acknowledges and agrees that the other party will suffer irreparable harm that is not subject to being cured with monetary damages and that the Company shall be entitled to injunctive relief in a state court of the State of Florida.
13.	You and the Company intend that payments and benefits under this Agreement comply with Code Section 409A and the regulations and guidance promulgated thereunder (collectively

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“Code Section 409A”) and, accordingly, to the maximum extent permitted, this Agreement shall be interpreted to be in compliance therewith. In the event that any provision of this Agreement is determined by you or the Company to not comply with Code Section 409A, the Company shall fully cooperate with you to reform the Agreement to correct such noncompliance to the extent permitted under any guidance, procedure, or other method promulgated by the Internal Revenue Service now or in the future that provides for such correction as a means to avoid or mitigate any taxes, interest, or penalties that would otherwise be incurred by you on account of such non-compliance.

REMAINDER OF PAGE INTENTIONALLY BLANK

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If the terms contained within this letter are acceptable, please sign one of the enclosed copies and return it to me in the envelope provided and retain one copy for your records.

Very truly yours,

Stuart D. Boyd
V.P., General Counsel and Secretary

ACCEPTANCE

I have read the foregoing, have been advised to consult with counsel of my choice concerning the same, and I fully understand the same. I approve and accept the terms set forth above as governing my employment relationship with the Company.

Signature                                                              Date                     

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APPENDIX 1
DEFINITIONS

“AAA: shall have the meaning set forth in Section 12.

“Agreement” shall have the meaning set forth in the introductory paragraph of this Agreement.

“Annual Bonus” shall have the meaning set forth in Section 2(b) of this Agreement.

“Base Salary” shall have the meaning set forth in Section 2(a) of this Agreement.

“Bonus Payment Date” shall have the meaning set forth in Section 2(b)

“Bonus Payment Year” shall have the meaning set forth in Section 2(b) of this Agreement.

“Bonus Year” shall have the meaning set forth in Section 2(b) of this Agreement.

“Cause” shall mean (A) conviction of a felony arising from any act of fraud, embezzlement or willful dishonesty in relation to the business or affairs of the Company, or (B) conviction of, or pleas of guilty or nolo contendre to any other felony which is materially injurious to the Company or its reputation or which compromises your ability to perform your job function, and/or act as a representative of the Company, or (C) a willful failure to attempt to substantially perform your duties (other than any such failure resulting from your Disability), after a written demand for substantial performance is delivered to you that specifically identifies the manner in which the Company believes that you have not attempted to substantially perform such duties, and you have failed to remedy the situation, to the extent possible, within fifteen (15) business days of such written notice from the Company or such longer time as may be reasonably required to remedy the situation, but no longer than forty-five (45) calendar days. For purposes of this definition, no act or failure to act on your part shall be considered to be Cause if done, or omitted to be done, by you in good faith and with the reasonable belief that the action or omission was in the best interest of the Company or a Company subsidiary. The decision to terminate your employment for Cause, to take other action or to take no action in response to such occurrence shall be in the sole and exclusive discretion of the Board of Directors. If the Board of Directors terminates your employment for Cause, the Company shall deliver written notice of such termination to you, which notice shall include the factual basis for your termination, and such termination shall be effective immediately upon service of such written notice.

“Change in Control” shall mean a change of ownership of the Company, a change in the effective control of the Company, or a change in the ownership of a substantial portion of the assets of the Company within the meaning of Treas. Reg. 1.409A-3(i)(5). To be entitled to severance benefits under this paragraph you must terminate employment from the Company. For this purpose, your termination of employment must be considered a “separation from service” within the meaning of Code §409A(a)(2)(A)(i) and any guidance or regulations issued thereunder.

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“Code” shall mean the Internal Revenue Code.

“Code Section 409A” shall have the meaning set forth in Section 13.

“Company” shall have the meaning set forth in the introductory paragraph of this Agreement.

“Compensation Committee” shall mean the Compensation and Human Resources Committee of the Board of Directors of the Company

“Compensation Payment” shall have the meaning set forth in Section 6(a)(i).

“Constructive Termination” shall mean, without your written consent: (a) a material failure of the Company to comply with the provisions of this agreement, (b) a material diminution of your position (including status, offices, title and reporting relationships), duties or responsibilities or pay, (c) any purported termination of your employment other than for Cause, or (d) if you are required to relocate more than 50 miles from the Company’s Tampa, Florida location; provided however, that any isolated, insubstantial or inadvertent change, condition, failure or breach described under subsections (a) – (d) above which is not taken in bad faith and is remedied by the Company promptly after the Company’s actual receipt of notice from you as provided in section 6(d) shall not constitute Constructive Termination. For purposes of this Agreement, a material diminution in pay shall not be deemed to have occurred if the amount of your bonus fluctuates due to (i) a failure of the Company to meet financial targets or performance considerations under the Company’s executive incentive plan or other Company incentive plan applicable to you and in effect from time to time, or (ii) you experience a reduction in salary that is relatively comparable to reductions imposed upon all senior executives in the Company. To be entitled to severance benefits on the basis of Constructive Termination the event causing Constructive Termination must not be implemented for the purpose of avoiding the restrictions of the Code Section 409A restrictions.

“Developments” shall have the meaning set forth in Section 4.

“Disability” shall mean (a) your inability or failure to perform your duties hereunder for a period of ninety (90) consecutive days or a total of one hundred twenty (120) days during any twelve (12) month period due to any physical or mental illness or impairment, or (b) a determination by a medical doctor chosen by the Company to the effect that you are substantially unable to perform your duties hereunder due to any physical or mental illness or impairment.

“HCM” shall have the meaning set forth in the introductory paragraph of this Agreement.

“Involuntary Termination” shall mean your termination from employment due to the independent exercise of unilateral authority by the Company to terminate your services, other than due to your implicit or explicit request, where you are willing and able to continue performing services. The determination of whether a termination of employment is involuntary is based on all the facts and circumstances. Any reference in this Agreement to “termination of employment” shall mean “separation from service” within the meaning of Treas. Reg. 1.409A-1(h).

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“JWHHC” shall have the meaning set forth in the introductory paragraph of this Agreement.

“Prorated Bonus” shall have the meaning set forth in Section 6(a)(iii).

“Restricted Area” shall mean the residential real estate mortgage servicing and directly related industries in which the Company competes at the time of your separation.

“Retirement” shall mean, your voluntary termination of employment after such time as either you have reached the age of 60, or the sum of your age and years of service with the Company exceeds 70; provided, however, that, in either case, you provide the Company with at least 6 months written notice of your intention to retire, or such lesser time as the Company may agree.

“Term” shall have the meaning set forth in the introductory paragraph of this Agreement.

“Vacation Payment” shall have the meaning set forth in Section 6(a)(ii).

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APPENDIX 2
SEPARATION AGREEMENT
AND GENERAL RELEASE OF CLAIMS

     This Separation Agreement and General Release of Claims (“Release”) is entered into by and between Walter Investment Management Corp., and its subsidiaries, predecessors, successors, assigns, affiliates, insurers and related entities, (hereinafter collectively referred to as “Employer”) and ___(hereinafter “Employee”). In consideration for the mutual promises set forth below, Employer and Employee agree as follows:

     1. Employer and Employee are parties to a contract of employment (“Employment Contract”) to which this Release has been attached and incorporated by reference. Employee’s employment with Employer has been terminated and, pursuant to the terms of the Employment Contract, Employee must execute this Release in order to receive the severance set forth in the Employment Contract.

     2. In consideration for the promises and covenants set forth in the Employment Contract and this Release, including, specifically but without limitation, the general release set forth in paragraph 3 below, Employee will be paid [insert the severance set forth in the appropriate subsection of section 6 of the Employment Contract]. Payments to Employee will be made at such times as are set forth in the Employment Contract.

     3. Employee agrees, on behalf of himself, and his heirs, successors in interest and assigns that, except as specifically provided herein, Employee will not file, or cause to be filed, any charges, lawsuits, or other actions of any kind in any forum against Employer and/or its officers, directors, employees, agents, successors and assigns and does hereby further release and discharge Employer and its officers, directors, employees, agents, successors and assigns from any and all claims, causes of action, rights, demands, and obligations of whatever nature kind or character which you may have, known or unknown, against them (including those seeking equitable relief) alleging, without limitation, breach of contract or any tort, legal actions under title VII of the Civil Rights Act of 1964, as amended, Section 1981 of the Civil Rights Act of 1966, as amended, the Rehabilitation Act of 1973, as amended, the Employee Retirement Income Security Act of 1974, as amended, the Fair Labor Standards Act of 1938, as amended, the Age Discrimination in Employment Act of 1967, as amended, (the “ADEA”) (except to the extent claims under the ADEA arise after the date on which this Release is signed by Employee), the Americans with Disability Act, the Civil Rights Act of 1991, or any State, Federal, or local law concerning age, race, religion, national origin, handicap, or any other form of discrimination, or any other State, Federal, or common law or regulation relating in any way to, Employee’s employment with the Company or Employee’s separation from the Company, including any and all future claims, except claims arising in connection with rights and obligations under this Release or as specifically provided in paragraph 4 or 6 below. Employee further agrees to waive and release any claim for damages occurring at any time after the date of this Release because of any alleged continuing effect of any alleged acts or omissions involving Employee and/or Employer which occurred on or before the date of this Release.

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     4. Notwithstanding anything contained in this Release to the contrary, the general release set forth in paragraph 3 shall not apply to any claims under any equity, option or other Employer incentive plan or award, which shall be governed by the terms and conditions of such plan(s) or award; nor shall it affect any rights or obligations that Employee or Employer may have pursuant to the Indemnification Agreement entered into between Employee and Employer as of April 17, 2009.

     5. This Release shall not in any way be construed as an admission by Employer or Employee that they have acted wrongfully with respect to each other or that one party has any rights whatsoever against the other or the other released parties.

     6. Employee and Employer specifically acknowledge the following:

a.	Employee does not release or waive any right or claim which Employee may have which arises after the date of this Release.
b.	In exchange for this general release, Employee acknowledges that Employee has received separate consideration beyond that which Employee is otherwise entitled to under Employer’s policy or applicable law.
c.	Employee is releasing, among other rights, all claims and rights under the Age Discrimination in Employment Act (“ADEA”) and the Older Workers’ Benefit Protection Act (“OWBPA”), 29 U.S.C. §621, et seq.
d.	Employee has twenty-one (21) days to consider this Release.
e.	Employee has seven (7) days to revoke this Release after acceptance. However, no consideration will be paid until after the revocation of the acceptance period has expired. Additionally, for the revocation to be effective, Employee must give written notice of Employee’s revocation to Employer’s General Counsel.

     7. Should Employee breach any provision of this Release, the Employer’s obligation to continue to pay the consideration set forth herein shall cease and Employer shall have no further obligation to Employee. All other terms and conditions of this Release, including, but not limited to, the general release in paragraph 3 shall remain in full force and effect. Should Employer breach any provision of this Release, the Employee’s obligations hereunder shall cease and Employee shall have no further obligations pursuant to this Release.

     8. Employer and Employee agree that in the event it becomes necessary to enforce any provision of this Release, the prevailing party in such action shall be entitled to recover all their costs and attorneys’ fees, including those associated with appeals.

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     9. This Release shall be binding upon Employer, Employee and upon Employee’s heirs, administrators, representatives, executors, successors and assigns, and shall inure to the benefit of Employer and the other released parties and their successors and assigns.

     10. Employee and Employer acknowledge that this Release and the Employment Contract shall be considered as one document and that, except as set forth herein and therein, including without limitation the provisions of paragraphs 4 and 6 of this Release, any and all prior understandings and agreements between the parties to this Release with respect to the subject matter of this Release and/or the Employment Contract are merged into the Employment Contract and this Release, which fully and completely expresses the entire understanding of the parties with respect to the subject matter hereof and thereof.

     11. Should any provision of this Release be declared or be determined by any Court to be illegal or invalid, the validity of the remaining parts, terms or provisions shall not be affected thereby and said illegal or invalid part, term or provision shall be deemed not to be a part of this Release.

     12. This Release may be executed in one or more counterparts, each of which shall be deemed an original and all of which shall constitute one and the same instrument.

[EMPLOYEE NAME]	WALTER INVESTMENT MANAGEMENT CORP.
	By:
Date:	Name Printed:
	Title:
	Date:

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EX-10.5

Exhibit 10.5

March 15, 2010

Charles E. Cauthen
1105 Valladolid de Avila
Tampa, FL 33613

Dear Charles:

On or about December 23, 2008, you entered into an agreement pursuant to which you would act as the President and Chief Operating Officer of Walter Investment Management Corp. (the “Company”), the surviving entity following the merger of the financing business of JWH Holding Company, LLC (“JWHHC”) with Hanover Capital Mortgage Holdings, Inc. (“HCM”) pursuant to the Agreement and Plan of Merger entered into between JWHHC and HCM. You have been acting in that capacity since April 17, 2009, however, you and the Company agree that there is a need to clarify or amend certain of the provisions of your existing agreement. This letter is intended to amend and restate your existing agreement and this agreement (the “Agreement”) will be the sole obligation of the Company with respect to your employment; it being specifically understood that this Agreement does not supersede any provisions of any individual long term incentive or other benefit plans or programs to which you may be a party. The “Term” of this Agreement shall continue until the close of business on April 16, 2011. Thereafter, the Term shall automatically extend annually for one year terms unless and until terminated as provided herein. The purpose of this Agreement is to ratify and confirm your acceptance of the terms of your employment. All capitalized terms that are not defined herein are defined in Appendix 1 hereto.

1.	As President and Chief Operating Officer of the Company, you shall report to and serve at the direction of the Chairman and Chief Executive Officer of the Company. In your capacity as President and Chief Operating Officer, you will be responsible for managing all aspects of the business including financial and strategic issues, as well as growth and return objectives.
2.	Your compensation package will be as follows:

(a)	Base Salary
	Your Base Salary will be $400,000 per year which shall be subject to annual review and increase (but not decrease) by the Compensation Committee and paid in accordance with the payroll practices of the Company, as they may change from time to time.

www.walterinvestment.com

(b)	Bonus
	Your annual target bonus will be, at a minimum, 100% of your Base Salary, or $400,000 at your current Base Salary, with the potential to increase your bonus to a maximum of 200% of your target bonus or $800,000 at your current Base Salary; provided, however, that the actual amount of your bonus will be dependent upon the achievement of the Company’s annual financial and other goals consistent with those established for other members of executive management, as well as the accomplishment of individual objectives, established annually by the Board of Directors (the actual bonus awarded to you in any given year, which may be greater or less than your target bonus being referred to as your “Annual Bonus” for that year). Except as provided in sections 6(a), (b), (d), and (e) below to receive a bonus you must be employed through the end of the year for which the bonus is payable (the “Bonus Year”). The bonus for a Bonus Year will be payable to you during the next following year (the “Bonus Payment Year”) immediately upon the closing of the Company’s books for the Bonus Year, but not later than March 14 of the Bonus Payment Year (the date of payment being the “Bonus Payment Date”).
(c)	Benefits

(i)	You will be entitled to receive from the Company prompt reimbursement for all reasonable out-of-pocket business expenses incurred by you in the performance of your duties hereunder, in accordance with the most favorable policies, practices and procedures of the Company relating to reimbursement of business expenses incurred by Company directors, officers or employees in effect at any time during the 12 month period preceding the date you incur the expenses; provided, however, that any such expense reimbursement will be made no later than the last day of the calendar year following the calendar year in which you incur the expense, will not affect the expenses eligible for reimbursement in any other calendar year, and cannot be liquidated or exchanged for any other benefit.
(ii)	Participation in the Company’s group life and health insurance benefit programs generally applicable to executives in the location in which you are primarily based, and in accordance with their terms, as they may change from time to time.
(iii)	Participation in the Company’s retirement plan, generally applicable to salaried employees in the location in which you are primarily based, as it may change from time to time and in accordance with its terms. Your eligibility to participate will be consistent with the requirements of ERISA.

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(iv)	Participation in the Company’s long-term incentive plan(s) in effect from time to time. For 2010, your annual long-term incentive opportunity will have a targeted economic value of , at a minimum, $420,000. Thereafter, the annual economic value shall be determined by the Compensation Committee. The components of any award and the methodology for determining the economic value shall be as provided in the plan(s) or otherwise as determined by the Compensation Committee in its discretion. Notwithstanding the foregoing, except to the extent inconsistent with the terms and conditions of the plan(s), any award agreements shall be consistent with the terms and conditions of this Agreement. In particular, with respect to the award of annual equity grants any such grants will (a) vest over a period that is no longer than one-third per year for three years, (b) option grants will have a minimum 10-year term and (c) upon your death, Disability, your Constructive Termination, Retirement, or upon a Change of Control vesting will accelerate. Subject to the foregoing, the specific terms of your annual long-term incentive opportunity will be mutually agreed upon and set forth in separate grant agreements.
(v)	30 days of annual vacation to be used each year, without carryover of unused vacation days, and in accordance with the Company’s vacation policy, as it may change from time to time.
(vi)	You will receive a monthly auto allowance of $1,500, subject to the usual withholding taxes.
(vii)	Your Benefits under this Agreement, including grants to you under the Company’s long-term incentive plan(s), will be subject to periodic review and increase by the Compensation Committee.

(d) Recapitalization

     Any equity award agreement will provide that in the event of any change in the capitalization of the Company such as a stock spilt or a corporate transaction such as a merger, consolidation, separation or otherwise, the number and class of RSU’s or options, as the case may be, shall be equitably adjusted by the Company’s Compensation and Human Resources Committee, in its sole discretion, to prevent dilution or enlargement of rights.

3. It is agreed and understood that your employment with the Company is to be at will, and either you or the Company may terminate the employment relationship at any time for any reason, with or without cause, and with or without notice to the other; nothing herein or elsewhere constitutes or shall be construed as a commitment to employ you for any period of time.

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4.	You agree that all inventions, improvements, trade secrets, reports, manuals, computer programs, systems, tapes and other ideas and materials developed or invented by you during the period of your employment with the Company, either solely or in collaboration with others, which relate to the actual or anticipated business or research of the Company, which result from or are suggested by any work you may do for the Company, or which result from use of the Company’s premises or the Company’s or its customers’ property (collectively, the “Developments”) shall be the sole and exclusive property of the Company. You hereby assign to the Company your entire right and interest in any such Developments, and will hereafter execute any documents in connection therewith that the Company may reasonably request.
5.	As an inducement to the Company to make this offer to you, you represent and warrant that you are not a party to any agreement or obligation for personal services, and there exists no impediment or restraint, contractual or otherwise on your power, right or ability to accept this offer and to perform the duties and obligations specified herein.
6.	In the event of a termination or cessation of your employment with the Company for any reason, the sole rights and obligations of the Company in connection with your termination shall be those provided under the relevant provision below.

(a)	In the event of your death or Retirement during the Term, the Company will pay to you, your beneficiaries or your estate, as the case may be, as soon as practicable after your death or Retirement (with the exception of subsection (iii) below which will be paid in the Bonus Payment Year), (i) the unpaid Base Salary through the date of your death or Retirement, plus payment of any bonus amount payable to you (as determined by the Compensation Committee) in respect of any bonus period ended prior to your termination of employment (collectively, the “Compensation Payments”), (ii) for any accrued but unused vacation days, to the extent and in the amounts, if any, provided under the Company’s usual policies and arrangements (the “Vacation Payment”), and (iii) the Annual Bonus, in respect of the fiscal year in which your termination occurs (which shall be in an amount that is consistent with other Company executives of your level), multiplied by (x) the number of days prior to your termination during such fiscal year, divided by (y) 365 (the “Prorated Bonus”).
(b)	In the event you suffer a Disability the Company may terminate your employment on written notice thereof, and the Company will pay you (i) amounts payable pursuant to the terms of any applicable disability insurance policy or similar arrangement (if any) that the Company maintains, (ii) the Compensation Payments, (iii) the Vacation Payment and (iv) the Prorated Bonus.
(c)	In the event your employment is terminated by the Company for Cause or by you other than as a result of Constructive Termination, Disability, Retirement, or death, the

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Company will pay to you (i) unpaid Base Salary through the date of your termination, plus (ii) the Vacation Payment, and you will be entitled to no other compensation, except as otherwise due to you under applicable law or the terms of any applicable plan or program. You will not be entitled, among other things, to the payment of any unpaid bonus payments in respect of any period prior to your termination of employment.

(d) In the event you are subjected to Involuntary Termination other than for Cause, Disability or death, or you terminate your employment as a result of Constructive Termination, the Company will (i) pay to you the Compensation Payments, the Vacation Payment, and the Prorated Bonus, (ii) continue to pay your Base Salary then in effect, and Annual Bonus (which shall be in an amount that is consistent with other Company executives of your level), in each case then in effect, for a period of 18 months after your termination, paid in the same periodic installments as such Base Salary, and during the same Bonus Payment Year (as the case may be) as you would have been paid had you remained on the Company’s ordinary payroll during such period; and (iii) continued participation in benefits, to the extent the plans allow, until the earlier of the 18-month anniversary of the termination date or until you are eligible to receive comparable benefits from subsequent employment or government assistance. For purposes of clarification, the period of the foregoing severance for salary, bonus and benefits shall be 18 months regardless of how much time remains in the then current Term of this Agreement. In other words, there shall be no adjustment, up or down, to the amount of severance regardless of the amount of time remaining in the then current Term at the time of termination. Moreover, you will remain entitled to the foregoing severance notwithstanding the Company’s failure to extend any Term beyond its expiration date. Regarding your Annual Bonus, by way of example should you be terminated on June 30 of 2010, you will be paid the Prorated Bonus for the year in which you were terminated (which is equal to the Annual Bonus for such year prorated for the period from the Effective Date through June 30), plus the balance of the Bonus for 2010 (i.e., the Annual Bonus for the first six months of your 18 month severance period), plus the full Annual Bonus for 2011 (the Annual Bonus for the remaining 12 months of the 18 month severance period). Payment of the foregoing severance is subject to your execution, delivery and non-revocation of the release attached hereto as Appendix 2 within thirty (30) days following the termination of your employment, and your resignation, effective as of the date of your termination of employment, as an officer and/or director of the Company or any of its subsidiaries or affiliates. The COBRA election period will not commence until the expiration of that 18-month period. The amount of expenses eligible for reimbursement, or in-kind benefits provided, during a calendar year may not affect the expenses eligible for reimbursement, or the in-kind benefits to be provided, in any other calendar year. Your right to reimbursement or in-kind benefits is not subject to liquidation or exchange for another benefit. Payment will be provided only if the filing of the claim for payment and completion of the reimbursement payment can reasonably be

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completed by the end of the calendar year following the year in which the expense is incurred. In order to be entitled to the foregoing in the event of Constructive Termination you must provide written notice, including details describing the basis of your claim, to the Company within 60 days of the occurrence of the event(s) giving rise to a claim of Constructive Termination and the Company will have 30 days to remedy any non-compliance. In the event the Company fails or is unable to remedy any non-compliance, the effective date of your termination of employment shall be 90 days from the date the Company received notice, unless otherwise agreed by you and the Company. Should you fail to provide the foregoing notice, you will thereafter be barred from receiving benefits based upon the events giving rise to the claim.

(e)

In the event that, during the term of this Agreement (i) Mark O’Brien shall cease to be the Chief Executive Officer of the Company (“CEO”); and (ii) someone other than you is named as the CEO (“Third Party CEO”) to succeed Mr. O’Brien then, subject to the conditions set forth below, you will be entitled to terminate your employment with the Company (termination for “Special Cause”). Your right to terminate for Special Cause shall be subject to the following; (w) you shall continue to serve in your then current role with the Company until the one year anniversary of the commencement of employment of the Third Party CEO; (x) you shall not have declined to accept the position of CEO, provided that the position is accepted by the Third Party CEO on terms and conditions that are, in the aggregate, less than or equal to those offered to you; (y) you shall have provided the Third Party CEO with written notice of your intention to exercise your option to terminate for Special Cause no less than 60 days prior to the one year anniversary of the Third Party CEO’s employment; and (z) your execution and delivery of the release attached hereto as Appendix 2 effective as of the last day of your employment and the expiration of the seven day revocation period set forth therein without your having revoked the release. Should you terminate your employment for Special Cause, subject to the foregoing, you will receive severance equal to your Compensation Payments and Vacation Payments. In addition, you will continue to receive your Base Salary and Annual Bonus, in each case then in effect, for a period of 12 months after your termination, paid in the same periodic installments as such Base Salary, and during the same Bonus Payment Year (as the case may be) as you would have been paid had you remained on the Company’s ordinary payroll during such period. The Annual Bonus will be paid in the manner described in subsection (d), above, provided that it shall be for 12 months rather than 18.

(f)

Treatment of Grants of Equity — Any grants of equity that you may receive subsequent to the date of this Agreement, and the disposition of such awards in the event of the occurrence of any of the circumstances set forth in subsections (a) – (e) above, shall be subject to the terms and conditions of the plan(s) or program(s) under which the awards are granted; provided, however, that to the extent not inconsistent with such plan(s) or program(s), any such awards will provide that, in the event of termination

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pursuant to (i) subsections (a) or (b) above, or as a result of Constructive Termination, all outstanding equity awards will immediately vest, or (ii) subsection (c), (d) or (e) above, other than as a result of Constructive Termination, all unvested awards will be forfeited. In the event of a Change of Control, you will not have the right to terminate your employment, other than as otherwise permitted in this Agreement; however, upon such Change of Control, all unvested equity will immediately vest and all restrictions on any stock awarded shall lapse.

(g) To be entitled to severance benefits under this paragraph you must terminate employment from the Company. For this purpose, your termination of employment must be considered a “separation from service” within the meaning of Code §409A(a)(2)(A)(i) and any guidance or regulations issued thereunder.

7. Non-Compete. It is understood and agreed that you will have substantial relationships with specific businesses and personnel, prospective and existing, vendors, contractors, customers, and employees of the Company that result in the creation of customer goodwill. Therefore, following the termination of employment under this Agreement for any reason and continuing for a period of eighteen (18) months from the date of such termination, so long as the Company or any subsidiary, affiliate, successor or assigns thereof is in the real estate investment trust/mortgage servicing business/insurance agency or like business within the Restricted Area (defined as the real estate investment trust/mortgage industries in which the Company competes at the time of your separation), unless the Board of Directors approves an exception, you shall not, directly or indirectly, for yourself or on behalf of, or in conjunction with, any other person, persons, company, partnership, corporation, business entity or otherwise:

(a)

Call upon, solicit, write, direct, divert, influence, or accept business (either directly or indirectly) with respect to any account or customer or prospective customer of the Company or any corporation controlling, controlled by, under common control with, or otherwise related to the Company, including but not limited to Walter Investment Management Corp., Hanover Capital Mortgage Holdings, Inc., Walter Mortgage Company, or any other affiliated companies; or

(b)

Hire away any independent contractors or personnel of the Company and/or entice any such persons to leave the employ of the Company or its affiliated entities without the prior written consent of the Company

8. Non-Disparagement. Following the termination of employment under this Agreement for any reason and continuing for so long as the Company or any affiliate, successor or assigns thereof carries on the name or like business within the Restricted Area, neither you nor any director or executive officer of the Company shall, directly or indirectly, for yourself or itself, or on behalf of, or in conjunction with, any other person, persons, company, partnership, corporation, business entity or otherwise:

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(a)	Make any statements or announcements or permit anyone to make any public statements or announcements concerning your termination with the Company, or
(b)	Make any statements that are inflammatory, detrimental, slanderous, or negative in any way to the interests of you or the Company or its affiliated entities as the case may be.
(c)	Nothing in this section shall prevent either party from testifying or responding truthfully to any request for discovery or testimony in any judicial or quasi-judicial proceeding or any government inquiry, investigation or other proceeding.

9.	You acknowledge and agree that you will respect and safeguard the Company’s property, trade secrets and confidential information. You acknowledge that the Company’s electronic communication systems (such as email and voicemail) are maintained to assist in the conduct of the Company’s business and that such systems and data exchanged or stored thereon are Company property. In the event that you leave the employ of the Company, you will not disclose any Company trade secrets or confidential information you acquired while an employee of the Company to any other person or entity, including without limitation, a subsequent employer, or use such information in any manner.
10.	Tax Compliance Delay in Payment. If the Company reasonably determines that any payment or benefit due under this Agreement, or any other amount that may become due to you after termination of employment, is subject to Section 409A of the Code, and also determines that you are a “specified employee,” as defined in Section 409A(a)(2)(B)(i) of the Code, upon your termination of employment for any reason other than death (whether by resignation or otherwise), no amount may be paid to you or on your behalf earlier than six months after the date of your termination of employment (or, if earlier, your death) if such payment would violate the provisions of Section 409A of the Code and the regulations issued thereunder, and payment shall be made, or commence to be made, as the case may be, on the date that is six months and one day after your termination of employment (or, if earlier, one day after your death). For this purpose, you will be considered a “specified employee” if you are employed by an employer that has its stock publicly traded on an established securities market or certain related entities have their stock traded on an established securities market and you are a “key employee”, with the exact meaning of “specified employee”, “key employee” and “publicly traded” defined in Section 409A(a)(2)(B)(i) of the Code and the regulations thereunder. Notwithstanding the above, the Company hereby retains discretion to make determinations regarding the identification of “specified employees” and to take any necessary corporate action in connection with such determination.
11.	You acknowledge and agree that you have read this letter agreement carefully, have been advised by the Company to consult with an attorney regarding its contents, and that you fully understand the same.

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12.

It is agreed and understood that this acceptance letter shall constitute our entire agreement with respect to the subject matter hereof and shall supersede all prior agreements, discussions, understandings and proposals (written or oral) relating to your employment with the Company. This letter agreement will be interpreted under and in accordance with the laws of the State of Florida without regard to conflicts of laws. Any dispute over the terms and conditions or application of this Agreement shall be resolved through non- binding arbitration pursuant to the rules of the American Arbitration Association (“AAA”). The arbitration will be heard by one arbitrator to be chosen as provided by the rules of the AAA and shall be held in Tampa, Florida. In the event the dispute is not resolved through arbitration, either party may submit the matter to the courts of the State of Florida situated in Tampa, Florida. In either case, if you prevail in the dispute, the Company will pay your reasonable fees and costs in connection with the matter (including attorneys fees). Whether you have prevailed or not shall be determined by the arbitrator or the court, as the case may, or if the arbitrator or the court declines to determine whether or not you have prevailed, you will de deemed to have prevailed if, in the case of monetary damages you receive in excess of 50% of what you demanded. Notwithstanding the foregoing, in the event of a breach or threatened breach of the provisions of section 7-9, the party that is in breach or in threatened breach acknowledges and agrees that the other party will suffer irreparable harm that is not subject to being cured with monetary damages and that the Company shall be entitled to injunctive relief in a state court of the State of Florida.

13.

You and the Company intend that payments and benefits under this Agreement comply with Code Section 409A and the regulations and guidance promulgated thereunder (collectively “Code Section 409A”) and, accordingly, to the maximum extent permitted, this Agreement shall be interpreted to be in compliance therewith. In the event that any provision of this Agreement is determined by you or the Company to not comply with Code Section 409A, the Company shall fully cooperate with you to reform the Agreement to correct such noncompliance to the extent permitted under any guidance, procedure, or other method promulgated by the Internal Revenue Service now or in the future that provides for such correction as a means to avoid or mitigate any taxes, interest, or penalties that would otherwise be incurred by you on account of such non-compliance.

If the terms contained within this letter are acceptable, please sign one of the enclosed copies and return it to me in the envelope provided and retain one copy for your records.

Very truly yours,

Walter Investment Management Corp.

By: Mark J. O’Brien
Its: Chairman and Chief Executive Officer

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ACCEPTANCE

I have read the foregoing, have been advised to consult with counsel of my choice concerning the same, and I fully understand the same. I approve and accept the terms set forth above as governing my employment relationship with the Company.

Signature Date

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APPENDIX 1
DEFINITIONS

“Agreement” shall have the meaning set forth in the introductory paragraph to this Agreement.

“Annual Bonus” shall have the meaning set forth in Section 2(b) to this Agreement.

“Base Salary” shall have the meaning set forth in Section 2(a) of this Agreement.

“Bonus Payment Date” shall have the meaning set forth in Section 2(b) to this Agreement.

“Bonus Payment Year” shall have the meaning set forth in Section 2(b) to this Agreement.

“Bonus Year” shall have the meaning set forth in Section 2(b) to this Agreement.

“Cause” shall mean (A) conviction of, or plea of guilty or nolo contendere to, a felony arising from any act of fraud, embezzlement or willful dishonesty in relation to the business or affairs of the Company, or (B) conviction of, or plea of guilty or nolo contendere to, any other felony which is materially injurious to the Company or its reputation or which compromises your ability to perform your job function, and/or act as a representative of the Company, or (C) a willful failure to attempt to substantially perform your duties (other than any such failure resulting from your Disability), after a written demand for substantial performance is delivered to the you that specifically identifies the manner in which the Company believes that you have not attempted to substantially perform such duties, and you have failed to remedy the situation, to the extent possible, within fifteen (15) business days of such written notice from the Company or such longer time as may be reasonably required to remedy the situation, but no longer than forty-five (45) calendar days. For purposes of this definition, no act or failure to act on your part shall be considered to be Cause if done, or omitted to be done, by you in good faith and with the reasonable belief that the action or omission was in the best interests of, or were not, in fact, materially detrimental to, the Company or a Company subsidiary. The decision to terminate your employment for Cause, to take other action or to take no action in response to such occurrence shall be in the sole and exclusive discretion of the Board of Directors. If the Board of Directors terminates your employment for Cause, the Company shall deliver written notice of such termination to you, which notice shall include the factual basis for your termination, and such termination shall be effective immediately upon service of such written notice.

“Change of Control” shall mean a change of ownership of the Company, a change in the effective control of the Company, or a change in the ownership of a substantial portion of the assets of the Company within the meaning of Treas. Reg. 1.409A-3(i)(5).

“Company” shall have the meaning set forth in the introductory paragraph to this Agreement.

“Compensation Committee” shall mean the Compensation and Human Resources Committee of Walter Investment Management Corp.

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“Compensation Payment” shall have the meaning set forth in Section 6(a) to this Agreement.

“Constructive Termination” shall mean, without your written consent: (a) a material failure of the Company to comply with the provisions of this agreement, (b) a material diminution of your position (including status, offices, title and reporting relationships), duties or responsibilities or pay, (c) any purported termination of your employment other than for Cause, or (d) the forced relocation of your primary job location more than 50 miles from the Company’s Tampa, Florida location; provided however, that any isolated, insubstantial or inadvertent change, condition, failure or breach described under subsections (a) – (d) above which is not taken in bad faith and is remedied by the Company promptly after the Company’s actual receipt of notice from you as provided in section 6(d) shall not constitute Constructive Termination. For purposes of this Agreement, a material diminution in pay or responsibility shall not be deemed to have occurred if: (i) the amount of your bonus fluctuates due to performance considerations under the Company’s executive incentive plan or other Company incentive plan applicable to you and in effect from time to time, (ii) you are transferred to a position of comparable responsibility, status, title, office and compensation within the Company, or (iii) you experience a reduction in salary that is relatively comparable to reductions imposed upon all senior executives in the Company. To be entitled to severance benefits on the basis of Constructive Termination the event causing Constructive Termination must not be implemented for the purpose of avoiding the restrictions of the Code Section 409A restrictions.

“Developments” shall have the meaning set forth in Section 4 to this Agreement.

“Disability” shall mean (a) your inability or failure to perform your duties hereunder for a period of ninety (90) consecutive days or a total of one hundred twenty (120) days during any twelve (12) month period due to any physical or mental illness or impairment, or (b) a determination by a medical doctor chosen by the Company to the effect that you are substantially unable to perform your duties hereunder due to any physical or mental illness or impairment.

“HCM” shall have the meaning set forth in the introductory paragraph to this Agreement.

“Involuntary Termination” shall mean your termination from employment due to the independent exercise of unilateral authority by Company to terminate your services, other than due to your implicit or explicit request, where you are willing and able to continue performing services. The determination of whether a termination of employment is involuntary is based on all the facts and circumstances. Any reference in this Agreement to “termination of employment” shall mean “separation from service” within the meaning of Treas. Reg. 1.409A-1(h).

“JWHHC” shall have the meaning set forth in the introductory paragraph to this Agreement.

“Prorated Bonus” shall have the meaning set forth in Section 6(a) to this Agreement.

“Retirement” shall mean, your voluntary termination of employment after such time as either, you have reached the age of 60, or the sum of your age and years of service with the Company exceeds 70; provided that, in either case, you provide the Company with at least 6 months written notice of

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your intention to retire, or such lesser time as the Company may agree. For purposes of this definition, your years of service shall include years served with any predecessor or successor companies to the Company.

“Term” shall have the meaning set forth in the introductory paragraph to this Agreement.

“Vacation Payment” shall have the meaning set forth in Section 6(a) to this Agreement.

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APPENDIX 2
SEPARATION AGREEMENT
AND GENERAL RELEASE OF CLAIMS

     This Separation Agreement and General Release of Claims (“Release”) is entered into by and between Walter Investment Management Corp., and its subsidiaries, predecessors, successors, assigns, affiliates, insurers and related entities, (hereinafter collectively referred to as “Employer”) and                      (hereinafter “Employee”). In consideration for the mutual promises set forth below, Employer and Employee agree as follows:

     1. Employer and Employee are parties to a contract of employment (“Employment Contract”) to which this Release has been attached and incorporated by reference. Employee’s employment with Employer has been terminated and, pursuant to the terms of the Employment Contract, Employee must execute this Release in order to receive the severance set forth in the Employment Contract.

     2. In consideration for the promises and covenants set forth in the Employment Contract and this Release, including, specifically but without limitation, the general release set forth in paragraph 3 below, Employee will be paid [insert the severance set forth in the appropriate subsection of section 6 of the Employment Contract]. Payments to Employee will be made at such times as are set forth in the Employment Contract.

     3. Employee agrees, on behalf of himself, and his heirs, successors in interest and assigns that, except as specifically provided herein, Employee will not file, or cause to be filed, any charges, lawsuits, or other actions of any kind in any forum against Employer and/or its officers, directors, employees, agents, successors and assigns and does hereby further release and discharge Employer and its officers, directors, employees, agents, successors and assigns from any and all claims, causes of action, rights, demands, and obligations of whatever nature kind or character which you may have, known or unknown, against them (including those seeking equitable relief) alleging, without limitation, breach of contract or any tort, legal actions under title VII of the Civil Rights Act of 1964, as amended, Section 1981 of the Civil Rights Act of 1966, as amended, the Rehabilitation Act of 1973, as amended, the Employee Retirement Income Security Act of 1974, as amended, the Fair Labor Standards Act of 1938, as amended, the Age Discrimination in Employment Act of 1967, as amended, (the “ADEA”) (except to the extent claims under the ADEA arise after the date on which this Release is signed by Employee), the Americans with Disability Act, the Civil Rights Act of 1991, or any State, Federal, or local law concerning age, race, religion, national origin, handicap, or any other form of discrimination, or any other State, Federal, or common law or regulation relating in any way to, Employee’s employment with the Company or Employee’s separation from the Company, including any and all future claims, except claims arising in connection with rights and obligations under this Release or as specifically provided in paragraph 4 or 6 below. Employee further agrees to waive and release any claim for damages occurring at any time after the date of this Release because of any alleged continuing effect of any alleged acts or omissions involving Employee and/or Employer which occurred on or before the date of this Release.

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     4. Notwithstanding anything contained in this Release to the contrary, the general release set forth in paragraph 3 shall not apply to any claims under any equity, option or other Employer incentive plan or award, which shall be governed by the terms and conditions of such plan(s) or award; nor shall it affect any rights or obligations that Employee or Employer may have pursuant to the Indemnification Agreement entered into between Employee and Employer as of April 17, 2009.

     5. This Release shall not in any way be construed as an admission by Employer or Employee that they have acted wrongfully with respect to each other or that one party has any rights whatsoever against the other or the other released parties.

     6. Employee and Employer specifically acknowledge the following:

a.	Employee does not release or waive any right or claim which Employee may have which arises after the date of this Release.
b.	In exchange for this general release, Employee acknowledges that Employee has received separate consideration beyond that which Employee is otherwise entitled to under Employer’s policy or applicable law.
c.	Employee is releasing, among other rights, all claims and rights under the Age Discrimination in Employment Act (“ADEA”) and the Older Workers’ Benefit Protection Act (“OWBPA”), 29 U.S.C. §621, et seq.
d.	Employee has twenty-one (21) days to consider this Release.
e.	Employee has seven (7) days to revoke this Release after acceptance. However, no consideration will be paid until after the revocation of the acceptance period has expired. Additionally, for the revocation to be effective, Employee must give written notice of Employee’s revocation to Employer’s General Counsel.

     7. Should Employee breach any provision of this Release, the Employer’s obligation to continue to pay the consideration set forth herein shall cease and Employer shall have no further obligation to Employee. All other terms and conditions of this Release, including, but not limited to, the general release in paragraph 3 shall remain in full force and effect. Should Employer breach any provision of this Release, the Employee’s obligations hereunder shall cease and Employee shall have no further obligations pursuant to this Release.

     8. Employer and Employee agree that in the event it becomes necessary to enforce any provision of this Release, the prevailing party in such action shall be entitled to recover all their costs and attorneys’ fees, including those associated with appeals.

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     9. This Release shall be binding upon Employer, Employee and upon Employee’s heirs, administrators, representatives, executors, successors and assigns, and shall inure to the benefit of Employer and the other released parties and their successors and assigns.

     10. Employee and Employer acknowledge that this Release and the Employment Contract shall be considered as one document and that, except as set forth herein and therein, including without limitation the provisions of paragraphs 4 and 6 of this Release, any and all prior understandings and agreements between the parties to this Release with respect to the subject matter of this Release and/or the Employment Contract are merged into the Employment Contract and this Release, which fully and completely expresses the entire understanding of the parties with respect to the subject matter hereof and thereof.

     11. Should any provision of this Release be declared or be determined by any Court to be illegal or invalid, the validity of the remaining parts, terms or provisions shall not be affected thereby and said illegal or invalid part, term or provision shall be deemed not to be a part of this Release.

     12. This Release may be executed in one or more counterparts, each of which shall be deemed an original and all of which shall constitute one and the same instrument.

[EMPLOYEE NAME]	WALTER INVESTMENT MANAGEMENT CORP.
	By:
Date:	Name Printed:
	Title:
	Date:

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EX-10.6

Exhibit 10.6

March 15, 2010

Kimberly A. Perez
3314 Sierra Circle
Tampa, FL 33629

Dear Kim:

On or about December 23, 2008, you entered into an agreement pursuant to which you would act as the Vice President and Chief Financial Officer of Walter Investment Management Corp.(the “Company”), the surviving entity following the merger of JWH Holding Company, LLC (“JWHHC”) with Hanover Capital Mortgage Holdings, Inc. (“HCM”) pursuant to the Agreement and Plan of Merger entered into between JWHHC and HCM. You have been acting in that capacity since April 17, 2009, however, you and the Company agree that there is a need to clarify or amend certain of the provisions of your existing agreement. This letter is intended to amend and restate your existing agreement and this agreement (the “Agreement”) will be the sole obligation of the Company with respect to your employment; it being specifically understood that this Agreement does not supersede any provisions of any individual long term incentive or other benefit plans or programs to which you may be a party. The “Term” of this Agreement shall continue until the close of business on April 16, 2011. Thereafter, the Term shall automatically extend annually for one year terms unless and until terminated as provided herein. The purpose of this Agreement is to ratify and confirm your acceptance of the terms of your employment. All capitalized terms that are not defined herein are defined in Appendix 1 hereto.

1.

As Vice President, Chief Financial Officer and Treasurer, you shall report to and serve at the direction of the President and Chief Operating Officer of the Company or to such other person as may be designated from time to time. In your capacity as Vice President, Chief Financial Officer and Treasurer, you will be responsible for corporate accounting, preparation of financial statements for the Board of Directors, filings with the SEC, establishment of accounting policies and procedures for the Company, timely and reliable financial reporting, and supervision of the accounting, finance, tax, treasury, project management and investor relations staff.

2.

Your compensation package will be as follows:

(a) Base Salary

Your Base Salary will be $236,010 per year which will be subject to review and increase (but not decrease) by the Compensation Committee and paid in accordance with the payroll practices of the Company, as they may change from time to time.

www.walterinvestment.com

(b)	Bonus
	Your annual target bonus will be, at a minimum, 60% of your Base Salary, or $141,606 at your current Base Salary, with the potential to increase your bonus to a maximum of 120% of your Base Salary or $283,212 at your current Base Salary; provided, however, that the actual amount of your bonus will be dependent upon the achievement of the Company’s annual financial and other goals consistent with those established for other members of executive management, as well as the accomplishment of individual objectives, established annually by the Board of Directors (the actual bonus awarded to you in any given year, which may be greater or less than your target bonus is referred to herein as your “Annual Bonus” for that year). Except as provided in sections 6(a), (b), and (d), below to receive a bonus you must be employed through the end of the year for which the bonus is payable (the “Bonus Year”). The bonus for a Bonus Year will be payable to you during the following year (the “Bonus Payment Year”) immediately upon the closing of the Company’s books for the Bonus Year, but not later than March 14 of the Bonus Payment Year (the date of payment being the “Bonus Payment Date”).
(c)	Benefits

(i)	You will be entitled to receive from the Company prompt reimbursement for all reasonable out-of-pocket business expenses incurred by you in the performance of your duties hereunder, in accordance with the most favorable policies, practices and procedures of the Company relating to reimbursement of business expenses incurred by Company directors, officers or employees in effect at any time during the 12 month period preceding the date you incur the expenses; provided, however, that any such expense reimbursement will be made no later than the last day of the calendar year following the calendar year in which you incur the expense, will not affect the expenses eligible for reimbursement in any other calendar year, and cannot be liquidated or exchanged for any other benefit.
(ii)	Participation in the Company’s group life and health insurance benefit programs generally applicable to executives and in accordance with their terms, as they may change from time to time.
(iii)	Participation in the Company’s retirement plan, generally applicable to salaried employees as it may change from time to time and in accordance with its terms. Your eligibility to participate will be consistent with the requirements of ERISA.
(iv)	Participation in the Company’s long-term incentive plan(s) in effect from time to time. For 2010, your annual long-term incentive opportunity will have a targeted economic value equal to, at a minimum, $200,000. Thereafter, the annual economic value shall be determined by the Compensation Committee. The components of any award and the methodology for determining the economic

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	value shall be as provided in the plan(s) or otherwise as determined by the Compensation Committee in its discretion. Notwithstanding the foregoing, except to the extent inconsistent with the terms and conditions of the plan(s), any award agreements shall be consistent with the terms and conditions of this Agreement. In particular, with respect to the award of annual equity grants any such grants will (a) vest over a period that is no longer than one-third per year for three years, (b) option grants will have a minimum 10-year term and (c) upon your death, Disability, Constructive Termination, Retirement, or upon a Change of Control, vesting will accelerate. Subject to the foregoing, the specific terms of your annual long-term incentive opportunity will be mutually agreed upon and set forth in separate grant agreements. as it applies to other executives and subject to terms of the Company’s Long-Term Incentive Plan.
(v)	Four (4) weeks of annual vacation to be used each year in accordance with the Company’s vacation policy, as it may change from time to time.
(vi)	You will receive a monthly auto allowance of $1,000, subject to the usual withholding taxes.
(vii)	Your Benefits under this Agreement, including grants to you under the Company’s long-term incentive plan(s), will be subject to periodic review and increase by the Compensation Committee.

(d)

Recapitalization

Any equity award agreement will provide that in the event of any change in the capitalization of the Company such as a stock spilt or a corporate transaction such as a merger, consolidation, separation or otherwise, the number and class of RSU’s or options, as the case may be, shall be equitably adjusted by the Company’s Compensation and Human Resources Committee, in its sole discretion, to prevent dilution or enlargement of rights.

3.

It is agreed and understood that your employment with the Company is to be at will, and either you or the Company may terminate the employment relationship at any time for any reason, with or without cause, and with or without notice to the other; nothing herein or elsewhere constitutes or shall be construed as a commitment to employ you for any period of time.

4.

You agree that all inventions, improvements, trade secrets, reports, manuals, computer programs, systems, tapes and other ideas and materials developed or invented by you during the period of your employment with the Company, either solely or in collaboration with others, which relate to the actual or anticipated business or research of the Company, which result from or are suggested by any work you may do for the Company, or which result from

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	use of the Company’s premises or the Company’s or its customers’ property (collectively, the “Developments”) shall be the sole and exclusive property of the Company. You hereby assign to the Company your entire right and interest in any such Developments, and will hereafter execute any documents in connection therewith that the Company may reasonably request.
5.	As an inducement to the Company to make this offer to you, you represent and warrant that you are not a party to any agreement or obligation for personal services, and there exists no impediment or restraint, contractual or otherwise on your power, right or ability to accept this offer and to perform the duties and obligations specified herein.
6.	In the event of a termination or cessation of your employment with the Company for any reason, the sole rights and obligations of the Company in connection with your termination shall be those provided under the relevant provision below.

(a)	In the event of your death or Retirement during the Term, the Company will pay to you, your beneficiaries or your estate, as the case may be, as soon as practicable after your death or Retirement (with the exception of subsection (iii) below which will be paid in the Bonus Payment Year), (i) the unpaid Base Salary through the date of your death or Retirement, plus payment of any bonus amount payable to you (as determined by the Compensation Committee) in respect of any bonus period ended prior to your termination of employment (collectively, the “Compensation Payments”), (ii) for any accrued but unused vacation days, to the extent and in the amounts, if any, provided under the Company’s usual policies and arrangements (the “Vacation Payment”), and (iii) the Annual Bonus, in respect of the fiscal year in which your termination occurs (which shall be in an amount that is consistent with other Company executives of your level), multiplied by (x) the number of days prior to your termination during such fiscal year, divided by (y) 365 (the “Prorated Bonus”).
(b)	In the event you suffer a Disability the Company may terminate your employment on written notice thereof, and the Company will pay you (i) amounts payable pursuant to the terms of any applicable disability insurance policy or similar arrangement (if any) that the Company maintains, (ii) the Compensation Payments, (iii) the Vacation Payment and (iv) the Prorated Bonus.
(c)	In the event your employment is terminated by the Company for Cause or by you other than as a result of Constructive Termination, Disability, Retirement, or death, the Company will pay to you (i) unpaid Base Salary through the date of your termination, plus (ii) the Vacation Payment, and you will be entitled to no other compensation, except as otherwise due to you under applicable law or the terms of any applicable plan or program. You will not be entitled, among other things, to the payment of any unpaid bonus payments in respect of any period prior to your termination of employment.
(d)	In the event you are subjected to Involuntary Termination other than for Cause, Disability or death, or you terminate your employment as a result of Constructive Termination, the

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Company will (i) pay to you the Compensation Payments, the Vacation Payment, and the Prorated Bonus, (ii) continue to pay your Base Salary then in effect and Annual Bonus (which shall be in an amount that is consistent with other Company executives of your level), for a period of 12 months after your termination, paid in the same periodic installments as such Base Salary, and during the same Bonus Payment Year (as the case may be) as you would have been paid had you remained on the Company’s ordinary payroll during such period; and (iii) continued participation in benefits, to the extent the plans allow, until the earlier of the 12-month anniversary of the termination date or until you are eligible to receive comparable benefits from subsequent employment or government assistance. For purposes of clarification, the period of the foregoing severance for salary, bonus and benefits shall be 12 months regardless of how much time remains in the then current Term of this Agreement. In other words, there shall be no adjustment, up or down, to the amount of severance regardless of the amount of time remaining in the then current Term at the time of termination. Moreover, you will remain entitled to the foregoing severance notwithstanding the Company’s failure to extend any Term beyond its expiration date. Regarding your Annual Bonus, by way of example should you be terminated on June 30 of 2010, you will be paid the Prorated Bonus for the year in which you were terminated (which is equal to the Annual Bonus for such year prorated for the period from the Effective Date through June 30), plus the balance of the Bonus for 2010 (i.e., the Annual Bonus for the first six months of your 12 month severance period), plus six months of the Annual Bonus for 2011 (the Annual Bonus for the remaining 6 months of the 12 month severance period). Payment of the foregoing severance is subject to your execution, delivery and non-revocation of the release attached hereto as Appendix 2 within thirty (30) days following the termination of your employment, and your resignation, effective as of the date of your termination of employment, as an officer and/or director of the Company or any of its subsidiaries or affiliates. The COBRA election period will not commence until the expiration of that 12-month period. The amount of expenses eligible for reimbursement, or in-kind benefits provided, during a calendar year may not affect the expenses eligible for reimbursement, or the in-kind benefits to be provided, in any other calendar year. Your right to reimbursement or in-kind benefits is not subject to liquidation or exchange for another benefit. Payment will be provided only if the filing of the claim for payment and completion of the reimbursement payment can reasonably be completed by the end of the calendar year following the year in which the expense is incurred. In order to be entitled to the foregoing in the event of Constructive Termination, you must provide written notice, including details describing the basis of your claim, to the Company within 60 days of the occurrence of the event(s) giving rise to a claim of Constructive Termination and the Company will have 30 days to remedy any non-compliance. In the event the Company fails or is unable to remedy any non-compliance, the effective date of your termination of employment shall be 90 days from the date the Company received notice, unless otherwise agreed by you and the Company. Should you fail to provide the foregoing notice, you will thereafter be barred from receiving benefits based upon the events giving rise to the claim.

(e)

Treatment of Grants of Equity — Any grants of equity that you may receive subsequent to the date of this Agreement, and the disposition of such awards in the event of the occurrence of any of the circumstances set forth in subsections (a) — (d) above, shall be subject to the terms and conditions of the plan(s) or program(s) under which the awards are granted; provided,

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however, that to the extent not inconsistent with such plan(s) or program(s), any such awards will provide that, in the event of termination pursuant to (i) subsections (a) or (b) above, or as a result of Constructive Termination, all outstanding equity awards will immediately vest, or (ii) subsection (c) or (d) above, other than as a result of Constructive Termination, all unvested awards will be forfeited, subject to the discretion of the Compensation Committee to vest some or all of such awards. In the event of a Change of Control, you will not have the right to terminate your employment, other than as otherwise permitted in this Agreement; however, upon such Change of Control, all unvested equity will immediately vest and all restrictions on any stock awarded shall lapse.

(f)

To be entitled to severance benefits under this section you must terminate employment from the Company. For this purpose, your termination of employment must be considered a “separation from service” within the meaning of Code §409A(a)(2)(A)(i) and any guidance or regulations issued thereunder.

7. Non-Compete. It is understood and agreed that you will have substantial relationships with specific businesses and personnel, prospective and existing, vendors, contractors, customers, and employees of the Company that result in the creation of customer goodwill. Therefore, following the termination of employment under this Agreement for any reason and continuing for a period of twelve (12) months from the date of such termination, so long as the Company or any affiliate, successor or assigns thereof is in the real estate investment trust/mortgage servicing business/insurance agency or like business within the Restricted Area, unless the Board of Directors approves an exception, you shall not, directly or indirectly, for yourself or on behalf of, or in conjunction with, any other person, persons, company, partnership, corporation, business entity or otherwise:

a.

Call upon, solicit, write, direct, divert, influence, or accept business (either directly or indirectly) with respect to any account or customer or prospective customer of the Company or any corporation controlling, controlled by, under common control with, or otherwise related to the Company, including but not limited to Walter Investment Management Corporation, Hanover Capital Mortgage Holdings, Inc., Walter Mortgage Company, or any other affiliated companies; or

b.

Hire away any independent contractors or personnel of the Company and/or entice any such persons to leave the employ of the Company or its affiliated entities without the prior written consent of the Company

8. Non-Disparagement. Following the termination of employment under this Agreement for any reason and continuing for so long as the Company or any affiliate, successor or assigns thereof carries on the name or like business within the Restricted Area, you shall not, directly or indirectly, for yourself or on behalf of, or in conjunction with, any other person, persons, company, partnership, corporation, business entity or otherwise:

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a.	Make any statements or announcements or permit anyone to make any public statements or announcements concerning your termination with the Company, or
b.	Make any statements that are inflammatory, detrimental, slanderous, or negative in any way to the interests of the Company or its affiliated entities.

9.	You acknowledge and agree that you will respect and safeguard the Company’s property, trade secrets and confidential information. You acknowledge that the Company’s electronic communication systems (such as email and voicemail) are maintained to assist in the conduct of the Company’s business and that such systems and data exchanged or stored thereon are Company property. In the event that you leave the employ of the Company, you will not disclose any Company trade secrets or confidential information you acquired while an employee of the Company to any other person or entity, including without limitation, a subsequent employer, or use such information in any manner.
10.	If any of the Company’s financial statements are required to be restated due to errors, omissions, fraud, or misconduct, the Board of Directors may, in its sole discretion but acting in good faith, direct that the Company recover all or a portion of any past or future compensation from any Participant with respect to any fiscal year of the Company for which the financial results are negatively affected by such restatement. For purposes of this paragraph, errors, omissions, fraud, or misconduct may include and is not limited to circumstances where the Company has been required to prepare an accounting restatement due to material noncompliance with any financial reporting requirement, as enforced by the SEC, and the Board of Directors has determined in its sole discretion that a participant had knowledge of the material noncompliance or the circumstances that gave rise to such noncompliance and failed to take reasonable steps to bring it to the attention of the appropriate individuals within the company, or the participant personally and knowingly engaged in practices which materially contributed to the circumstances that enabled a material noncompliance to occur.
11.	Tax Compliance Delay in Payment. If the Company reasonably determines that any payment or benefit due under this Agreement, or any other amount that may become due to you after termination of employment, is subject to Section 409A of the Code, and also determines that you are a “specified employee,” as defined in Section 409A(a)(2)(B)(i) of the Code, upon your termination of employment for any reason other than death (whether by resignation or otherwise), no amount may be paid to you or on your behalf earlier than six months after the date of your termination of employment (or, if earlier, your death) if such payment would violate the provisions of Section 409A of the Code and the regulations issued thereunder, and payment shall be made, or commence to be made, as the case may be, on the date that is six months and one day after your termination of employment (or, if earlier, one day after your death). For this purpose, you will be considered a “specified employee” if you are employed by an employer that has its stock publicly traded on an established securities market or certain related entities have their stock traded on an established securities market and you are a “key employee”, with the exact meaning of “specified employee”, “key employee” and “publicly traded” defined in Section 409A(a)(2)(B)(i) of the Code and the regulations thereunder.

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	Notwithstanding the above, the Company hereby retains discretion to make determinations regarding the identification of “specified employees” and to take any necessary corporate action in connection with such determination.
12.	You acknowledge and agree that you have read this letter agreement carefully, have been advised by the Company to consult with an attorney regarding its contents, and that you fully understand the same.
13.	It is agreed and understood that this acceptance letter shall constitute our entire agreement with respect to the subject matter hereof and shall supersede all prior agreements, discussions, understandings and proposals (written or oral) relating to your employment with the Company. This Agreement will be interpreted under and in accordance with the laws of the State of Florida without regard to conflicts of laws. Any dispute over the terms and conditions or application of this Agreement shall be resolved through binding arbitration pursuant to the rules of the American Arbitration Association (“AAA”). The arbitration will be heard by one arbitrator to be chosen as provided by the rules of the AAA and shall be held in Tampa, Florida. If you prevail in the dispute, the Company will pay your reasonable fees and costs in connection with the matter (including attorneys fees). Whether you have prevailed or not shall be determined by the arbitrator, or if the arbitrator declines to determine whether or not you have prevailed, you will be deemed to have prevailed if, in the case of monetary damages you receive in excess of 50% of what you demanded. Notwithstanding the foregoing, in the event of a breach or threatened breach of the provisions of section 7-9, the party that is in breach or in threatened breach acknowledges and agrees that the other party will suffer irreparable harm that is not subject to being cured with monetary damages and that the Company shall be entitled to injunctive relief in a state court of the State of Florida.
14.	You and the Company intend that payments and benefits under this Agreement comply with Code Section 409A and the regulations and guidance promulgated thereunder (collectively “Code Section 409A”) and, accordingly, to the maximum extent permitted, this Agreement shall be interpreted to be in compliance therewith. In the event that any provision of this Agreement is determined by you or the Company to not comply with Code Section 409A, the Company shall fully cooperate with you to reform the Agreement to correct such noncompliance to the extent permitted under any guidance, procedure, or other method promulgated by the Internal Revenue Service now or in the future that provides for such correction as a means to avoid or mitigate any taxes, interest, or penalties that would otherwise be incurred by you on account of such non-compliance.

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If the terms contained within this letter are acceptable, please sign one of the enclosed copies and return it to me.

Very truly yours,

Walter Investment Management Corp.

By: Mark O’Brien

     Chairman and CEO

ACCEPTANCE

I have read the foregoing, have been advised to consult with counsel of my choice concerning the same, and I fully understand the same. I approve and accept the terms set forth above as governing my employment relationship with the Company.

Signature Date

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APPENDIX 1
DEFINITIONS

“Agreement” shall have the meaning set forth in the introductory paragraph to this Agreement.

“Annual Bonus” shall have the meaning set forth in Section 2(b) to this Agreement.

“Base Salary” shall have the meaning set forth in Section 2(a) of this Agreement.

“Bonus Payment Date” shall have the meaning set forth in Section 2(b) to this Agreement.

“Bonus Payment Year” shall have the meaning set forth in Section 2(b) to this Agreement.

“Bonus Year” shall have the meaning set forth in Section 2(b) to this Agreement.

“Cause” shall mean (A) conviction of, or plea of guilty or nolo contendere to, a felony arising from any act of fraud, embezzlement or willful dishonesty in relation to the business or affairs of the Company, or (B) conviction of, or plea of guilty or nolo contendere to, any other felony which is materially injurious to the Company or its reputation or which compromises your ability to perform your job function, and/or act as a representative of the Company, or (C) a willful failure to attempt to substantially perform your duties (other than any such failure resulting from your Disability), after a written demand for substantial performance is delivered to you that specifically identifies the manner in which the Company believes that you have not attempted to substantially perform such duties, and you have failed to remedy the situation, to the extent possible, within fifteen (15) business days of such written notice from the Company or such longer time as may be reasonably required to remedy the situation, but no longer than ninety (90) calendar days. For purposes of this definition, no act or failure to act on your part shall be considered to be Cause if done, or omitted to be done, by you in good faith and with the reasonable belief that the action or omission was in the best interests of, or were not, in fact, materially detrimental to, the Company or a Company subsidiary. The decision to terminate your employment for Cause, to take other action or to take no action in response to such occurrence shall be in the sole and exclusive discretion of the Board of Directors. If the Board of Directors terminates your employment for Cause, the Company shall deliver written notice of such termination to you, which notice shall include the factual basis for your termination, and such termination shall be effective immediately upon service of such written notice.

“Change of Control” shall mean a change of ownership of the Company, a change in the effective control of the Company, or a change in the ownership of a substantial portion of the assets of the Company within the meaning of Treas. Reg. 1.409A-3(i)(5).

“Company” shall have the meaning set forth in the introductory paragraph to this Agreement.

“Compensation Committee” shall mean the Compensation and Human Resources Committee of Walter Investment Management Corp.

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“Compensation Payment” shall have the meaning set forth in Section 6(a) to this Agreement.

“Constructive Termination” shall mean, without your written consent: (a) a material failure of the Company to comply with the provisions of this agreement, (b) a material diminution of your position (including status, offices, title and reporting relationships), duties or responsibilities or pay, (c) any purported termination of your employment other than for Cause, or (d) the forced relocation of your primary job location more than 50 miles from the Company’s Tampa, Florida location; provided however, that any isolated, insubstantial or inadvertent change, condition, failure or breach described under subsections (a) — (d) above which is not taken in bad faith and is remedied by the Company promptly after the Company’s actual receipt of notice from you as provided in section 6(d) shall not constitute Constructive Termination. For purposes of this Agreement, a material diminution in pay or responsibility shall not be deemed to have occurred if: (i) the amount of your bonus fluctuates due to performance considerations under the Company’s executive incentive plan or other Company incentive plan applicable to you and in effect from time to time, (ii) you are transferred to a position of comparable responsibility, status, title, office and compensation within the Company, or (iii) you experience a reduction in salary that is relatively comparable to reductions imposed upon all senior executives in the Company. To be entitled to severance benefits on the basis of Constructive Termination the event causing Constructive Termination must not be implemented for the purpose of avoiding the restrictions of the Code Section 409A restrictions.

“Developments” shall have the meaning set forth in Section 4 to this Agreement.

“Disability” shall mean (a) your inability or failure to perform your duties hereunder for a period of ninety (90) consecutive days or a total of one hundred twenty (120) days during any twelve (12) month period due to any physical or mental illness or impairment, or (b) a determination by a medical doctor chosen by the Company to the effect that you are substantially unable to perform your duties hereunder due to any physical or mental illness or impairment.

“HCM” shall have the meaning set forth in the introductory paragraph to this Agreement.

“Involuntary Termination” shall mean your termination from employment due to the independent exercise of unilateral authority by Company to terminate your services, other than due to your implicit or explicit request, where you are willing and able to continue performing services. The determination of whether a termination of employment is involuntary is based on all the facts and circumstances. Any reference in this Agreement to “termination of employment” shall mean “separation from service” within the meaning of Treas. Reg. 1.409A-1(h).

“JWHHC” shall have the meaning set forth in the introductory paragraph to this Agreement.

“Prorated Bonus” shall have the meaning set forth in Section 6(a) to this Agreement.

“Restricted Area” shall mean the real estate investment trust/mortgage industries in which the Company competes at the time of your separation.

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“Retirement” shall mean, your voluntary termination of employment after such time as either, you have reached the age of 60, or the sum of your age and years of service with the Company exceeds 70; provided that, in either case, you provide the Company with at least 6 months written notice of your intention to retire, or such lesser time as the Company may agree. For purposes of this definition, your years of service shall include years served with any predecessor or successor companies to the Company.

“Term” shall have the meaning set forth in the introductory paragraph to this Agreement.

“Vacation Payment” shall have the meaning set forth in Section 6(a) to this Agreement.

-Page 12-

APPENDIX 2
SEPARATION AGREEMENT
AND GENERAL RELEASE OF CLAIMS

     This Separation Agreement and General Release of Claims (“Release”) is entered into by and between Walter Investment Management Corp., and its subsidiaries, predecessors, successors, assigns, affiliates, insurers and related entities, (hereinafter collectively referred to as “Employer”) and                      (hereinafter “Employee”). In consideration for the mutual promises set forth below, Employer and Employee agree as follows:

     1. Employer and Employee are parties to a contract of employment (“Employment Contract”) to which this Release has been attached and incorporated by reference. Employee’s employment with Employer has been terminated and, pursuant to the terms of the Employment Contract, Employee must execute this Release in order to receive the severance set forth in the Employment Contract.

     2. In consideration for the promises and covenants set forth in the Employment Contract and this Release, including, specifically but without limitation, the general release set forth in paragraph 3 below, Employee will be paid [insert the severance set forth in the appropriate subsection of section 6 of the Employment Contract]. Payments to Employee will be made at such times as are set forth in the Employment Contract.

     3. Employee agrees, on behalf of himself, and his heirs, successors in interest and assigns that, except as specifically provided herein, Employee will not file, or cause to be filed, any charges, lawsuits, or other actions of any kind in any forum against Employer and/or its officers, directors, employees, agents, successors and assigns and does hereby further release and discharge Employer and its officers, directors, employees, agents, successors and assigns from any and all claims, causes of action, rights, demands, and obligations of whatever nature kind or character which you may have, known or unknown, against them (including those seeking equitable relief) alleging, without limitation, breach of contract or any tort, legal actions under title VII of the Civil Rights Act of 1964, as amended, Section 1981 of the Civil Rights Act of 1966, as amended, the Rehabilitation Act of 1973, as amended, the Employee Retirement Income Security Act of 1974, as amended, the Fair Labor Standards Act of 1938, as amended, the Age Discrimination in Employment Act of 1967, as amended, (the “ADEA”) (except to the extent claims under the ADEA arise after the date on which this Release is signed by Employee), the Americans with Disability Act, the Civil Rights Act of 1991, or any State, Federal, or local law concerning age, race, religion, national origin, handicap, or any other form of discrimination, or any other State, Federal, or common law or regulation relating in any way to, Employee’s employment with the Company or Employee’s separation from the Company, including any and all future claims, except claims arising in connection with rights and obligations under this Release or as specifically provided in paragraph 4 or 6 below. Employee further agrees to waive and release any claim for damages occurring at any time after the date of this Release because of any alleged continuing effect of any alleged acts or omissions involving Employee and/or Employer which occurred on or before the date of this Release.

-Page 13-

     4. Notwithstanding anything contained in this Release to the contrary, the general release set forth in paragraph 3 shall not apply to any claims under any equity, option or other Employer incentive plan or award, which shall be governed by the terms and conditions of such plan(s) or award; nor shall it affect any rights or obligations that Employee or Employer may have pursuant to the Indemnification Agreement entered into between Employee and Employer as of April 17, 2009.

     5. This Release shall not in any way be construed as an admission by Employer or Employee that they have acted wrongfully with respect to each other or that one party has any rights whatsoever against the other or the other released parties.

     6. Employee and Employer specifically acknowledge the following:

a.	Employee does not release or waive any right or claim which Employee may have which arises after the date of this Release.
b.	In exchange for this general release, Employee acknowledges that Employee has received separate consideration beyond that which Employee is otherwise entitled to under Employer’s policy or applicable law.
c.	Employee is releasing, among other rights, all claims and rights under the Age Discrimination in Employment Act (“ADEA”) and the Older Workers’ Benefit Protection Act (“OWBPA”), 29 U.S.C. §621, et seq.
d.	Employee has twenty-one (21) days to consider this Release.
e.	Employee has seven (7) days to revoke this Release after acceptance. However, no consideration will be paid until after the revocation of the acceptance period has expired. Additionally, for the revocation to be effective, Employee must give written notice of Employee’s revocation to Employer’s General Counsel.

     7. Should Employee breach any provision of this Release, the Employer’s obligation to continue to pay the consideration set forth herein shall cease and Employer shall have no further obligation to Employee. All other terms and conditions of this Release, including, but not limited to, the general release in paragraph 3 shall remain in full force and effect. Should Employer breach any provision of this Release, the Employee’s obligations hereunder shall cease and Employee shall have no further obligations pursuant to this Release.

     8. Employer and Employee agree that in the event it becomes necessary to enforce any provision of this Release, the prevailing party in such action shall be entitled to recover all their costs and attorneys’ fees, including those associated with appeals.

-Page 14-

     9. This Release shall be binding upon Employer, Employee and upon Employee’s heirs, administrators, representatives, executors, successors and assigns, and shall inure to the benefit of Employer and the other released parties and their successors and assigns.

     10. Employee and Employer acknowledge that this Release and the Employment Contract shall be considered as one document and that, except as set forth herein and therein, including without limitation the provisions of paragraphs 4 and 6 of this Release, any and all prior understandings and agreements between the parties to this Release with respect to the subject matter of this Release and/or the Employment Contract are merged into the Employment Contract and this Release, which fully and completely expresses the entire understanding of the parties with respect to the subject matter hereof and thereof.

     11. Should any provision of this Release be declared or be determined by any Court to be illegal or invalid, the validity of the remaining parts, terms or provisions shall not be affected thereby and said illegal or invalid part, term or provision shall be deemed not to be a part of this Release.

     12. This Release may be executed in one or more counterparts, each of which shall be deemed an original and all of which shall constitute one and the same instrument.

[EMPLOYEE NAME]	WALTER INVESTMENT MANAGEMENT CORP.
	By:

Date: Name Printed:

Title:

Date:

-Page 15-

EX-10.9

Exhibit 10.9

2009 Long-Term Incentive Award Plan of
Walter Investment Management Corp.
Restricted Stock Unit Award Agreement

2009 Long-Term Incentive Award Plan of
Walter Investment Management Corp.
Restricted Stock Unit Award Agreement

You have been selected to receive a grant of Restricted Stock Units (“RSUs”) pursuant to the 2009 Long-Term Incentive Award Plan of Walter Investment Management Corp. (the “Plan”) as specified below:

Participant: Stuart Boyd

Date of Grant: January 4, 2010

Number of RSUs Granted: 8,497

Settlement Date: January 4, 2013

Vesting Schedule: The RSUs shall vest according to the following schedule:

Date on Which RSUs Vest	Number of RSUs Vested	Cumulative Number of RSUs Vested
January 4, 2011	One-Third	One-Third
January 4, 2012	One-Third	Two-Thirds
January 4, 2013	One-Third	100%

THIS AGREEMENT, effective as of the Date of Grant set forth above, represents the grant of RSUs by Walter Investment Management Corp., a Maryland corporation (the “Company”), to the Participant named above, pursuant to the provisions of the Plan.

The Plan provides a complete description of the terms and conditions governing the grant of RSUs. If there is any inconsistency between the terms of this Agreement and the terms of the Plan, the Plan’s terms shall completely supersede and replace the conflicting terms of this Agreement. All capitalized terms shall have the meanings ascribed to them in the Plan, unless specifically set forth otherwise herein. The parties hereto agree as follows:

1. Employment With the Company. Except as may otherwise be provided in Section 5 or 6, the RSUs granted hereunder are granted on the condition that the Participant remains an employee of the Company from the Date of Grant through (and including) the Settlement Date.

This grant of RSUs shall not confer any right to the Participant (or any other Participant) to be granted RSUs or other Awards in the future under the Plan.

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2. Timing of Payout. Payout of all RSUs shall occur as soon as administratively feasible after the earlier of the Settlement Date, the Participant’s death, or a Change in Control unless a Participant irrevocably elects to voluntarily defer the payout of RSUs to a specific date or event as approved by the Compensation Committee and in compliance with 409A.

3. Form of Payout. Vested RSUs will be paid out solely in the form of shares of stock of the Company.

4. Voting Rights and Dividend Equivalents. Until such time as the RSUs are paid out in shares of Company stock, the Participant shall not have voting rights. However, the Company will pay Dividend Equivalents on the RSUs, in the form of cash at such time as dividends are paid on the Company’s outstanding shares of Common Stock.

5. Termination of Employment.

(a)	By Death. In the event the employment of the Participant with the Company is terminated by reason of Death prior to becoming partially or fully vested without restriction in all or a portion of the RSUs, Participant shall become immediately fully vested without restriction in all RSUs granted pursuant to this Agreement.
(b)	By Disability or Retirement. In the event the employment of the Participant with the Company is terminated by reason of Disability or Retirement prior to becoming partially or fully vested without restriction in all or a portion of the RSUs, Participant shall become immediately fully vested without restriction in all RSUs granted pursuant to this Agreement.
	For purposes of this Agreement, (a) Disability shall be defined as a “permanent and total disability” within the meaning of Section 22(e)(3) of the Internal Revenue Code of 1986, as amended and such other disabilities, infirmities, afflictions or conditions as the Committee by rule may include; and (b) Retirement shall mean, Participant’s voluntary termination of employment after such time as either, Participant has reached the age of 60, or the sum of Participant’s age and years of service with the Company (inclusive of years served with any predecessor or successor companies to the Company) exceeds 70; provided that, in either case, Participant provides the Company with at least 6 months written notice of Participant’s intention to retire, or such lesser time as the Company may agree.
(c)	For Cause. In the event the employment of the Participant with the Company is involuntarily terminated for Cause, all vested and unvested RSUs shall be forfeited.
	For purposes of this Agreement, Cause means the Participant’s:

i)

Willful failure to substantially perform the Executive’s duties with the Company (other than any such failure resulting from the Executive’s Disability or Retirement), after a written demand for substantial performance is delivered to the Executive that specifically identifies the manner in which the Company believes that the Executive has not substantially performed such duties, and the Executive has failed to remedy the situation, to the extent possible, within fifteen (15) business days of such written notice from the Company or such longer time as may be reasonably required to remedy the situation, but no longer than forty-five (45) calendar days;

ii)

Conviction of, or plea of guilty or nolo contendere, to any felony which, in the discretion of the Compensation and Human Resources Committee of the Company’s Board of

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	Directors, is materially injurious to the Company or its reputation or which compromises the Executive’s ability to perform the Executive’s job function, or any other crime involving moral turpitude or the personal enrichment of the Executive at the expense of the Company;
iii)	Willful violation of any of the covenants contained in the Participant’s employment agreement (e.g., Noncompete, Nonsolicitation, Confidentiality, etc.), as applicable;
iv)	Act of dishonesty resulting in or intending to result in personal gain at the expense of the Company; or
v)	Engaging in any act that is intended, or may be reasonably expected, to harm the reputation, business prospects, or operations of the Company.

For purposes of this Section 3, no act or omission by the Executive shall be considered “willful” unless it is done or omitted in bad faith or without reasonable belief that the Executive’s action or omission was in the best interests of the Company. Any act or failure to act based upon: (i) authority given pursuant to a resolution duly adopted by the Board; or (ii) advice of counsel for the Company, shall be conclusively presumed to be done or omitted to be done by the Executive in good faith and in the best interests of the Company.

(d)

For Other Reasons. Subject to the Compensation and Human Resource Committee’s (the “Committee”) discretion, if the employment of the Participant shall terminate for any reason other than the reasons set forth in this Section 5(a) through 5(c) herein, the Participant shall forfeit the unvested portion of the RSU Award.

6.	Change in Control. Notwithstanding anything to the contrary in this Agreement, in the event of a Change in Control of the Company and prior to the Participant’s termination of employment, the Participant shall become immediately fully vested without restriction in all RSUs granted pursuant to this Agreement.
7.	Restrictions on Transfer. Unless and until actual shares of stock of the Company are received upon payout, RSUs granted pursuant to this Agreement may not be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated (a “Transfer”), other than by will or by the laws of descent and distribution, except as provided in the Plan.
8.	Recapitalization. In the event of any change in the capitalization of the Company such as a stock split or a corporate transaction such as any merger, consolidation, separation, or otherwise, the number and class of RSUs subject to this Agreement shall be equitably adjusted by the Committee, in its sole discretion, to prevent dilution or enlargement of rights.
9.	Beneficiary Designation. The Participant may, from time to time, name any beneficiary or beneficiaries (who may be named contingently or successively) to whom any benefit under this Agreement is to be paid in case of his or her death before he or she receives any or all of such benefit. Each such designation shall revoke all prior designations by the Participant, shall be in a form prescribed by the Company, and will be effective only when filed by the Participant in writing with the Secretary of the Company during the Participant’s lifetime. In the absence of any such designation, benefits remaining unpaid at the Participant’s death shall be paid to the Participant’s estate.

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10.	Continuation of Employment. This Agreement shall not confer upon the Participant any right to continue employment with the Company or its Subsidiaries, nor shall this Agreement interfere in any way with the Company’s right to terminate the Participant’s employment at any time.
11.	Miscellaneous.

(a)	This Agreement and the rights of the Participant hereunder are subject to all the terms and conditions of the Plan, as the same may be amended from time to time, as well as to such rules and regulations as the Committee may adopt for administration of the Plan. The Committee shall have the right to impose such restrictions on any shares acquired pursuant to this Agreement, as it may deem advisable, including, without limitation, restrictions under applicable federal securities laws, under the requirements of any stock exchange or market upon which such shares are then listed and/or traded, and under any blue sky or state securities laws applicable to such shares. It is expressly understood that the Committee is authorized to administer, construe, and make all determinations necessary or appropriate to the administration of the Plan and this Agreement, all of which shall be binding upon the Participant.
(b)	The Committee may terminate, amend, or modify the Plan; provided, however, that no such termination, amendment, or modification of the Plan may in any material way adversely affect the Participant’s rights under this Agreement, without the written consent of the Participant.
(c)	The Participant may elect, subject to any procedural rules adopted by the Committee, to satisfy the withholding requirement, in whole or in part, by having the Company withhold and sell shares having an aggregate Fair Market Value on the date the tax is to be determined, equal to the amount required to be withheld.
	The Company shall have the power and the right to deduct or withhold from the Participant’s compensation, or require the Participant to remit to the Company, an amount sufficient to satisfy the minimum statutory required withholding for federal, state, and local taxes (including the Participant’s FICA obligation), domestic or foreign, required by law to be withheld with respect to any payout to the Participant under this Agreement.
(d)	The Participant agrees to take all steps necessary to comply with all applicable provisions of federal and state securities laws in exercising his or her rights under this Agreement.
(e)	This Agreement shall be subject to all applicable laws, rules, and regulations, and to such approvals by any governmental agencies or national securities exchanges as may be required.
(f)	All obligations of the Company under the Plan and this Agreement, with respect to the RSUs, shall be binding on any successor to the Company, whether the existence of such successor is the result of a direct or indirect purchase, merger, consolidation, or otherwise, of all or substantially all of the business and/or assets of the Company.
(g)	To the extent not preempted by federal law, this Agreement shall be governed by, and construed in accordance with, the laws of the state of Maryland.
(h)	To the extent any provision of this Agreement is held by a court of competent jurisdiction to be unenforceable or invalid for any reason, the remaining provisions of this Agreement shall not be affected by such holding and shall continue in full force in accordance with their terms.

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(i) Notice hereunder shall be given to the Company at its principal place of business, and shall be given to the Participant at the address set forth below, or in either case at such addresses as one party may subsequently furnish to the other party in writing.

          IN WITNESS WHEREOF, the parties have caused this Agreement to be executed as of the Date of Grant.

Walter Investment Management Corp.
 

By:  

ATTEST:
	Participant
	Participant’s name and address:

5

EX-10.10

Exhibit 10.10

2009 Long-Term Incentive Award Plan of
Walter Investment Management Corp.
Restricted Stock Unit Award Agreement

2009 Long-Term Incentive Award Plan of
Walter Investment Management Corp.
Restricted Stock Unit Award Agreement

You have been selected to receive a grant of Restricted Stock Units (“RSUs”) pursuant to the 2009 Long-Term Incentive Award Plan of Walter Investment Management Corp. (the “Plan”) as specified below:

Participant: Del Pulido

Date of Grant: January 4, 2010

Number of RSUs Granted: 3,965

Settlement Date: January 4, 2013

Vesting Schedule: The RSUs shall vest according to the following schedule:

Date on Which RSUs Vest	Number of RSUs Vested	Cumulative Number of RSUs Vested
| |
January 4, 2011	One-Third	One-Third
January 4, 2012	One-Third	Two-Thirds
January 4, 2013	One-Third		100	%

THIS AGREEMENT, effective as of the Date of Grant set forth above, represents the grant of RSUs by Walter Investment Management Corp., a Maryland corporation (the “Company”), to the Participant named above, pursuant to the provisions of the Plan.

The Plan provides a complete description of the terms and conditions governing the grant of RSUs. If there is any inconsistency between the terms of this Agreement and the terms of the Plan, the Plan’s terms shall completely supersede and replace the conflicting terms of this Agreement. All capitalized terms shall have the meanings ascribed to them in the Plan, unless specifically set forth otherwise herein. The parties hereto agree as follows:

1.	Employment With the Company. Except as may otherwise be provided in Section 5 or 6, the RSUs granted hereunder are granted on the condition that the Participant remains an employee of the Company from the Date of Grant through (and including) the Settlement Date.
	This grant of RSUs shall not confer any right to the Participant (or any other Participant) to be granted RSUs or other Awards in the future under the Plan.

1

2.	Timing of Payout. Payout of all RSUs shall occur as soon as administratively feasible after the earlier of the Settlement Date, the Participant’s death, or a Change in Control unless a Participant irrevocably elects to voluntarily defer the payout of RSUs to a specific date or event as approved by the Compensation Committee and in compliance with 409A.
3.	Form of Payout. Vested RSUs will be paid out solely in the form of shares of stock of the Company.
4.	Voting Rights and Dividend Equivalents. Until such time as the RSUs are paid out in shares of Company stock, the Participant shall not have voting rights. However, the Company will pay Dividend Equivalents on the RSUs, in the form of cash at such time as dividends are paid on the Company’s outstanding shares of Common Stock.
5.	Termination of Employment.

(a)	By Death. In the event the employment of the Participant with the Company is terminated by reason of Death prior to becoming partially or fully vested without restriction in all or a portion of the RSUs, Participant shall become immediately fully vested without restriction in all RSUs granted pursuant to this Agreement.
(b)	By Disability. In the event the employment of the Participant with the Company is terminated by reason of Disability prior to becoming partially or fully vested without restriction in all or a portion of the RSUs, Participant shall become immediately fully vested without restriction in all RSUs granted pursuant to this Agreement.
	For purposes of this Agreement, disability shall be defined as a “permanent and total disability” within the meaning of Section 22(e)(3) of the Internal Revenue Code of 1986, as amended and such other disabilities, infirmities, afflictions or conditions as the Committee by rule may include.
(c)	For Cause. In the event the employment of the Participant with the Company is involuntarily terminated for Cause, all vested and unvested RSUs shall be forfeited.

For purposes of this Agreement, Cause means the Participant’s:

i)

Willful failure to substantially perform the Executive’s duties with the Company (other than any such failure resulting from the Executive’s Disability), after a written demand for substantial performance is delivered to the Executive that specifically identifies the manner in which the Company believes that the Executive has not substantially performed such duties, and the Executive has failed to remedy the situation, to the extent possible, within fifteen (15) business days of such written notice from the Company or such longer time as may be reasonably required to remedy the situation, but no longer than forty-five (45) calendar days;

ii)

Conviction of, or plea of guilty or nolo contendere, to any felony which, in the discretion of the Compensation and Human Resources Committee of the Company’s Board of Directors, is materially injurious to the Company or its reputation or which compromises the Executive’s ability to perform the Executive’s job function, or any other crime involving moral turpitude or the personal enrichment of the Executive at the expense of the Company;

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iii)	Willful violation of any of the covenants contained in the Participant’s employment agreement (e.g., Noncompete, Nonsolicitation, Confidentiality, etc.), as applicable;
iv)	Act of dishonesty resulting in or intending to result in personal gain at the expense of the Company; or
v)	Engaging in any act that is intended, or may be reasonably expected, to harm the reputation, business prospects, or operations of the Company.

For purposes of this Section 3, no act or omission by the Executive shall be considered “willful” unless it is done or omitted in bad faith or without reasonable belief that the Executive’s action or omission was in the best interests of the Company. Any act or failure to act based upon: (i) authority given pursuant to a resolution duly adopted by the Board; or (ii) advice of counsel for the Company, shall be conclusively presumed to be done or omitted to be done by the Executive in good faith and in the best interests of the Company.

(d) For Other Reasons. Subject to the Compensation and Human Resource Committee’s (the “Committee”) discretion, if the employment of the Participant shall terminate for any reason other than the reasons set forth in this Section 5(a) through 5(c) herein, the Participant shall forfeit the unvested portion of the RSU Award.

6.	Change in Control. Notwithstanding anything to the contrary in this Agreement, in the event of a Change in Control of the Company and prior to the Participant’s termination of employment, the Participant shall become immediately fully vested without restriction in all RSUs granted pursuant to this Agreement.
7.	Restrictions on Transfer. Unless and until actual shares of stock of the Company are received upon payout, RSUs granted pursuant to this Agreement may not be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated (a “Transfer”), other than by will or by the laws of descent and distribution, except as provided in the Plan.
8.	Recapitalization. In the event of any change in the capitalization of the Company such as a stock split or a corporate transaction such as any merger, consolidation, separation, or otherwise, the number and class of RSUs subject to this Agreement shall be equitably adjusted by the Committee, in its sole discretion, to prevent dilution or enlargement of rights.
9.	Beneficiary Designation. The Participant may, from time to time, name any beneficiary or beneficiaries (who may be named contingently or successively) to whom any benefit under this Agreement is to be paid in case of his or her death before he or she receives any or all of such benefit. Each such designation shall revoke all prior designations by the Participant, shall be in a form prescribed by the Company, and will be effective only when filed by the Participant in writing with the Secretary of the Company during the Participant’s lifetime. In the absence of any such designation, benefits remaining unpaid at the Participant’s death shall be paid to the Participant’s estate.
10.	Continuation of Employment. This Agreement shall not confer upon the Participant any right to continue employment with the Company or its Subsidiaries, nor shall this Agreement interfere in any way with the Company’s right to terminate the Participant’s employment at any time.

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11. Miscellaneous.

(a)	This Agreement and the rights of the Participant hereunder are subject to all the terms and conditions of the Plan, as the same may be amended from time to time, as well as to such rules and regulations as the Committee may adopt for administration of the Plan. The Committee shall have the right to impose such restrictions on any shares acquired pursuant to this Agreement, as it may deem advisable, including, without limitation, restrictions under applicable federal securities laws, under the requirements of any stock exchange or market upon which such shares are then listed and/or traded, and under any blue sky or state securities laws applicable to such shares. It is expressly understood that the Committee is authorized to administer, construe, and make all determinations necessary or appropriate to the administration of the Plan and this Agreement, all of which shall be binding upon the Participant.
(b)	The Committee may terminate, amend, or modify the Plan; provided, however, that no such termination, amendment, or modification of the Plan may in any material way adversely affect the Participant’s rights under this Agreement, without the written consent of the Participant.
(c)	The Participant may elect, subject to any procedural rules adopted by the Committee, to satisfy the withholding requirement, in whole or in part, by having the Company withhold and sell shares having an aggregate Fair Market Value on the date the tax is to be determined, equal to the amount required to be withheld.
	The Company shall have the power and the right to deduct or withhold from the Participant’s compensation, or require the Participant to remit to the Company, an amount sufficient to satisfy the minimum statutory required withholding for federal, state, and local taxes (including the Participant’s FICA obligation), domestic or foreign, required by law to be withheld with respect to any payout to the Participant under this Agreement.
(d)	The Participant agrees to take all steps necessary to comply with all applicable provisions of federal and state securities laws in exercising his or her rights under this Agreement.
(e)	This Agreement shall be subject to all applicable laws, rules, and regulations, and to such approvals by any governmental agencies or national securities exchanges as may be required.
(f)	All obligations of the Company under the Plan and this Agreement, with respect to the RSUs, shall be binding on any successor to the Company, whether the existence of such successor is the result of a direct or indirect purchase, merger, consolidation, or otherwise, of all or substantially all of the business and/or assets of the Company.
(g)	To the extent not preempted by federal law, this Agreement shall be governed by, and construed in accordance with, the laws of the state of Maryland.
(h)	To the extent any provision of this Agreement is held by a court of competent jurisdiction to be unenforceable or invalid for any reason, the remaining provisions of this Agreement shall not be affected by such holding and shall continue in full force in accordance with their terms.
(i)	Notice hereunder shall be given to the Company at its principal place of business, and shall be given to the Participant at the address set forth below, or in either case at such addresses as one party may subsequently furnish to the other party in writing.

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     IN WITNESS WHEREOF, the parties have caused this Agreement to be executed as of the Date of Grant.

Walter Investment Management Corp.
 

By:  

ATTEST:
	Participant
	Participant’s name and address:

5

EX-10.11

Exhibit 10.11

2009 Long-Term Incentive Award Plan of
Walter Investment Management Corp.
Nonqualified Option Award Agreement

2009 Long-Term Incentive Award Plan of
Walter Investment Management Corp.
Nonqualified Option Award Agreement

You have been selected to receive a grant of nonqualified Options pursuant to the 2009 Long-Term Incentive Award Plan of Walter Investment Management Corp.(the “Plan”), as specified below:

     Participant: Stuart Boyd

     Date of Grant: January 4, 2010

     Number of Shares Covered by This Option: 10,027

     Option Price: $14.39

     Date of Expiration: January 4, 2020

     Vesting of Options: In Accordance With the Following Schedule:

	Portion of
Vesting Date	Options Vesting
First anniversary of Date of Grant	One-Third
Second anniversary of Date of Grant	One-Third
Third anniversary of Date of Grant	One-Third

THIS AGREEMENT, effective as of the Date of Grant set forth above, represents the grant of a nonqualified Option by Walter Investment Management Corp., a Maryland corporation (the “Company”), to the Participant named above, pursuant to the provisions of the Plan.

The Plan provides a complete description of the terms and conditions governing this Option. If there is any inconsistency between the terms of this Agreement and the terms of the Plan, the Plan’s terms shall completely supersede and replace the conflicting terms of this Agreement. All capitalized terms shall have the meanings ascribed to them in the Plan, unless specifically set forth otherwise herein. The parties hereto agree as follows:

1

1.	Grant of Options. The Company hereby grants to the Participant an Option to purchase the number of Shares set forth above, at the stated Option Price, which is one hundred percent (100%) of the Fair Market Value of a Share on the Date of Grant, in the manner and subject to the terms and conditions of the Plan and this Agreement.
2.	Exercise of Option. Except as hereinafter provided, the Participant may exercise this Option at any time after the Option vests (according to the vesting schedule set forth above), provided that no exercise may occur subsequent to the close of business on the Date of Expiration (as defined on page 1 of this Agreement). This Option may be exercised in whole or in part, but not for less than one hundred (100) Shares at any one time, unless fewer than one hundred (100) Shares then remain subject to the Option, and the Option is then being exercised as to all such remaining Shares.
3.	Termination of Service.

(a)	By Death. In the event the employment of the Participant with the Company is terminated by reason of death, the portion of the Option not yet vested as of the date of death shall become immediately vested and exercisable. The entire Option shall remain exercisable at any time prior to its expiration date, or for twelve (12) months after the date of death, whichever period is shorter, by such person or persons as shall have been named as the Participant’s beneficiary, or by such persons that have acquired the Participant’s rights under the Options by will or by the laws of descent and distribution.
(b)	By Disability or Retirement. In the event the employment of the Participant with the Company is terminated by reason of Disability or Retirement, the portion of the Option not yet vested as of the date of termination shall become immediately vested and exercisable. The entire Option shall remain exercisable at any time prior to its expiration date, or for twelve (12) months after the date of termination, whichever period is shorter.
	For purposes of this Agreement, (a) Disability shall be defined as a “permanent and total disability” within the meaning of Section 22(e)(3) of the Internal Revenue Code of 1986, as amended and such other disabilities, infirmities, afflictions or conditions as the Committee by rule may include; and (b) Retirement shall mean, Participant’s voluntary termination of employment after such time as either, Participant has reached the age of 60, or the sum of Participant’s age and years of service with the Company (inclusive of years served with any predecessor or successor companies to the Company) exceeds 70; provided that, in either case, Participant provides the Company with at least 6 months written notice of Participant’s intention to retire, or such lesser time as the Company may agree.
(c)	For Cause. In the event the employment of the Participant with the Company is involuntarily terminated for Cause, all vested and unvested options shall be forfeited.
	For purposes of this Agreement, Cause means the Participant’s:

i) Willful failure to substantially perform the Executive’s duties with the Company (other than any such failure resulting from the Executive’s Disability or Retirement), after a written demand for substantial performance is delivered to the Executive that

2

	specifically identifies the manner in which the Company believes that the Executive has not substantially performed such duties, and the Executive has failed to remedy the situation, to the extent possible, within fifteen (15) business days of such written notice from the Company, or such longer time as may be reasonably required to remedy the situation, but no longer than forty-five (45) calendar days;
ii)	Conviction of, or plea of guilty or nolo contendere, to any felony which, in the discretion of the Compensation and Human Resources Committee of the Company’s Board of Directors, is materially injurious to the Company or its reputation or which compromises the Executive’s ability to perform the Executive’s job function, or any other crime involving moral turpitude or the personal enrichment of the Executive at the expense of the Company;
iii)	Willful violation of any of the covenants contained in the Participant’s employment agreement (e.g., Noncompete, Nonsolicitation, Confidentiality, etc.), as applicable;
iv)	Act of dishonesty resulting in or intending to result in personal gain at the expense of the Company; or
v)	Engaging in any act that is intended, or may be reasonably expected, to harm the reputation, business prospects, or operations of the Company.

For purposes of this Section 3, no act or omission by the Executive shall be considered “willful” unless it is done or omitted in bad faith or without reasonable belief that the Executive’s action or omission was in the best interests of the Company. Any act or failure to act based upon: (i) authority given pursuant to a resolution duly adopted by the Board; or (ii) advice of counsel for the Company, shall be conclusively presumed to be done or omitted to be done by the Executive in good faith and in the best interests of the Company.

(d)

For Other Reasons. Subject to the Compensation and Human Resource Committee’s (the “Committee”) discretion, if the employment of the Participant shall terminate for any reason other than the reasons set forth in this Section 3(a) through 3(c) herein, the portion of the Option not yet vested as of the date of termination shall be forfeited. The portion of the Option vested as of the effective date of termination shall remain exercisable at any time prior to its expiration date, or for twelve (12) months after the effective date of termination, whichever period is shorter.

4.

Change in Control. Notwithstanding anything to the contrary in this Agreement, in the event of a Change in Control of the Company and prior to the Participant’s termination of employment, the Participant shall become immediately fully vested without restriction in all Options granted pursuant to this Agreement.

5.

Restrictions on Transfer. Unless otherwise determined by the Committee in accordance with the Plan, this Option may not be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated, other than by will or by the laws of descent and distribution. Further, this Option shall be exercisable during the Participant’s lifetime only by the Participant or the Participant’s legal representative.

3

6.	Recapitalization. In the event of any change in the capitalization of the Company such as a stock split or a corporate transaction such as any merger, consolidation, separation, or otherwise, the number and class of Shares subject to this Option, as well as the Option Price, shall be equitably adjusted by the Committee to prevent dilution or enlargement of rights.
7.	Procedure for Exercise of Option. This Option may be exercised by delivery of written notice to the Company at its executive offices, addressed to the attention of its Secretary. Such notice: (a) shall be signed by the Participant or his or her legal representative; (b) shall specify the number of full Shares then elected to be purchased with respect to the Option; (c) unless a Registration Statement under the Securities Act of 1933 is in effect with respect to the Shares to be purchased, shall contain a representation of the Participant that the Shares are being acquired by him or her for investment and with no present intention of selling or transferring them, and that he or she will not sell or otherwise transfer the Shares except in compliance with all applicable securities laws and requirements of any stock exchange upon which the Shares may then be listed; and (d) shall be accompanied by payment in full of the Option Price of the Shares to be purchased.
	The Option Price upon exercise of this Option shall be payable to the Company in full as provided for in the Plan.
	As promptly as practicable after receipt of notice and payment upon exercise, the Company shall cause to be issued and delivered to the Participant or his or her legal representative, as the case may be, certificates for the shares so purchased, which may, if appropriate, be endorsed with appropriate restrictive legends. The share certificates shall be issued in the Participant’s name (or, at the discretion of the Participant, jointly in the names of the Participant and the Participant’s spouse). The Company shall maintain a record of all information pertaining to the participant’s rights under this Agreement, including the number of shares for which his or her Option is exercisable. If the Option shall have been exercised in full, this Agreement shall be returned to the Company and canceled.
8.	Beneficiary Designation. The Participant may, from time to time, name any beneficiary or beneficiaries (who may be named contingently or successively) to whom any benefit under this Agreement is to be paid in case of his or her death before he or she receives any or all of such benefit. Each such designation shall revoke all prior designations by the Participant, shall be in a form prescribed by the Company, and will be effective only when filed by the Participant in writing with the Secretary of the Company during the Participant’s lifetime. In the absence of any such designation, benefits remaining unpaid at the Participant’s death shall be paid to the Participant’s estate.
9.	Rights as a Stockholder. The Participant shall have no rights as a stockholder of the Company with respect to the Shares subject to this Agreement until such time as the purchase price has been paid, and the Shares have been issued and delivered to him or her.
10.	Continuation of Employment. This Agreement shall not confer upon the Participant any right to continue employment with the Company, nor shall this Agreement interfere in any way with the Company’s right to terminate the Participant’s service at any time.

4

11. Miscellaneous.

(a)	This Agreement and the rights of the Participant hereunder are subject to all the terms and conditions of the Plan, as the same may be amended from time to time, as well as to such rules and regulations as the Committee may adopt for administration of the Plan. The Committee shall have the right to impose such restrictions on any Shares acquired pursuant to the exercise of this Option, as it may deem advisable, including, without limitation, restrictions under applicable federal securities laws, under the requirements of any stock exchange or market upon which such Shares are then listed and/or traded, and under any blue sky or state securities laws applicable to such Shares. It is expressly understood that the Committee is authorized to administer, construe, and make all determinations necessary or appropriate to the administration of the Plan and this Agreement, all of which shall be binding upon the Participant.
(b)	The Committee may terminate, amend, or modify the Plan; provided, however, that no such termination, amendment, or modification of the Plan may in any material way adversely affect the Participant’s rights under this Agreement, without the written consent of the Participant.
(c)	The Participant acknowledges and agrees that the Company shall have the power and the right to deduct or withhold, an amount sufficient to satisfy federal, state, and local taxes (including the Participant’s FICA obligation), domestic or foreign, required by law to be withheld with respect to any exercise of the Participant’s rights under this Agreement should Participant fail to make timely payment of all taxes due.
	The Participant may elect, subject to any procedural rules adopted by the Committee, to satisfy the withholding requirement, in whole or in part, by having the Company withhold Shares having an aggregate Fair Market Value on the date the tax is to be determined, equal to the minimum amount required to be withheld.
(d)	The Participant agrees to take all steps necessary to comply with all applicable provisions of federal and state securities laws in exercising his or her rights under this Agreement.
(e)	This Agreement shall be subject to all applicable laws, rules, and regulations, and to such approvals by any governmental agencies or national securities exchanges as may be required.
(f)	All obligations of the Company under the Plan and this Agreement, with respect to this Option, shall be binding on any successor to the Company, whether the existence of such successor is the result of a direct or indirect purchase, merger, consolidation, or otherwise, of all or substantially all of the business and/or assets of the Company.
(g)	To the extent any provision of this Agreement is held by a court of competent jurisdiction to be unenforceable or invalid for any reason, the remaining provisions of this Agreement shall not be affected by such holding and shall continue in full force in accordance with their terms.

5

(h)	To the extent not preempted by federal law, this Agreement shall be governed by, and construed in accordance with, the laws of the state of Maryland.
(i)	Notice hereunder shall be given to the Company at its principal place of business, and shall be given to the Participant at the address set forth below, or in either case at such addresses as one party may subsequently furnish to the other party in writing.
(j)	This Option is not intended to qualify as an “incentive stock option” under Section 422 of the Code.

     IN WITNESS WHEREOF, the parties have caused this Agreement to be executed as of the Date of Grant.

Walter Investment Management Corp.
 

By:  

ATTEST:
	Participant
	Participant’s name and address:

6

EX-10.12

Exhibit 10.12

2009 Long-Term Incentive Award Plan of
Walter Investment Management Corp.
Nonqualified Option Award Agreement

2009 Long-Term Incentive Award Plan of
Walter Investment Management Corp.
Nonqualified Option Award Agreement

You have been selected to receive a grant of nonqualified Options pursuant to the 2009 Long-Term Incentive Award Plan of Walter Investment Management Corp. (the “Plan”), as specified below:

     Participant: Del Pulido

     Date of Grant: January 4, 2010

     Number of Shares Covered by This Option: 4,679

     Option Price: $14.39

     Date of Expiration: January 4, 2020

     Vesting of Options: In Accordance With the Following Schedule:

	Portion of
Vesting Date	Options Vesting
|
First anniversary of Date of Grant	One-Third
Second anniversary of Date of Grant	One-Third
Third anniversary of Date of Grant	One-Third

THIS AGREEMENT, effective as of the Date of Grant set forth above, represents the grant of a nonqualified Option by Walter Investment Management Corp., a Maryland corporation (the “Company”), to the Participant named above, pursuant to the provisions of the Plan.

The Plan provides a complete description of the terms and conditions governing this Option. If there is any inconsistency between the terms of this Agreement and the terms of the Plan, the Plan’s terms shall completely supersede and replace the conflicting terms of this Agreement. All capitalized terms shall have the meanings ascribed to them in the Plan, unless specifically set forth otherwise herein. The parties hereto agree as follows:

1

1.	Grant of Options. The Company hereby grants to the Participant an Option to purchase the number of Shares set forth above, at the stated Option Price, which is one hundred percent (100%) of the Fair Market Value of a Share on the Date of Grant, in the manner and subject to the terms and conditions of the Plan and this Agreement.
2.	Exercise of Option. Except as hereinafter provided, the Participant may exercise this Option at any time after the Option vests (according to the vesting schedule set forth above), provided that no exercise may occur subsequent to the close of business on the Date of Expiration (as defined on page 1 of this Agreement). This Option may be exercised in whole or in part, but not for less than one hundred (100) Shares at any one time, unless fewer than one hundred (100) Shares then remain subject to the Option, and the Option is then being exercised as to all such remaining Shares.
3.	Termination of Service.

(a)	By Death. In the event the employment of the Participant with the Company is terminated by reason of death, the portion of the Option not yet vested as of the date of death shall become immediately vested and exercisable. The entire Option shall remain exercisable at any time prior to its expiration date, or for twelve (12) months after the date of death, whichever period is shorter, by such person or persons as shall have been named as the Participant’s beneficiary, or by such persons that have acquired the Participant’s rights under the Options by will or by the laws of descent and distribution.
(b)	By Disability. In the event the employment of the Participant with the Company is terminated by reason of Disability, the portion of the Option not yet vested as of the date of termination shall become immediately vested and exercisable. The entire Option shall remain exercisable at any time prior to its expiration date, or for twelve (12) months after the date of termination, whichever period is shorter.
	For purposes of this Agreement, disability shall be defined as a “permanent and total disability” within the meaning of Section 22(e)(3) of the Internal Revenue Code of 1986, as amended and such other disabilities, infirmities, afflictions or conditions as the Committee by rule may include.
(c)	For Cause. In the event the employment of the Participant with the Company is involuntarily terminated for Cause, all vested and unvested options shall be forfeited.
	For purposes of this Agreement, Cause means the Participant’s:

i) Willful failure to substantially perform the Executive’s duties with the Company (other than any such failure resulting from the Executive’s Disability), after a written demand for substantial performance is delivered to the Executive that specifically identifies the manner in which the Company believes that the Executive has not substantially performed such duties, and the Executive has failed to remedy the situation, to the extent possible, within fifteen (15) business days of such written notice from the Company, or such longer time as may be reasonably required to remedy the situation, but no longer than forty-five (45) calendar days;

2

ii)	Conviction of, or plea of guilty or nolo contendere, to any felony which, in the discretion of the Compensation and Human Resources Committee of the Company’s Board of Directors, is materially injurious to the Company or its reputation or which compromises the Executive’s ability to perform the Executive’s job function, or any other crime involving moral turpitude or the personal enrichment of the Executive at the expense of the Company;
iii)	Willful violation of any of the covenants contained in the Participant’s employment agreement (e.g., Noncompete, Nonsolicitation, Confidentiality, etc.), as applicable;
iv)	Act of dishonesty resulting in or intending to result in personal gain at the expense of the Company; or
v)	Engaging in any act that is intended, or may be reasonably expected, to harm the reputation, business prospects, or operations of the Company.

For purposes of this Section 3, no act or omission by the Executive shall be considered “willful” unless it is done or omitted in bad faith or without reasonable belief that the Executive’s action or omission was in the best interests of the Company. Any act or failure to act based upon: (i) authority given pursuant to a resolution duly adopted by the Board; or (ii) advice of counsel for the Company, shall be conclusively presumed to be done or omitted to be done by the Executive in good faith and in the best interests of the Company.

(d)

For Other Reasons. Subject to the Compensation and Human Resource Committee’s (the “Committee”) discretion, if the employment of the Participant shall terminate for any reason other than the reasons set forth in this Section 3(a) through 3(c) herein, the portion of the Option not yet vested as of the date of termination shall be forfeited. The portion of the Option vested as of the effective date of termination shall remain exercisable at any time prior to its expiration date, or for twelve (12) months after the effective date of termination, whichever period is shorter.

4.	Change in Control. Notwithstanding anything to the contrary in this Agreement, in the event of a Change in Control of the Company and prior to the Participant’s termination of employment, the Participant shall become immediately fully vested without restriction in all Options granted pursuant to this Agreement.
5.	Restrictions on Transfer. Unless otherwise determined by the Committee in accordance with the Plan, this Option may not be sold, transferred, pledged, assigned, or otherwise alienated or hypothecated, other than by will or by the laws of descent and distribution. Further, this Option shall be exercisable during the Participant’s lifetime only by the Participant or the Participant’s legal representative.
6.	Recapitalization. In the event of any change in the capitalization of the Company such as a stock split or a corporate transaction such as any merger, consolidation, separation, or otherwise, the

3

number and class of Shares subject to this Option, as well as the Option Price, shall be equitably adjusted by the Committee to prevent dilution or enlargement of rights.

7.	Procedure for Exercise of Option. This Option may be exercised by delivery of written notice to the Company at its executive offices, addressed to the attention of its Secretary. Such notice: (a) shall be signed by the Participant or his or her legal representative; (b) shall specify the number of full Shares then elected to be purchased with respect to the Option; (c) unless a Registration Statement under the Securities Act of 1933 is in effect with respect to the Shares to be purchased, shall contain a representation of the Participant that the Shares are being acquired by him or her for investment and with no present intention of selling or transferring them, and that he or she will not sell or otherwise transfer the Shares except in compliance with all applicable securities laws and requirements of any stock exchange upon which the Shares may then be listed; and (d) shall be accompanied by payment in full of the Option Price of the Shares to be purchased.
	The Option Price upon exercise of this Option shall be payable to the Company in full as provided for in the Plan.
	As promptly as practicable after receipt of notice and payment upon exercise, the Company shall cause to be issued and delivered to the Participant or his or her legal representative, as the case may be, certificates for the shares so purchased, which may, if appropriate, be endorsed with appropriate restrictive legends. The share certificates shall be issued in the Participant’s name (or, at the discretion of the Participant, jointly in the names of the Participant and the Participant’s spouse). The Company shall maintain a record of all information pertaining to the participant’s rights under this Agreement, including the number of shares for which his or her Option is exercisable. If the Option shall have been exercised in full, this Agreement shall be returned to the Company and canceled.
8.	Beneficiary Designation. The Participant may, from time to time, name any beneficiary or beneficiaries (who may be named contingently or successively) to whom any benefit under this Agreement is to be paid in case of his or her death before he or she receives any or all of such benefit. Each such designation shall revoke all prior designations by the Participant, shall be in a form prescribed by the Company, and will be effective only when filed by the Participant in writing with the Secretary of the Company during the Participant’s lifetime. In the absence of any such designation, benefits remaining unpaid at the Participant’s death shall be paid to the Participant’s estate.
9.	Rights as a Stockholder. The Participant shall have no rights as a stockholder of the Company with respect to the Shares subject to this Agreement until such time as the purchase price has been paid, and the Shares have been issued and delivered to him or her.
10.	Continuation of Employment. This Agreement shall not confer upon the Participant any right to continue employment with the Company, nor shall this Agreement interfere in any way with the Company’s right to terminate the Participant’s service at any time.

4

11. Miscellaneous.

(a)	This Agreement and the rights of the Participant hereunder are subject to all the terms and conditions of the Plan, as the same may be amended from time to time, as well as to such rules and regulations as the Committee may adopt for administration of the Plan. The Committee shall have the right to impose such restrictions on any Shares acquired pursuant to the exercise of this Option, as it may deem advisable, including, without limitation, restrictions under applicable federal securities laws, under the requirements of any stock exchange or market upon which such Shares are then listed and/or traded, and under any blue sky or state securities laws applicable to such Shares. It is expressly understood that the Committee is authorized to administer, construe, and make all determinations necessary or appropriate to the administration of the Plan and this Agreement, all of which shall be binding upon the Participant.
(b)	The Committee may terminate, amend, or modify the Plan; provided, however, that no such termination, amendment, or modification of the Plan may in any material way adversely affect the Participant’s rights under this Agreement, without the written consent of the Participant.
(c)	The Participant acknowledges and agrees that the Company shall have the power and the right to deduct or withhold, an amount sufficient to satisfy federal, state, and local taxes (including the Participant’s FICA obligation), domestic or foreign, required by law to be withheld with respect to any exercise of the Participant’s rights under this Agreement should Participant fail to make timely payment of all taxes due.
	The Participant may elect, subject to any procedural rules adopted by the Committee, to satisfy the withholding requirement, in whole or in part, by having the Company withhold Shares having an aggregate Fair Market Value on the date the tax is to be determined, equal to the minimum amount required to be withheld.
(d)	The Participant agrees to take all steps necessary to comply with all applicable provisions of federal and state securities laws in exercising his or her rights under this Agreement.
(e)	This Agreement shall be subject to all applicable laws, rules, and regulations, and to such approvals by any governmental agencies or national securities exchanges as may be required.
(f)	All obligations of the Company under the Plan and this Agreement, with respect to this Option, shall be binding on any successor to the Company, whether the existence of such successor is the result of a direct or indirect purchase, merger, consolidation, or otherwise, of all or substantially all of the business and/or assets of the Company.
(g)	To the extent any provision of this Agreement is held by a court of competent jurisdiction to be unenforceable or invalid for any reason, the remaining provisions of this Agreement shall not be affected by such holding and shall continue in full force in accordance with their terms.

5

(h)	To the extent not preempted by federal law, this Agreement shall be governed by, and construed in accordance with, the laws of the state of Maryland.
(i)	Notice hereunder shall be given to the Company at its principal place of business, and shall be given to the Participant at the address set forth below, or in either case at such addresses as one party may subsequently furnish to the other party in writing.
(j)	This Option is not intended to qualify as an “incentive stock option” under Section 422 of the Code.

     IN WITNESS WHEREOF, the parties have caused this Agreement to be executed as of the Date of Grant.

Walter Investment Management Corp.
 

By:  

ATTEST:

Participant

Participant’s name and address:

6

EX-31.1

EXHIBIT 31.1

CERTIFICATION BY MARK J. O’BRIEN
PURSUANT TO SECURITIES EXCHANGE ACT RULE 13A-14(a),
AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Mark J. O’Brien, certify that:

     1. I have reviewed this Quarterly Report on Form 10-Q of Walter Investment Management Corp. (the “Registrant”) for the period ended March 31, 2010 (the “Report”);

     2. Based on my knowledge, this Report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this Report;

     3. Based on my knowledge, the financial statements, and other financial information included in this Report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this Report;

     4. The Registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e), and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:

          a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this Report is being prepared; and

          b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; and

          c) evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this Report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this Report based on such evaluation; and

          d) disclosed in this Report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Registrant’s control over financial reporting.

     5. The Registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalent functions):

          a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and

          b) any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.

/s/ Mark J. O’Brien  

Mark J. O’Brien 

Chief Executive Officer 

Date: May 5, 2010

EX-31.2

EXHIBIT 31.2

CERTIFICATION BY KIMBERLY A. PEREZ
PURSUANT TO SECURITIES EXCHANGE ACT RULE 13A-14(a),
AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Kimberly A. Perez, certify that:

     1. I have reviewed this Quarterly Report on Form 10-Q of Walter Investment Management Corp. (the “Registrant”) for the period ended March 31, 2010 (the “Report”);

     2. Based on my knowledge, this Report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this Report;

     3. Based on my knowledge, the financial statements, and other financial information included in this Report, fairly present in all material respects the financial condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this Report;

     4. The Registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e), and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the Registrant and have:

          a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this Report is being prepared; and

          b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; and

          c) evaluated the effectiveness of the Registrant’s disclosure controls and procedures and presented in this Report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this Report based on such evaluation; and

          d) disclosed in this Report any change in the Registrant’s internal control over financial reporting that occurred during the Registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Registrant’s control over financial reporting.

     5. The Registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the Registrant’s auditors and the audit committee of the Registrant’s board of directors (or persons performing the equivalent functions):

          a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the Registrant’s ability to record, process, summarize and report financial information; and

          b) any fraud, whether or not material, that involves management or other employees who have a significant role in the Registrant’s internal control over financial reporting.

/s/ Kimberly A. Perez  

Kimberly A. Perez 

Vice President and Chief Financial Officer 

Date: May 5, 2010

EX-32

EXHIBIT 32

WALTER INVESTMENT MANAGEMENT CORP. AND SUBSIDIARIES
CERTIFICATIONS PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO SECTION 906 OF

THE SARBANES-OXLEY ACT OF 2002

Mark J. O’Brien, Chief Executive Officer, and Kimberly A. Perez, Chief Financial Officer, of Walter Investment Management Corp. (the “Company”), certify to each such officer’s knowledge, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350 that:

1.	The Quarterly Report on Form 10-Q of the Company for the quarter ended March 31, 2010 (the “Report”) fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934 (15 U.S.C. 78m), as amended; and
2.	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: May 5, 2010	By:	/s/ Mark J. O’Brien
		Mark J. O’Brien
		Chief Executive Officer
Date: May 5, 2010	By:	/s/ Kimberly A. Perez
		Kimberly A. Perez
		Vice President and Chief Financial Officer