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Mortgage Crisis Still Claiming Victims as Walter Plans Bankruptcy

  • Prepackaged Chapter 11 plan offers debt-to-equity swap
  • Company needs two-thirds of creditors to sign on to deal
Rows of houses stand in Las Vegas.
Photographer: Jacob Kepler/Bloomberg
Updated on

Walter Investment Management Corp. was supposed to prosper by snapping up mortgage cast-offs from big banks at fire-sale prices. Instead, Walter is belatedly joining the list of companies burned by the U.S. housing crisis.

The mortgage servicer and lender faces a deadline Wednesday to get creditors on board with its bankruptcy plan, and needs at least two-thirds of its term-loan and bond holders to agree for its restructuring to take effect. About half had signed up by the end of last week, according to a statement Friday from the Fort Washington, Pennsylvania-based company.