Ditech agrees to sell assets to two stalking horse bidders
Ditech Holding Corp. has entered into purchase agreements with New Residential Investment Corp. and Mortgage Assets Management, in which each would acquire certain assets in the company's Chapter 11 bankruptcy.
New Residential will serve as "stalking horse bidder" in the sale process to purchase substantially all assets of Ditech Financial, the company's forward mortgage servicing and originations business. Mortgage Assets Management has agreed to take hold of Ditech's reverse mortgage business, Reverse Mortgage Solutions.
"This stalking horse agreement represents a positive step forward in Ditech's court-supervised process. New Residential has a high-quality platform as well as the necessary expertise, operations and scale to efficiently manage these assets for the benefit of both New Residential and Ditech stakeholders," Thomas Marano, chairman of the board and CEO of Ditech Holding, said in a press release.
The news comes after Ditech refiled for bankruptcy in February to facilitate a restructuring agreement with lenders holding more than 75% of its term loans, almost a year after emerging from it. The move to refile extinguished more than $800 million of its corporate debt.
"We believe the agreements with New Residential and Mortgage Assets position us to maximize value and create the best path forward for our stakeholders, including homeowners and customers. I would like to thank all of our employees for their continued hard work and dedication. As a result of their efforts, we have continued serving our customers throughout our court-supervised process," Marano said.
Among other assets, New Residential has agreed to buy Ditech Financial's forward Fannie Mae, Ginnie Mae and nonagency mortgage servicing rights. These have an aggregate unpaid principal balance of $63 billion as of March 31, according to a New Residential release. The company also has agreed to maintain certain existing offices and extend offers to a number of employees.
"We are confident that the acquisition of these select assets, operations and employees from Ditech will be complementary to our existing portfolio and business as well as beneficial to our shareholders and the long-term strategy of our company," said Michael Nierenberg, New Residential's chairman, CEO and president. "The acquisition of these origination and servicing operations from Ditech, in addition to those already operated through NewRez and Shellpoint Mortgage Servicing, will further our position as an industry leading originator and servicer."
The proposed agreements are subject to higher or otherwise better offers, with a submission deadline for bids of July 8, Ditech said. A confirmation hearing of the company's reorganization plan and sale approval details is scheduled to commence Aug. 7.