Ditech Holding Corp. posted a net loss of $40.5 million in its first full operating quarter since emerging from bankruptcy protection in February.

"Our second-quarter performance did not meet our expectations, and we are continuing to take actions that we believe will help the company return to sustained profitability," Tom Marano, who assumed the CEO and president roles after Ditech exited Chapter 11, said in a press release.

At the end of June, Ditech hired advisors to review its options, including a possible sale of the company.

In the second quarter last year, Walter Investment Management Corp., as the company was then known, lost $94.3 million. Because of accounting adjustments allowed for companies exiting bankruptcy, Ditech earned $466.9 million in the first quarter.

The servicing segment had pretax income of $50.5 million, compared with a loss of $33.9 million one year prior.

Ditech earnings

Revenue increased to $148.1 million, an increase of $30.6 million, primarily due to $70.2 million in favorable fair value changes to its mortgage servicing rights.

However, its portfolio of owned and subserviced MSRs fell to $181.4 billion as of June 30 from $217.9 million on the same day in 2017, with a resulting decline in servicing fee revenue.

Ditech funded $2.6 billion in the quarter, nearly 38% less than the $4.2 billion it did in the second quarter last year. The originations segment had a pretax loss of $8.4 million for the quarter, compared with pretax income of $23.8 million one year prior.

Net gains on sales were $42.4 million, compared with $70.9 million in 2017's second quarter.

The reverse mortgage business had a pretax loss of $29.6 million, compared with a pretax loss of $13.6 million one year prior.

Separately, Impac Mortgage Holdings posted a second-quarter net loss of $97.4 million, compared with net earnings of $6.4 million one year prior.

Impac took a $74.7 billion impairment charge to goodwill related to its CashCall Mortgage acquisition and an additional $13.4 million charge related to intangible assets.

"If actual results continue to deteriorate, it is possible that an assessment of the estimated fair value of CCM will not exceed its carrying value in the future, in which case further impairment of goodwill will be recorded," Impac said in its earnings release.

In addition to the impairment, Impac's performance was affected by a 24-basis-point drop in gain-on-sale margins to 181 bps from 205 bps in 2017's second quarter.

"We are encouraged by the continued resilience provided by our MSR portfolio, and the progress we have made in repositioning the consumer direct business model," recently promoted Chairman and CEO George Mangiaracina said in the press release. "We continue to be enthused about the positive forward momentum we have created across all of our channels with respect to our non-QM business, which will be a key driver for our future success."

Originations fell 42% from last year to $1 billion. Net servicing fees increased 27% to $9.9 million, as the servicing portfolio increased 14% to $16.8 billion.

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