Ditech's 2017 loss included fair value and restructuring charges

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Ditech Holding Corp. lost $426.9 million in 2017, with almost half of that recorded during the fourth quarter, when the company filed for bankruptcy.

This was an improvement over a loss of $833.9 million for 2016. The company filed its 10-K statement and issued a press release with the results on April 16.

The full-year loss included noncash fair value charges of $157.1 million, restructuring costs of $55.7 million and reorganization costs of $37.6 million, partially offset by a $67.7 million gain on the sale of its insurance agency business in February 2017.

Ditech was formerly called Walter Investment Management Corp. until Feb. 12, the day it emerged from a prepackaged Chapter 11 bankruptcy plan filed last November. Walter restated its 2016 and first-quarter 2017 results in August.

Its emergence from Chapter 11 resolved the significant risks and uncertainties that previously raised the substantial doubt about the company's ability to continue as a going concern, its 10-K filing said.

In the fourth quarter, Ditech lost $213 million, compared with net income of $42.1 million. Besides the reorganization costs, the company took a fair value charge of $30.8 million and had restructuring costs of $25.3 million.

Its servicing business had a fourth-quarter pretax loss of $94.1 million, compared with pretax income of $85.5 million one year prior. The segment had revenue of $109.3 million, a decrease of $229.2 million from the year prior. Expenses for this segment totaled $201.8 million.

As of Dec. 31, it serviced 1.7 million loans with an unpaid principal balance of $207.9 billion. Nearly 49% of that is subservicing, mostly related to servicing rights sold to New Residential.

Ditech funded $2.7 billion in the fourth quarter and $15.6 billion for the full year versus $5.3 billion and $20.3 billion for the same periods one year prior. However, $8.3 billion of 2017's volume was refinancings, compared with $7.3 billion of purchase loans.

The origination segment had a $4.2 billion loss for the fourth quarter, a decrease of $25.8 million from the same period in 2016.

There was a $28.8 million fourth-quarter pretax loss from its reverse mortgage business, compared with a pretax loss of $39.6 million in the fourth quarter of 2016.

Ditech also had a $91.3 million pretax loss in what was termed the "other nonreportable segment." This was an increase of $52.8 million and it was related to the costs of the debt restructuring in connection with the bankruptcy filing.

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Earnings Stocks Servicing Subservicing Originations Ditech Mortgage Walter Investment Management