Walter Investment Management Corp. announced that Ditech Financial will exit its distributed retail lending channel starting Jan. 8 due to changes in the market.
"Throughout 2015 we moderated our investment in the distributed retail channel given current and expected market conditions, as well as recent regulatory considerations, and subsequently made the decision to exit the channel,” said Denmar Dixon, Walter Investment's vice chairman, CEO and president.
“This decision will allow us to concentrate on the continued development of the consumer direct channel, and further enhance our focus on the relationships and opportunities available to us in our retention and correspondent lending channels," said Dixon.
The channel generated funded volumes of approximately $400 million of its total funded volumes of approximately $19.6 billion in the nine months ended Sept 30, 2015, according to the company. That's roughly 2% of its total lending in the first three quarters of 2015.
Walter Investment said that the decision is expected to "impact" less than 200 employees.
Ditech also noted that it will continue to close loans currently in the channel's pipeline.
However, the company said that the housing crash did little to impact the brand legacy and unveiled a new plan to redefine the firm.
The new Ditech was formed from the assets of GMACRescap estate, purchased by Walter Investment /Greentree Originations in November 2012.
At the time, Ditech explained that while more lenders are starting to go online, it would still focus on retail lending and growing its brick-and-mortar buildings, since some people still value the extra-high touch of a mortgage lender relationship that knows their local area very well.
However, as Ditech shrinks its distributed retail channel, its consumer direct division has produced promising results.
In May of last year, the lender announced it expanded its consumer direct channel into the Jacksonville, Florida, area, with plans to hire a team of direct-to-consumer home loan specialists and processors over the next two months.
And in March 2015, Ditech said it would open several new retail lending branches in “key” U.S. markets, including new retail branches in Washington, Oregon, Utah, Ohio and Illinois.