Mortgage

Growing pains at Ditech? Company begins layoffs

Company "reevaluating" operating model; "redesigning" some roles

[Update: The San Antonio Business Journal reported Monday that Ditech is also laying off nearly 80 employees from its office in San Antonio. This article is now updated to reflect that report.]

Ditech Financial relaunched in 2014 with big plans and big goals. At the time, the Walter Investment Management Corp. subsidiary stated that it planned to launch direct consumer lending, retail lending and correspondent lending operations.

Since then, Ditech merged with another of Walter Investment’s well-known subsidiaries and shifted its business model away from its original plan.

Last year, Walter Investment merged Ditech with Green Tree Servicing to combine the company’s mortgage servicing and originations businesses.

Earlier this year, Ditech announced that it planned to exit its distributed retail lending channel in January. When it made the announcement, and shortly thereafter, the company said it planned to focus on its consumer direct and correspondent lending channels.

But earlier this month, Ditech said that it is planning to launch a wholesale lending channel, calling the expansion a “natural progression” for the company.

As it turns out, some of Ditech’s employees will no longer be taking part in the company’s “natural progression,” as sources tell HousingWire that the company is set to lay off a number of employees.

Sources told HousingWire that Ditech notified roughly 60 employees in its Greensboro, North Carolina office that that will be laid off, effective September 1.

The actual number of employees that are going to be laid off is unknown as the company would not confirm the specifics of the layoffs, but the company did confirm that it is currently undergoing a shift in its business model and consolidating some of its operations.

“Over the past several years the mortgage industry has shifted to a more ‘normalized’ market, as defaults across the industry continue to decline,” the company said in a statement.

“This shift in the market environment led us to reevaluate our operating model,” Ditech continued. “To ensure we are meeting the demands of the current and future environment while also operating efficiently, we have redesigned our collections and loss mitigation roles, and have made the decision to consolidate some servicing and technology functions to our larger operations sites to gain greater efficiencies across our business.”'

As it turns out, Ditech's layoffs in Greensboro aren't the only ones that the company is engaging in.

On Monday, the San Antonio Business Journal reported that Ditech plans to lay off 78 employees from its San Antonio office, due to the same reasons as the layoffs in Greensboro. 

From the San Antonio Business Journal:

Ditech Financial LLC, a subsidiary of Walter Investment Management Corp., plans to shut down its local office by the end of September, according to a letter obtained by the San Antonio Business Journal.

More than a dozen customer service representatives, nearly 50 debt collectors and several management-level positions are being eliminated. 

This isn’t the first time that reports of layoffs hit Ditech this year.

Earlier this year, the St. Louis Post-Dispatch reported that Ditech planned to close its collections operations in Earth City, Missouri and lay off 103 employees. 

But the company told HousingWire that the Post-Dispatch report was incorrect because the location was not being closed. Rather, Ditech said, the location was being shifted from servicing operations to originations.

Ditech also said that all 103 employees at the Earth City location would be offered continued employment with the company, if they were willing to shift to originations. At the time, the company said it anticipates a “significant number” of those employees to accept their offers.

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