When the federal judge overseeing the bankruptcy of Ditech Holding approved the struggling nonbank’s sale of its forward and reverse mortgage businesses to New Residential Investment and Mortgage Assets Management, it was only a matter of time until those deals were completed.
As it turns out, that “matter of time” ended up being only a few days.
Earlier this year, Ditech agreed to sell its forward mortgage originations and servicing businesses to New Residential and the stock and assets of its reverse mortgage business, Reverse Mortgage Solutions, to Mortgage Assets Management.
Late last week, the United States Bankruptcy Court for the Southern District of New York approved the sale of both companies, and Monday, Ditech completed the sale of Reverse Mortgage Solutions to Mortgage Assets Management.
Under the terms of the agreement, Mortgage Assets acquired “certain stock and assets” associated with Reverse Mortgage Solutions, and agreed to maintain the current operations of RMS as a wholly-owned subsidiary.
According to Ditech, RMS is “continuing to serve its customers in the ordinary course.”
Ditech also said that it expects to close on the sale of its forward mortgage business to New Residential “in the coming days.”
Thomas Marano, Ditech Holding’s chairman of the board and CEO, said the company is “pleased” to complete the sale.
“We are pleased to complete this sale, which we believe maximizes the value of the RMS business and ensures that customers will continue to receive the comprehensive suite of services they expect from RMS,” Marano said. “We have worked closely with the team at Mortgage Assets to ensure a smooth transition for customers. I would like to thank the employees of RMS for their contributions and we wish them well as part of Mortgage Assets.”
The sale comes after years of financial trouble for Ditech, the nonbank formerly known as Walter Investment Management.
The company suffered years of financial losses, culminating in the company filing for bankruptcy. The company then completed a restructuring plan that eliminated $800 million in corporate debt, changed its name, and emerged from bankruptcy a year later.
But that wasn’t enough to salvage the company, as Ditech filed for Chapter 11 again just 14 months later. This time, it included its subsidiaries, Ditech Financial and Reverse Mortgage Solutions, in its restructuring plan.
And now, the company has sold off one of its main subsidiaries and will complete the sale of the other in a matter of days.