After a protracted legal fight and a recently-approved bankruptcy plan cleared the way for a final sale, Ditech Holding Corporation has announced that it has completed the stock and assets sale comprising reverse mortgage servicing business Reverse Mortgage Solutions to buyer Mortgage Assets Management, LLC. In a press release announcing the completion of the transaction, RMS is, “continuing to serve its customers in the ordinary course,” Ditech says.
“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,” said Thomas F. Marano, Chairman of the Board and Chief Executive Officer of Ditech Holding in the press release announcing the sale. “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.”
Additionally, Ditech expects to close the sale of its forward mortgage servicing business, Ditech Financial, to buyer New Residential Investment Corp in the “coming days,” the press release says. Until then, Ditech Financial will continue as a subsidiary of Ditech Holding.
After legal complications put the original plans for the sales of the servicing businesses in doubt due to issues the presiding bankruptcy judge expressed over equitably addressing the concerns of previous Ditech customers, Ditech submitted an amended plan that addressed those consumer concerns. When a committee of consumer creditors and the presiding bankruptcy judge approved the amended plan, the legal roadblocks dissipated and set the involved parties on a course to closing the sales of both servicing businesses.
This is the apparent resolution to an odyssey of legal and financial issues that have afflicted Ditech in concert with RMS. Creditors and individual borrowers previously mounted their legal effort in court previously in an attempt to halt the sale of the servicing businesses “free and clear” of existing legal obligations.
New Residential, the proposed buyer of forward mortgage servicer Ditech Financial, previously related that Ditech’s legal complications had the possibility of delaying the timetable of the purchase of its forward business, though New Residential’s CEO related confidence that the sale would go through as planned.
The buyer for RMS, Mortgage Assets Management, LLC (MAM), filed a pleading in support of the previous “free and clear” proposal, and presiding bankruptcy Judge James Garrity Jr. wrote in his denial of the plan that the purchase price for RMS will be reduced by $10 million if MAM assumes some of the legal complaints levied against RMS while under Ditech’s ownership.
Financial details of the deal between Ditech and MAM were not disclosed.