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SEC Filings

10-K
DITECH HOLDING CORP filed this Form 10-K on 04/16/2019
Entire Document
 

 
Predecessor
 
For the Year Ended December 31, 2017
 
Fair Value
January 1,
2017
 
Total
Gains (Losses)
Included in
Comprehensive Loss
 
Purchases and Other
 
Sales and Other
 
Originations / Issuances
 
Settlements
 
Transfers Out of Level 3
 
Fair Value
December 31, 2017
Assets
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Reverse loans
$
10,742,922

 
$
242,288

 
$
44,769

 
$

 
$
337,378

 
$
(1,577,913
)
 
$

 
$
9,789,444

Mortgage loans related to Non-Residual Trusts (1)
450,377

 
25,214

 

 
(88,842
)
 

 
(85,314
)
 

 
301,435

Mortgage loans held for sale (1)

 
(131
)
 

 
1,671

 

 
(1,472
)
 

 
68

Charged-off loans (2)
46,963

 
39,072

 

 

 

 
(40,235
)
 

 
45,800

Receivables related to Non-Residual Trusts
15,033

 
5,224

 

 

 

 
(14,649
)
 

 
5,608

Servicing rights carried at fair value (3)
936,423

 
(263,629
)
 
670

 
5,356

 
70,801

 

 
(34,847
)
 
714,774

Freestanding derivative instruments (IRLCs)
53,394

 
(26,556
)
 

 

 

 
(201
)
 

 
26,637

Total assets
$
12,245,112

 
$
21,482

 
$
45,439

 
$
(81,815
)
 
$
408,179

 
$
(1,719,784
)
 
$
(34,847
)
 
$
10,883,766

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Liabilities
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Freestanding derivative instruments (IRLCs)
$
(4,193
)
 
$
3,924

 
$

 
$

 
$

 
$

 
$

 
$
(269
)
Mortgage-backed debt related to Non-Residual Trusts
(514,025
)
 
(26,519
)
 

 

 

 
191,862

 

 
(348,682
)
HMBS related obligations
(10,509,449
)
 
(199,869
)
 

 

 
(464,192
)
 
1,998,382

 

 
(9,175,128
)
Total liabilities
$
(11,027,667
)
 
$
(222,464
)
 
$

 
$

 
$
(464,192
)
 
$
2,190,244

 
$

 
$
(9,524,079
)
__________
(1)
During the year ended December 31, 2017, $25.1 million of loans transferred from mortgage loans related to Non-Residual Trusts to mortgage loans held for sale upon exercising mandatory call obligations reflected within "Sales and Other" in the above table. Refer to Note 29 for additional information on the mandatory call obligations. In December 2017, a majority of these loans were sold to NRM for $23.4 million
(2)
Included in gains on charged-off loans are gains from instrument-specific credit risk, which primarily result from changes in assumptions related to collection rates, of $15.8 million during the year ended December 31, 2017.
(3)
Amounts transferred out of Level 3 consisted of servicing rights that were transferred to Level 2 during the third quarter of 2017. These transfers resulted from an agreement with a third-party to sell such servicing rights, which were subsequently sold during the fourth quarter of 2017. In total, the Company sold $117.5 million of servicing rights during the year ended December 31, 2017. Refer to Note 13 for additional information on servicing rights sold during the year.
Refer to Note 3 for the location within the consolidated statements of comprehensive income (loss) of the gains and losses resulting from changes in fair value of assets and liabilities disclosed above. Total gains and losses included above include interest income and interest expense at the stated rate for interest-bearing assets and liabilities, respectively, accretion and amortization, and the impact of the changes in valuation inputs and assumptions.
The Company’s Valuation Committee determines and approves valuation policies and unobservable inputs used to estimate the fair value of items measured at fair value on a recurring basis. The Valuation Committee, consisting of certain members of the senior executive management team, meets on a quarterly basis to review the assets and liabilities that require fair value measurement, including how each asset and liability has actually performed in comparison to the unobservable inputs and the projected performance. The Valuation Committee also reviews related available market data. Fair value adjustments relating to the adoption of fresh start accounting are discussed in more detail in Note 2.
The following is a description of the methods used to estimate the fair values of the Company’s assets and liabilities measured at fair value on a recurring basis, as well as the basis for classifying these assets and liabilities as Level 2 or 3 within the fair value hierarchy. The Company’s valuations consider assumptions that it believes a market participant would consider in valuing the assets and liabilities, the most significant of which are disclosed below. The Company reassesses and periodically adjusts the underlying inputs and assumptions used in the valuations for recent historical experience, as well as for current and expected relevant market conditions.

F-37