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SEC Filings

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

8. Freestanding Derivative Financial Instruments
The following table provides the total notional or contractual amounts and related fair values of derivative assets and liabilities as well as cash margin (in thousands):
 
 
Successor
 
 
Predecessor
 
 
December 31, 2018
 
 
December 31, 2017
 
 
Notional/
Contractual
Amount
 
Fair Value
 
 
Notional/
Contractual
Amount
 
Fair Value
 
 
 
Derivative
Assets
 
Derivative
Liabilities
 
 
 
Derivative
Assets
 
Derivative
Liabilities
Interest rate lock commitments
 
$
1,303,501

 
$
16,617

 
$
327

 
 
$
1,509,712

 
$
26,637

 
$
269

Forward sales commitments
 
2,300,606

 
388

 
13,359

 
 
1,724,500

 
2,224

 
903

MBS purchase commitments
 
677,500

 
1,382

 
51

 
 
298,000

 
533

 
78

Total derivative instruments
 
 
 
$
18,387

 
$
13,737

 
 
 
 
$
29,394

 
$
1,250

Cash margin
 
 
 
$
12,087

 
$

 
 
 
 
$

 
$
1,533

Derivative positions subject to netting arrangements include all forward sales commitments, MBS purchase commitments and cash margin, as reflected in the table above, and allow the Company to net settle asset and liability positions, as well as associated cash margin, with the same counterparty. After consideration of these netting arrangements and offsetting positions by counterparties, the total net settlement amount as it relates to these positions were asset positions of $1.3 million and $0.9 million, and liability positions of $1.0 million and $0.6 million, at December 31, 2018 and 2017, respectively.
During the fourth quarter of 2017, the Company terminated the previously disclosed master netting arrangements with two counterparties and entered into a new master netting arrangement associated with an existing master repurchase agreement amended under the WIMC DIP Warehouse Facilities. On February 9, 2018 upon the WIMC Effective Date of the WIMC Prepackaged Plan, the WIMC DIP Warehouse Facilities transitioned into the WIMC Exit Warehouse Facilities, whereupon the master repurchase agreement amended under the WIMC DIP Warehouse Facilities continues to provide financing for the Company's originations business. This new master netting arrangement allows for periodic offsetting of derivative positions and margins of two of the Company's counterparties against amounts associated with the WIMC Exit Warehouse Facilities. The Company had aggregate net derivative liability position with the two counterparties of less than $0.1 million at December 31, 2018 and an aggregate net derivative asset position with the two counterparties of $0.4 million at December 31, 2017. Refer to Note 19 for additional information regarding the WIMC Exit Warehouse Facilities. As discussed further in Note 31, in February 2019, the WIMC Exit Warehouse Facilities were repaid and refinanced or otherwise replaced with the DHCP DIP Warehouse Facilities.
Refer to Note 7 for a summary of the gains and losses on freestanding derivatives.
9. Residential Loans at Amortized Cost, Net
Residential loans at amortized cost, net consist of mortgage loans held for investment. The majority of these residential loans consist of loans subject to repurchase from Ginnie Mae and, at December 31, 2017, loans held in securitization trusts that have been consolidated. Refer to Note 5 for further information regarding VIEs.
Residential loans at amortized cost, net are comprised of the following components (in thousands):
 
 
Successor
 
 
Predecessor
 
 
December 31, 2018
 
 
December 31, 2017
Unpaid principal balance (1)
 
$
481,050

 
 
$
1,021,172

Unamortized discounts and other cost basis adjustments, net (2)
 
(6,230
)
 
 
(29,371
)
Allowance for loan losses
 
(940
)
 
 
(6,347
)
Residential loans at amortized cost, net (3)
 
$
473,880

 
 
$
985,454

__________
(1)
Includes loans subject to repurchase from Ginnie Mae of $466.5 million and $542.4 million at December 31, 2018 and 2017, respectively.
(2)
Includes $0.1 million and $4.5 million of accrued interest receivable at December 31, 2018 and 2017, respectively.
(3)
Includes $561.0 million of mortgage loans that are not related to consolidated VIEs at December 31, 2017. The balance at December 31, 2018 does not include any mortgage loans related to consolidated VIEs.

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