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SEC Filings

10-K
DITECH HOLDING CORP filed this Form 10-K on 04/16/2019
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On April 23, 2018, RMS entered into an additional master repurchase agreement which, as of December 31, 2018, provides up to $412.0 million in total capacity, and a minimum of $400.0 million in committed capacity to fund the repurchase of certain HECMs and real estate owned from Ginnie Mae securitization pools. The interest rate on this facility was based on the applicable index rate plus 3.25%.
As discussed further in Note 31, on February 14, 2019, the WIMC Exit Warehouse Facilities and the additional RMS master repurchase agreement entered into on April 23, 2018 were repaid and refinanced or otherwise replaced with the DHCP DIP Warehouse Facilities.
On October 1, 2018, the Company executed a transaction that provided $230.0 million of additional secured financing for certain HECMs and real estate owned previously repurchased from Ginnie Mae securitization pools. Under the transaction, the participating interests in certain HECMs and real estate owned that the Company had previously repurchased from Ginnie Mae securitization pools, and that were secured by existing warehouse borrowings, were pledged as collateral on variable funding notes issued by a wholly-owned subsidiary under the transaction. Refer to Note 5 for additional information. The variable funding notes are non-recourse, incur interest monthly at a rate of 6.00% per annum, and expire on October 2025. The variable funding notes had outstanding borrowings of $225.4 million at December 31, 2018.
At December 31, 2018, $689.7 million of the outstanding borrowings under the master repurchase agreements were secured by $759.3 million in originated and purchased residential loans and $626.6 million of outstanding borrowings under the master repurchase agreements and the variable funding notes were secured by $957.2 million and $24.5 million in repurchased HECMs and real estate owned, respectively. Refer to Note 5 for additional information regarding the collateral securing the variable funding notes. The facilities had a weighted-average stated interest rate of 5.86% and 5.47% at December 31, 2018 and 2017, respectively.
Borrowings utilized to fund the origination and purchase of residential loans are due upon the earlier of sale or securitization of the loan or within 90 days of borrowing. On average, the Company sells or securitizes these loans approximately 20 days from the date of borrowing. Borrowings under master repurchased agreements utilized to repurchase HECMs and real estate owned are due upon the earlier of receipt of claim proceeds from HUD or receipt of proceeds from liquidation of the related real estate owned. In any event, borrowings associated with certain repurchased HECMs and real estate owned are due within 180 days to 365 days. In accordance with the terms of the agreements, the Company may be required to post cash collateral should the fair value of the pledged assets decrease below certain contractual thresholds. The Company is exposed to counterparty credit risk associated with the repurchase agreements in the event of non-performance by the counterparties. The amount at risk during the term of the repurchase agreement is equal to the difference between the amount borrowed by the Company and the fair value of the pledged assets. The Company mitigates this risk through counterparty monitoring procedures, including monitoring of the counterparties' credit ratings and review of their financial statements.
All of the Company’s master repurchase agreements contain customary events of default and financial covenants. Financial covenants that are most sensitive to the operating results of the Company's subsidiaries and resulting financial position are minimum tangible net worth requirements, indebtedness to tangible net worth ratio requirements, and minimum liquidity and profitability requirements. Each of Ditech Financial's and RMS' master repurchase agreements were further amended throughout 2018 to, amongst other things, reduce the minimum liquidity and, an in the case of Ditech Financial, minimum profitability requirements, for certain periods in the remaining term of the agreement. Ditech Financial was not in compliance with the quarterly profitability covenant included in the WIMC Ditech Financial Exit Master Repurchase Agreement for the quarter ended December 31, 2018; however, on February 14, 2019 this facility, as well as the WIMC RMS Exit Master Repurchase Agreement and the additional RMS master repurchase agreement originally entered into on April 23, 2018, were repaid and refinanced or otherwise replaced with the DHCP DIP Warehouse Facilities, and it was not necessary to seek any additional amendment or waivers related to the profitability requirement. Refer to Note 31 for further information on the DHCP DIP Warehouse Facilities.

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