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SEC Filings

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

Net Servicing Revenue and Fees
A summary of net servicing revenue and fees for our Servicing segment is provided below (dollars in thousands):
 
 
Successor
 
 
Predecessor
 
Variance
 
 
For the Period From February 10, 2018 Through December 31, 2018
 
 
For the Period From January 1, 2018 Through February 9, 2018
 
For the Year Ended December 31, 2017
 
$
 
%
Servicing fees
 
$
328,723

 
 
$
52,071

 
$
485,201

 
$
(104,407
)
 
(22
)%
Incentive and performance fees
 
36,779

 
 
5,385

 
51,298

 
(9,134
)
 
(18
)%
Ancillary and other fees
 
59,314

 
 
6,891

 
79,005

 
(12,800
)
 
(16
)%
Servicing revenue and fees
 
424,816



64,347

 
615,504

 
(126,341
)
 
(21
)%
Changes in valuation inputs or other assumptions (1)
 
2,195

 
 
78,132

 
(134,573
)
 
214,900

 
(160
)%
Other changes in fair value (2)
 
(99,202
)
 
 
(13,469
)
 
(131,673
)
 
19,002

 
(14
)%
Change in fair value of servicing rights
 
(97,007
)


64,663


(266,246
)
 
233,902

 
(88
)%
Amortization of servicing rights
 
(5,976
)
 
 
(1,507
)
 
(20,460
)
 
12,977

 
(63
)%
Change in fair value of servicing rights related liabilities
 

 
 

 
(62
)
 
62

 
(100
)%
Net servicing revenue and fees
 
$
321,833



$
127,503

 
$
328,736

 
$
120,600

 
37
 %
__________
(1)
Represents the net change in servicing rights carried at fair value resulting primarily from market-driven changes in interest rates and prepayment speeds.
(2)
Represents the realization of expected cash flows over time.
Servicing fees decreased $104.4 million in 2018 as compared to 2017 primarily due to the shift of our third-party servicing portfolio from servicing to subservicing and continued runoff of the overall servicing portfolio. Our servicing fees have been negatively affected by the shift in our portfolio towards subservicing as we earn a lower fee for subservicing accounts in relation to servicing accounts.
Incentive and performance fees include modification fees, fees earned under HAMP, asset recovery income, and other incentives. Asset recovery income decreased $4.8 million in 2018 as compared to 2017 due primarily to runoff of the related portfolio. Performance incentives decreased $3.0 million in 2018 as compared to 2017 due primarily to fewer short sales and modifications. Fees earned under HAMP decreased $2.7 million in 2018 as compared to 2017 due primarily to fewer loans having been eligible for these incentives due to the expiration of HAMP and winding down of the program. Other modification fees increased $1.3 million in 2018 as compared to 2017 due to a higher number of Freddie Mac modifications due to efficiencies made in processing these modifications within our MSP system and a higher number of Fannie Mae modifications completed due to converting disaster forbearances from 2017, offset in part by runoff of the related portfolio.
Ancillary and other fees, which primarily include late fees and expedited payment fees, decreased $12.8 million in 2018 as compared to 2017 primarily due to lower late fee income and convenience and expedited payment fees resulting from a smaller overall servicing portfolio.

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