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SEC Filings

10-K
DITECH HOLDING CORP filed this Form 10-K on 04/16/2019
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In connection with these facilities, we entered into an acknowledgment agreement with Fannie Mae, dated as of February 9, 2018, with subsequent amendments to the agreement dated April 20, 2018 and February 14, 2019, that waived Fannie Mae's respective rights of set-off against rights to reimbursement for certain servicer advances and delinquency advances subject to the DAAT Facility. The Fannie Mae acknowledgment agreement remains in effect unless Fannie Mae withdraws its consent (i) at each yearly anniversary of the agreement by providing 30 days' advance written notice or (ii) upon certain other specified events. If Fannie Mae were to withdraw such waiver or subordination, as applicable, of its respective rights of set-off, our ability to increase the draws on the variable funding notes or maintain the drawn balances thereunder could be materially limited or eliminated.
The indenture supplements of the original series of variable funding notes under the DAAT Facility and DPAT II Facility were further amended throughout 2018 to, amongst other things, reduce the minimum liquidity and profitability requirements for certain periods in the remaining term of each agreement. Ditech Financial was not in compliance with the quarterly profitability covenant included in the original indenture supplements of the DAAT Facility and the DPAT II Facility for the quarter ended December 31, 2018. On February 14, 2019, the original series of variable funding notes under the DAAT Facility and DPAT II Facility were repaid and refinanced with new series of variable funding notes issued under new indenture supplements in conjunction with the DHCP DIP Warehouse Facilities as discussed further above.
Early Advance Reimbursement Agreement
Ditech Financial's Early Advance Reimbursement Agreement with Fannie Mae was used exclusively to fund certain principal and interest and servicer and protective advances that are the responsibility of Ditech Financial under its Fannie Mae servicing agreements. In April 2018, we entered into an acknowledgment agreement with Fannie Mae, whereupon the Early Advance Reimbursement Agreement was terminated. We fully repaid the outstanding balance on the Early Advance Reimbursement Agreement upon termination, and the advances were pledged as collateral on the DAAT Facility.
Mortgage Loan Originations Business
Master Repurchase Agreements
Ditech Financial utilizes master repurchase agreements with various warehouse lenders to fund the origination and purchase of residential loans. These facilities provide creditors a security interest in the mortgage loans that meet the eligibility requirements under the terms of each particular facility in exchange for cash proceeds used to originate or purchase mortgage loans. We agree to repay borrowings under these facilities within a specified timeframe, and the source of repayment is typically from the sale or securitization of the underlying loans into the secondary mortgage market. We evaluate our needs under these facilities based on forecasted mortgage loan origination volume; however, there can be no assurance that these facilities will be available to us in the future.
On February 9, 2018, in connection with the WIMC Effective Date of the WIMC Prepackaged Plan, the WIMC DIP Warehouse Facilities transitioned into the WIMC Exit Warehouse Facilities, whereupon the WIMC Ditech Financial Exit Master Repurchase Agreement amended under the WIMC DIP Warehouse Facilities would continue to provide financing for Ditech Financial's origination business. Upon the WIMC Effective Date, the WIMC Ditech Financial Exit Master Repurchase Agreement was amended to, among other things, extend the maturity date to February 8, 2019, change the interest rate to the lender's applicable index, plus a per annum margin of 2.25%, and increase the maximum capacity sub-limit available to finance Ditech Financial's origination business to $1.0 billion. The WIMC Ditech Financial Exit Master Repurchase Agreement, together with the WIMC RMS Exit Master Repurchase Agreement and the DAAT and DPAT II Facilities were subject, collectively, to a combined maximum outstanding amount of $1.9 billion under our WIMC Exit Warehouse Facilities. At December 31, 2018, the WIMC Ditech Financial Exit Master Repurchase Agreement had an outstanding balance of $689.7 million, and the WIMC Exit Warehouse Facilities in total had an outstanding balance of $1.3 billion.
As discussed further above, on February 14, 2019, the WIMC Ditech Financial Exit Master Repurchase Agreement was repaid and refinanced with the DHCP DIP Warehouse Facilities.
Our ability to utilize our master repurchase facilities from time to time depends, among other things, upon us being able to make representations and warranties as to our solvency, the accuracy of information we have furnished, no material adverse changes having occurred, maintenance of our approved seller/servicer status with GSEs, no notices of adverse actions having been received from GSEs or agencies, the adequacy of our control program, our ability to service loans in accordance with accepted servicing practices and our compliance with applicable laws. The WIMC Ditech Financial Exit Master Repurchase Agreement contains customary events of default and financial covenants. Financial covenants that are most sensitive to the operating results of our subsidiaries and resulting financial position are minimum tangible net worth requirements, indebtedness to tangible net worth ratio requirements, and minimum liquidity and profitability requirements.

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