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SEC Filings

424B1
DITECH HOLDING CORP filed this Form 424B1 on 09/16/1997
Entire Document
 
<PAGE>   117
 
                 HANOVER CAPITAL PARTNERS LTD. AND SUBSIDIARIES
 
           NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
                YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994 AND
          FOR THE SIX MONTHS ENDED JUNE 30, 1997 AND 1996 (UNAUDITED)
 
accounts for the payment of principal and interest to investors and property
taxes and insurance premiums on behalf of borrowers. As of June 30, 1997 and
December 31, 1996 and 1995, HCMC was servicing 44, 46 and 96 loans, respectively
with unpaid principal balances of $121,695,190, $129,315,400 and $285,790,700,
including loans subserviced for others of $42,871,500 $44,241,919 and
$176,705,450, respectively. Escrow balances maintained by HCMC were $3,802,300,
$4,352,400 and $11,543,200 at June 30, 1997, December 31, 1996 and 1995,
respectively. The aforementioned servicing portfolio and related escrow accounts
are not included in the accompanying consolidated balance sheets as of June 30,
1997, December 31, 1996 and 1995.
 
     The Company adopted SFAS 122 effective January 1, 1995. Activity in
mortgage servicing rights for the, six months ended June 30, 1997 and for the
years ended December 31, 1996 and 1995 was as follows:
 

<TABLE>
<CAPTION>
                                                          1997           1996         1995
                                                       -----------     --------     ---------
                                                       (UNAUDITED)
    <S>                                                <C>             <C>          <C>
    Beginning balance..............................     $  30,587      $ 46,904     $      --
    Capitalization.................................         3,884        37,451       264,141
    Sales..........................................            --       (41,725)     (190,976)
    Scheduled amortization.........................        (5,455)      (12,043)      (26,261)
                                                        ---------      --------     ---------
                                                        $  29,106      $ 30,587     $  46,904
                                                        =========      ========     =========
</TABLE>

 
     The fair value of the Company's servicing rights at December 31, 1996 and
1995 was $46,606 and $54,029, respectively.
 
6.  RELATED PARTY TRANSACTIONS
 
     Receivables from related parties at June 30, 1997, December 31, 1996 and
1995 consist of the following:
 

<TABLE>
<CAPTION>
                                                           1997          1996         1995
                                                        ----------     --------     --------
                                                        (UNAUDITED)
    <S>                                                 <C>            <C>          <C>
    Due from ABH-I LLC (includes $1,213,051, $431,118
      and -0- of asset management fees at June 30,
      1997, December 31, 1996 and 1995,
      respectively)...................................  $1,260,018     $451,604     $ 49,660
    Due from Hanover Asset Services, Inc..............       7,676        6,420        5,144
    Due from (to) Alpine/Hanover LLC..................      13,449        4,361         (838)
    Due from Alpine/Hanover II, LLC...................       2,000           --           --
                                                        ----------     --------     --------
    Due from related entities.........................   1,283,143      462,385       53,966
    Due from officers.................................     142,034      166,686      175,838
                                                        ----------     --------     --------
    Receivables from related parties..................  $1,425,177     $629,071     $229,804
                                                        ==========     ========     ========
</TABLE>

 
     The amounts due from related entities, ABH-I LLC, Hanover Asset Services,
Inc., Alpine/Hanover LLC, and Alpine/Hanover II, LLC represent amounts due from
entities in which the Company has a minority interest (49% or less). Such
receivables resulted primarily from fees generated from asset management
services and out-of-pocket expenses.
 
     The Company provides asset management services and receives reimbursement
for out-of-pocket expenses incurred in connection with providing such services
to certain affiliates. Revenues for such services are recognized in the period
earned and amounted to approximately $850,000, $1,370,000, $1,362,000 and
$304,000 for the six month period ended June 30, 1997 and for the years ended
December 31, 1996, 1995 and 1994, respectively.
 
                                      F-13