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SEC Filings

424B1
DITECH HOLDING CORP filed this Form 424B1 on 09/16/1997
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decrease Mortgage Loan purchase volume levels, resulting in decreased economies
of scale and higher costs per unit, reduced fee income, smaller gains on the
sale of Mortgage Loans and lower net income during the accumulation phase.
 
     FNMA and FHLMC are not currently permitted to purchase Single-Family
Mortgage Loans with original principal balances above $214,600, with certain
exceptions. If this dollar limitation were increased without a commensurate
increase in home prices, the Company's ability to maintain or increase its
current acquisition levels could be adversely affected as the size of the
non-conforming Single-Family Mortgage Loan market may be reduced, and FNMA and
FHLMC may be in a position to purchase a greater percentage of the Single-Family
Mortgage Loans in the secondary market than they currently acquire.
 
  Lack of Geographic Diversification
 
     Although the Company intends to seek geographic diversification of the
properties underlying the Company's Mortgage Assets, it does not intend to set
specific diversification requirements (whether by state, zip code or other
geographic measure). Concentration in any one area will increase exposure of the
Company's Investment Portfolio to the economic and natural hazard risks
associated with that area. See "Business -- Risk Management -- Credit Risk
Management."
 
  Ability to Acquire Mortgage Assets at Favorable Spreads Relative to Borrowing
Costs; Competition and Supply
 
     The Company's net income depends on the Company's ability to acquire
Mortgage Assets at favorable spreads over the Company's borrowing costs. In
acquiring Mortgage Assets, the Company competes with other REITs, investment
banking firms, savings and loan associations, banks, mortgage bankers, insurance
companies, mutual funds, other lenders, GNMA, FNMA, FHLMC, and other entities
purchasing Mortgage Assets, many of which have greater financial resources than
the Company and more experience in securitizations. In addition, there are
several mortgage REITs similar to the Company, and others may be organized in
the future. The effect of the existence of additional REITs may be to increase
competition for the available supply of Mortgage Assets suitable for purchase by
the Company. There can be no assurance that the Company will be able to acquire
sufficient Mortgage Assets from mortgage suppliers at spreads above the
Company's cost of funds. The Company will also face competition for financing,
and the effect of the existence of additional mortgage REITs may be to reduce
the Company's access to sufficient funds to carry out its business strategy
and/or to increase the costs of funds to the Company. Continued consolidation in
the financial services industry may also reduce the number of current sellers of
Mortgage Assets to the Investment Portfolio, thus reducing the Company's
potential customer base, resulting in the Company's purchasing a larger
percentage of Mortgage Loans from a smaller number of sellers. Such changes
could negatively impact the Investment Portfolio. See "Business -- Competition."
 
     The Company will face competition in its Due Diligence Operations from
financial institutions, including, but not limited to, banks and investment
banks. Many of the institutions with which the Company will compete in this area
have significantly greater financial resources than the Company. Increased
competition in the Due Diligence Operations could adversely affect the Company's
profitability. See "Business -- Competition."
 
FAILURE TO MAINTAIN REIT STATUS; COMPANY SUBJECT TO TAX AS A REGULAR CORPORATION
 
     The Company intends to qualify as a REIT for Federal income tax purposes.
To qualify as a REIT, the Company must satisfy a series of complicated tests
related to, among other things, the nature of its assets and income, the
ownership of its Common Stock, and the amount and timing of distributions to its
stockholders. The REIT election will cover only HCHI and not any of the
Company's taxable subsidiaries, including HCP, HCMC and HCS, which will be
subject to Federal income tax. See "Federal Income Tax Considerations --
Requirements for Qualification as a REIT;" -- "Taxation of Taxable Affiliates."
 
     The continued qualification of the Company as a REIT could be jeopardized
by, among other things, (i) the hedging of interest rate and prepayment risks
with instruments that are not Qualified REIT Assets or
 
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