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SEC Filings

424B1
DITECH HOLDING CORP filed this Form 424B1 on 09/16/1997
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     Mortgage sales and servicing revenues, conducted through HCMC, decreased by
$118,000 or 18.0% from $656,000 in the first half of 1996 to $538,000 in the
first half of 1997. Revenues generated by multifamily mortgage servicing
decreased by $91,000 while mortgage sales (including revenues generated by
mortgage originations, applications and gains on sale) decreased by $27,000. The
decreased mortgage servicing revenues were a direct result of the decrease in
Multifamily Mortgage Loans serviced (servicing portfolio of $121.7 million as of
June 30, 1997 compared to $267.7 million as of June 30, 1996). Although the
volume of mortgage loans originated increased in 1997 to $37.3 million from
$36.0 million in 1996, the increase in mortgage loan volume was more than offset
by an overall decrease in the amount of origination/processing fees generated.
During the first half of 1997, fees were .87% of mortgage loans as compared to
1.18% during the same period in 1996. During the first half of 1996, HCMC added
three Multifamily Mortgage Loans to its servicing portfolio and recorded gains
on sale of $16,000. Only one loan was added to HCMC's Multifamily Mortgage Loan
servicing portfolio in 1997. The Company anticipates additional mortgage sales
and servicing revenues to be generated subsequent to the closing of the Offering
as a result of HCMC originating and servicing Multifamily Mortgage Loans and
Commercial Mortgage Loans for the Investment Portfolio.
 
     Total expenses in the first half of 1997 were $4,161,000 as compared to
$4,982,000 in the first half of 1996, a decrease of $821,000, or 16.5%.
Personnel expenses increased by $114,000 or 5.6% in the first six months of
1997, as compared to the same period in 1996. The majority of the increase in
personnel expenses related to normal merit pay increases from 1996 to 1997, an
increase in the Principals' base salaries (effective April 1, 1997) and
additional discretionary bonuses in 1997. There were minimal changes in total
staffing levels of HCP and HCMC (combined) from June 30, 1996 to June 30, 1997.
Expenses for appraisal, inspection and other professional fees were $526,000 in
the first half of 1997 as compared to $580,000 in the first half of 1996, a
decrease of $54,000 or 9.3%. This decrease resulted from the decrease of due
diligence contract work performed in the first half of 1997 as compared to the
first half of 1996 and the extent of professional fees required to close $37.3
million of Multifamily Mortgage Loans in the first half of 1997.
 
     The scope of due diligence contract work performed in the first half of
1996 was not only more complex in nature but required reviewing loan files in
many different locations. Accordingly, expenses relating to this contract work
were significantly higher in the first half of 1996 for subcontractor expense
and travel and subsistence expense ($1,206,000 and $518,000 in 1996 as compared
to $853,000 and $113,000 in 1997).
 
     The 9.7% decrease in occupancy expense resulted primarily from the decrease
in rent expense in the first half of 1997 as compared to the first half of 1996.
During 1996, HCP terminated a portion of its office lease in Illinois for space
that was not utilized and HCP (in June 1996) and HCMC (in February 1997) both
successfully renewed their office leases at lower aggregate rental amounts as
compared to their original respective leases. In 1996, HCP also reflected a one
time rental charge of $8,000 for certain office space rented in 1995.
 
     General and administrative expenses decreased from $300,000 during the
first half of 1996 to $193,000 during the first half of 1997, a $107,000
decrease. Approximately 40% of this decrease was related to the reduced data
processing/computer supply needs of due diligence contracts in 1997 as compared
to 1996. Other sizeable cost reductions in general office expense categories
(i.e., telephone, postage, advertising, etc.) were fully realized as a result of
cost containment procedures implemented during the second quarter of 1996.
 
     An additional reversal of reserve for IRS assessment of $22,000 was
reflected during the six months ended June 30, 1997 (an initial reversal of
reserve of $278,000 was recorded in the year ended December 31, 1996). In 1993,
HCP reflected a one-time charge of $400,000 relating to management's estimated
liability for the IRS payroll tax assessments for the years 1991-1993. HCP has
recently received a revised settlement offer from the IRS to pay the United
States Government $100,000 (as compared to $122,000 as was previously
contemplated at December 31, 1996).
 
     Interest expense was $67,000 in the first half of 1997 as compared to
$56,000 during the first half of 1996. The increase in interest expense was a
result of increased usage of the bank line of credit (average month end line of
credit balance for the first six months of 1997 and 1996 was $1,445,000 and
$1,185,000, respectively) and higher interest rates in effect in the first half
of 1997 as compared to the first half of 1996.
 
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