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SEC Filings

424B1
DITECH HOLDING CORP filed this Form 424B1 on 09/16/1997
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Mortgage Loans originated. In the year ended December 31, 1994, HCMC originated
in excess of $175 million of Multifamily Mortgage Loans as compared to $104
million of Multifamily Mortgage Loans in the year ended December 31, 1995. Two
conduit investors that purchased Multifamily Mortgage Loans totaling $117
million from HCMC in the year ended December 31, 1994 did not purchase any
Multifamily Mortgage Loans from HCMC in the year ended December 31, 1995. The
loss of this business was not fully replaced in the year ended December 31,
1995. The loss of Multifamily Mortgage Loan origination volume was, however,
partially offset by an increase in the average size of Multifamily Mortgage
Loans originated from $3,070,000 in the year ended December 31, 1994 to
$3,250,000 in the year ended December 31, 1995. In early 1995, management
terminated HCMC's Single Family Mortgage Loan origination operations, which had
begun in 1992. This decision also contributed to the decrease in mortgage sales
and servicing revenues from the year ended December 31, 1994 to the year ended
December 31, 1995.
 
     HCMC accounts for loan origination fees in accordance with Statement of
Financial Accounting Standards No. 91, Accounting for Nonrefundable Fees and
Costs Associated with Originating or Acquiring Loans and Initial Direct Costs of
Leases ("SFAS 91"). SFAS 91 requires loan fees to be deferred until the sale of
the loan. HCMC sells all originated Mortgage Loans to investors at the time of
origination and accordingly recognizes loan origination fees at that time. SFAS
91 further requires related direct loan origination costs to be offset by loan
origination fees.
 
     In October 1994, HCMC began its servicing operations for Multifamily
Mortgage Loans. Revenues from mortgage servicing increased from $194,000 in the
year ended December 31, 1994 to $533,000 in the year ended December 31, 1995. At
December 31, 1995, HCMC was servicing a portfolio of Multifamily Mortgage Loans
with a combined outstanding principal balance in excess of $288 million, as
compared to a principal balance of $250 million at December 31, 1994. All of the
mortgage servicing growth in 1995 resulted from retaining a portion of the
mortgage servicing rights on Multifamily Mortgage Loans originated by the
Multifamily Mortgage Loan originations operation.
 
     Revenues from mortgage servicing sales were $534,000 in the year ended
December 31, 1995, as compared to $524,000 in the year ended December 31, 1994,
an increase of 1.9%. HCMC adopted Statement of Financial Accounting Standards
No. 122, Accounting for Mortgage Servicing Rights, an amendment of FASB
Statement No. 65, effective January 1, 1995 ("SFAS 122"). Included in the
revenues from mortgage servicing sales in the year ended December 31, 1995 was
$73,000 of SFAS 122 gains from servicing rights. No similar SFAS 122 gain was
recorded in 1994.
 
     Total expenses in the year ended December 31, 1995 was $11,803,000 as
compared to $13,495,000 in the year ended December 31, 1994, a decrease of
12.5%.
 
     Personnel expense decreased from $4,002,000 in the year ended December 31,
1994 to $3,832,000 in the year ended December 31, 1995. The majority of this
decrease was attributable to the decrease in mortgage sales and servicing
revenues. The decline in mortgage origination operations from the year ended
December 31, 1994 to the year ended December 31, 1995 caused a commensurate
decrease in (i) commissions for HCMC originators, (ii) HCMC salaries and wages,
(iii) HCMC bonuses, and (iv) the related HCMC payroll taxes and employee
benefits.
 
     Appraisal, inspection and other professional fees reflected a significant
decrease of 50.5% from the year ended December 31, 1994 to the year ended
December 31, 1995 due to the decrease in commercial due diligence. Travel and
subsistence expense in the year ended December 31, 1995 was $860,000 as compared
to $315,000 in the year ended December 31, 1994, an increase of 173.0%. The
majority of this increase was a result of increased travel, lodging and meal
expenses of $519,000 incurred by due diligence contract work performed in
connection with Single-Family Mortgage Loans.
 
     The increased revenue volume for due diligence contract work performed in
connection with Single-Family Mortgage Loans and the scope of the assignments
completed in the year ended December 31, 1995 in the commercial Due Diligence
Operations required significantly more subcontract labor as compared to in the
year ended December 31, 1994. Accordingly, subcontract expense increased by
$568,000, or 26.2%, from $2,171,000 in the year ended December 31, 1994 to
$2,739,000 in the year ended December 31, 1995.
 
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