Ditech Holding Hangs On To RMS Despite Profit Losses
Ditech Holding Corporation intends on keeping Reverse Mortgage Solutions, despite a number of losses that leads to worry that it may never successfully emerge from Chapter 11 bankruptcy, according to a recent report.
“Our reverse mortgage business has been unprofitable and we expect losses to continue in this segment,” according to Ditech's 10-K filing, reported by Reverse Mortgage Daily.
“Our reverse mortgage business generated significant losses before income tax [and we] expect to continue to generate losses in that segment. We service a substantial portfolio of reverse loans and expect to incur continued losses on that servicing activity.”
The majority of the losses have been linked to the costs associated with servicing defaulted reverse loans. As for the current debt, the company put its approximate number at $3 billion.
“Our level of indebtedness could adversely affect our ability to raise additional capital to fund our operations, limit our ability to react to changes in the economy or our industry, expose us to interest rate risk to the extent of our variable rate debt and prevent us from meeting our obligations,” according to the report.
To learn more about the issues plaguing RMS and its parent company Ditech Holding Corporation, click on the image above.