Jeffrey Wade
Ditech Financial is a mortgage company that has been involved in several customer complaints and bankruptcy proceedings. Customers have reported issues with the company holding onto their money, mishandling their accounts, and providing poor customer service. In one instance, a customer reported that Ditech Financial turned their account into an escrow account, resulting in a negative impact on their credit rating. Another customer experienced difficulties receiving a refund from the company, despite their consistent claims and complaints. In terms of insurance checks, Ditech Financial has been known to hold insurance checks, with one customer reporting that the company sat on a $7,687 overpayment from their property insurance without crediting their account. Additionally, Ditech Financial has been involved in the distribution of unclaimed borrower funds, with instructions provided for cashing valid checks. The company also provides guidance on processing insurance claim checks, specifying that customers should not endorse or sign the check, but rather mail it to their Claims Department for further action.
| Characteristics | Values |
|---|---|
| What to do with an emergency or advanced insurance claim check | Do NOT endorse/sign the check. Ditech will endorse the check upon receipt, and return it to you. You may then apply your endorsement and begin cleanup and repairs. |
| Where to mail the check | Ditech Financial, LLC Attn: Claims Department P.O. Box 12110 Temple, AZ 85284-0109 |
| What to do after mailing the check | Ditech will review your account and inform you if additional documentation is required to assist with your claim. |
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What You'll Learn
Ditech Financial's legitimacy
Ditech Financial LLC is a legitimate mortgage company that lends and services residential mortgages. It was founded in 1995 by John Paul Reddam in Costa Mesa, California, under the name Ditech Funding Corporation. The company's name was derived from the phrase "direct technology," and it became one of the first lenders to offer mortgages to the public online and via a toll-free number.
In 1999, Ditech was acquired by GMAC (now known as Ally Financial), and Reddam left the company in 2000. In 2005, Ditech was organised as a business unit of Residential Capital, LLC (ResCap), which controlled mortgage-related subsidiaries owned by General Motors Corporation. During this time, Ditech pioneered 125% loans that allowed mortgage loan applicants to borrow more than the properties were worth, and it became well-known for its television commercials featuring a nefarious loan officer played by actor Ron Michaelson.
In 2010, GMAC changed its name to Ally Financial, and in 2012, during the mortgage crisis, Ally took its residential lending unit into bankruptcy to repay the U.S. Treasury after accepting bailout funds. Ditech was formed from the assets of the GMAC ResCap estate during this bankruptcy proceeding. In March 2013, Ditech was acquired by Walter Investment Management Co., and in 2014, the company resumed originating loans using the Ditech name.
In March 2015, Ditech and Walter Investment affiliate Green Tree Servicing announced a co-branding effort to become "Ditech Financial, A Walter Company," bringing their origination and servicing entities together under one brand name. Ditech offered a range of home loan and refinance options, including fixed-rate, adjustable-rate, and FHA loans.
However, it is important to note that Ditech has also faced some controversies and financial challenges. In 2021, some individuals reported receiving unexpected checks from Ditech, and there were concerns about the legitimacy of these payments. Additionally, Ditech has gone through bankruptcy proceedings, and as of June 2022, the Bankruptcy Court ordered the distribution of any unclaimed borrower funds remaining in the Ditech estate.
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Ditech Financial's bankruptcy proceedings
Ditech Financial, formerly known as Walter Investment Management, has had a tumultuous history with financial troubles and bankruptcy proceedings. In December 2017, the company filed for Chapter 11 bankruptcy, hoping to restructure and emerge on solid footing. However, in February 2019, just 14 months later, Ditech filed for Chapter 11 bankruptcy once again, indicating that their financial woes had not been resolved.
This second bankruptcy filing included its subsidiaries, Ditech Financial and Reverse Mortgage Solutions, signalling a comprehensive restructuring effort. The company aimed to eliminate an additional $800 million in debt, improve liquidity, and build a robust working capital facility. To facilitate a smooth transition, Ditech sought relief from the Bankruptcy Court, which granted their requested First Day Motions, authorizing various measures to minimize disruptions to their operations.
During the bankruptcy proceedings, Ditech sent letters and provided FAQs to its customers, assuring them of their commitment to serving customers through the homeownership journey. Despite these efforts, the company's troubles persisted, and by December 2019, Ditech no longer serviced any mortgages and had ceased active business operations.
In June 2022, the Bankruptcy Court ordered the distribution of any remaining unclaimed borrower funds in the Ditech estate. This marked a significant milestone in the winding down of Ditech's operations, as they were no longer able to process the return of unclaimed funds directly to borrowers. Instead, any unclaimed funds would be escheated to the relevant state's unclaimed property agency, allowing borrowers to claim their funds through the appropriate channels.
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Ditech Financial's escrow accounts
Ditech Financial LLC offers escrow accounts to its customers, which are common and used to pay property bills such as city or county taxes. An escrow statement is an annual analysis of the account, delivered once a year on a schedule unique to the loan. The statement details how much money was paid into the account and how much was paid out since the last escrow review, as well as expected payments.
The escrow statement is designed to be easy to read and understand, and is broken up into five sections across two pages. It includes key information such as whether the account has a surplus or shortage, and any changes to the monthly mortgage payment. Understanding the escrow account can help customers plan their budgets, read their escrow analysis statements, and prepare to pay off their loans.
In some cases, Ditech has sent customers checks for a surplus in their escrow accounts, which have bounced due to the company's bankruptcy proceedings. Ditech Financial accounts were frozen for a period during these proceedings, and the company has advised customers to re-present bounced checks to their bank or financial institution. Ditech will reimburse customers for bounced check fees of up to $35.
Ditech Financial LLC also offers short sale escrow services, where the typical escrow process begins after all debt holders have given their approval. The company's income for this service comes from the escrow closing account.
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Ditech Financial's insurance check processing
Ditech will then endorse the check upon receipt and return it to you. Once you receive the endorsed check, you can proceed to sign or endorse it and begin any necessary cleanup and repairs. It's worth noting that this initial check may be the first of multiple payments, depending on the detailed inspection by your insurance company.
Ditech will review your account and inform you if additional documentation is required to support your claim. Subsequent checks received as part of your claim may also be subject to further documentation requirements. For non-emergency insurance claim checks, customers are advised to contact Ditech's Customer Service at the provided phone number to initiate the process.
While Ditech Financial provides these instructions for insurance check processing, there are customer reviews that indicate issues with the handling of insurance-related matters. Some customers have reported delays and discrepancies in crediting their accounts, even when providing supporting documentation for tax and insurance payments. There are also complaints of escrow shortages and inflated monthly payments, which suggest challenges in managing customer finances effectively.
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Ditech Financial's customer service
Ditech Financial, formerly known as Greentree Servicing, offers customer support through various channels. The company's website and help centre provide resources and information to address common queries and issues. Additionally, customers can contact Ditech via phone or email for personalised assistance. The customer service phone number for Ditech is (800) 700-9212, and this line can be used to resolve issues related to products/services, requests for information, and payments and charges.
In recent years, there have been reports of individuals receiving unexpected checks from Ditech, prompting concerns about their legitimacy. These checks were reportedly issued as refunds for overpayments or escrow surpluses. While some recipients successfully cashed the checks, others encountered discrepancies with routing numbers and were advised to exercise caution.
Ditech Financial has gone through bankruptcy proceedings, and as of June 8, 2022, the Bankruptcy Court ordered the distribution of any remaining unclaimed borrower funds in the Ditech estate. This order stipulates that valid unexpired checks can still be cashed, but any unclaimed funds will be escheated to the relevant state's unclaimed property agency. Therefore, customers with outstanding checks from Ditech are advised to cash them promptly to avoid potential issues.
Overall, while Ditech Financial's customer service appears to be available through standard channels, the company's financial situation may have impacted its responsiveness and ability to promptly address customer concerns.
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Frequently asked questions
If you receive an insurance check from Ditech Financial, do not endorse or sign the check. Mail the check to their Claims Department, who will endorse the check and return it to you. You may then apply your endorsement and begin repairs.
Ditech Financial has filed for bankruptcy and is no longer able to process the return of any unclaimed funds. If you have a valid check that has not expired, cash the check. If the check has expired, any remaining funds will be escheated to the unclaimed property agency for your state, and you will be able to claim the funds from there.
This check is likely the first of two or more that you will receive, depending on the results of a detailed inspection by the insurance company. It is usually a round figure, such as $10,000, and it is payable to both you and Ditech. Follow the same process as outlined in the first A: do not endorse the check, and mail it to the Ditech Financial Claims Department.
