Haris Ashley
Ditech Financial LLC, formerly known as ditech Mortgage, is a provider of home loans, loan servicing, and refinance products in the US. In 2019, Ditech filed for bankruptcy, and its forward mortgage servicing and originations business, Ditech Financial LLC, was acquired by New Residential Investment Corp. Assurant, Inc. is a global provider of risk management solutions with a focus on the housing and lifestyle markets. In 2016, Assurant acquired Green Tree Insurance Agency, Inc., a subsidiary of Walter Investment Management, which manages Ditech Financial Services. This acquisition allowed Assurant to retain its existing insurance business with Ditech borrowers and expand its presence in the housing market. Given the relationship between Ditech and Assurant through Green Tree Insurance Agency, there may be speculation about whether the two companies are in cahoots. However, further investigation and analysis would be needed to draw any definitive conclusions.
| Characteristics | Values |
|---|---|
| Ditech | A mortgage lender with a tumultuous history, Ditech provides various mortgage options, including fixed-rate, adjustable-rate, FHA, and VA loans. |
| Assurant | A global provider of risk management solutions, Assurant focuses on the housing and lifestyle markets. It is among the market leaders in mobile device protection, extended service contracts, vehicle protection, and more. |
| Relationship | In 2019, Assurant acquired Green Tree Insurance Agency, a subsidiary of Walter Investment Management, which services Ditech Financial Services. |
| Impact | The acquisition allows Assurant to retain its existing book of voluntary insurance for home mortgage borrowers serviced by Ditech and write additional business for Ditech borrowers. |
| Ditech Financial Status | Ditech Financial LLC, Ditech's forward mortgage servicing and originations business, was acquired by New Residential Investment Corp. in 2019 after Ditech filed for bankruptcy for the second time. |
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What You'll Learn
Ditech's bankruptcy and acquisition by New Residential Investment Corp
Ditech Financial LLC, a provider of home loan, loan servicing and refinance products, filed for bankruptcy in February 2019. This was the second time the company had filed for bankruptcy in as many years.
Ditech's forward mortgage servicing and originations business was acquired by New Residential Investment Corp. later in 2019. New Residential is a leading provider of capital and services to the mortgage and financial services industries. The acquisition of Ditech's assets, in addition to those already owned and operated through NewRez and Shellpoint Mortgage Servicing, furthered New Residential's position as an industry-leading originator and servicer.
New Residential has a proven track record of performance, growing and protecting the value of its assets while generating attractive risk-adjusted returns. The company has built a diversified, hard-to-replicate portfolio with high-quality investment strategies that have generated returns across different interest rate environments.
Following the acquisition, Thomas F. Marano, Chairman of the Board and Chief Executive Officer of Ditech Holding, said:
> "We are pleased to complete this value-maximizing sale that enables Ditech Financial to continue serving customers and homeowners as we transition to the new servicers. We know the team at New Residential well and have worked closely with them to ensure a smooth transition for customers. I would like to thank our employees for their hard work and dedication to serving our customers throughout this process."
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Assurant's acquisition of Green Tree Insurance Agency
Assurant Inc., a global provider of risk management solutions, acquired Green Tree Insurance Agency, Inc. from a wholly-owned subsidiary of Walter Investment Management Corp. The acquisition was announced on January 4, 2017, for a total cash consideration of $125 million, with a potential earnout of up to $25 million based on future performance.
Green Tree Insurance Agency, with offices in Rapid City, South Dakota, and St. Paul, Minnesota, sells housing protection products, including voluntary homeowners' and manufactured housing policies, and other insurance products. The acquisition of Green Tree Insurance Agency aligns with Assurant's strategic focus on the housing market and enables the company to expand its voluntary offerings to new and existing clients.
Through this acquisition, Assurant retained its existing book of voluntary insurance for home mortgage borrowers whose loans are serviced by Walter Investment Management Corp.'s subsidiary, Ditech Financial Services. This provided Assurant with the opportunity to write additional voluntary business for Ditech borrowers and improve margins on the existing block of business.
Alan Colberg, president and chief executive officer of Assurant, commented on the acquisition: "We are building upon the strength of our 30-year history with Green Tree. More importantly, this acquisition enables Assurant to further its strategic focus in the housing market by expanding our voluntary offerings, through this distribution channel, to new and existing clients."
The transaction was expected to close in the first quarter of 2017, subject to customary closing conditions and regulatory approval. Assurant anticipated a minimal impact on its GAAP earnings in 2017 as a result of the acquisition.
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Ditech's mortgage options and rates
Ditech, a mortgage lender founded in 1995, offers a range of home loan and refinance options. The company was one of the first to offer mortgages to the public online and via a toll-free number.
Ditech's home loan options include fixed-rate mortgages, adjustable-rate mortgages, and FHA loans. FHA loans are insured by the Federal Housing Administration and have less strict requirements than conventional loans, including lower credit score and down payment minimums. This makes them popular with first-time homebuyers and millennials.
Ditech also offers VA loans, which are government-backed mortgages exclusively available to veterans, service members, and certain surviving military spouses. VA loans offer a $0 down payment option and the ability to refinance up to 100% of the primary home's value.
In addition to these options, Ditech also provides special financing programs such as HARP with expanded loan-to-value limits for qualified applicants. The company also accepts down payment assistance programs and gift funds from family.
Ditech has had a tumultuous history, with the company filing for bankruptcy twice in recent years. In 2019, the company's forward mortgage servicing and originations business, Ditech Financial LLC, was acquired by New Residential Investment Corp.
Regarding Assurant Insurance, Assurant Inc. is a global provider of risk management solutions with a focus on the housing and lifestyle markets. In 2017, Assurant acquired Green Tree Insurance Agency, Inc., which was affiliated with Ditech Financial Services through its parent company, Walter Investment Management Co. This acquisition allowed Assurant to retain its existing book of voluntary insurance for home mortgage borrowers serviced by Ditech Financial Services and to write additional business for Ditech borrowers.
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Ditech's history and rebranding
Ditech Financial LLC, formerly known as "ditech Mortgage" and "Green Tree Servicing", was a provider of home loans, loan servicing, and refinancing services in the United States. The company was founded in 1995 by John Paul Reddam as Ditech Funding Corporation in Costa Mesa, California. The name "Ditech" was derived from the phrase "direct technology", reflecting the company's innovative approach to offering mortgages online and via a toll-free number.
Ditech experienced rapid expansion in its early years, operating in seven states by the end of 1995 and expanding to 46 states by the end of 1996. This growth was fuelled by an aggressive marketing campaign, including a popular television commercial that featured a frustrated loan officer muttering, "Lost another loan to Ditech." The company became a household name and was acquired by GMAC (now Ally Financial) in 1999. GMAC Mortgage renamed the company "ditech.com".
In 2005, Ditech became a business unit of Residential Capital, LLC (ResCap), a subsidiary of General Motors Corporation. During this period, Ditech introduced 125% loans, allowing borrowers to take out mortgage loans that exceeded the value of the properties. However, Ditech's operations were impacted by the subprime mortgage crisis in the late 2000s, causing the brand to effectively disappear from the marketplace for five years.
In 2012, during the mortgage crisis, Ally Financial (formerly GMAC) took its residential lending unit into bankruptcy to repay bailout funds received from the U.S. Treasury. Ditech was formed from the assets of the GMAC ResCap estate during the bankruptcy proceedings in November 2012. Subsequently, in March 2013, Ditech was acquired by Walter Investment Management Co., and began using the name of Walter's Green Tree Servicing subsidiary for loan origination.
In May 2014, Ditech announced its re-entry into the national housing market and initiated a co-branding and joint-venture initiative with over 600 institutional partners. This marked the return of the Ditech name, and the company resumed originating loans under the Ditech brand. In March 2015, Ditech and Walter Investment affiliate Green Tree Servicing announced their plan to undergo a co-branding effort, becoming "Ditech Financial, A Walter Company." This transition was completed in the second half of 2015, bringing together Walter's origination and servicing entities under the Ditech brand.
Despite its resurgence, Ditech continued to face financial challenges, and in June 2022, the Bankruptcy Court issued an order governing the distribution of any unclaimed borrower funds remaining in the Ditech estate.
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Assurant's business and services
Assurant, formerly known as Fortis Inc., is a global provider of risk management products and services. The company is headquartered in Atlanta and operates in 16 countries. Assurant's main business segments are Global Housing and Global Lifestyle, offering a diverse range of specialty insurance products and services.
In the Global Housing segment, Assurant provides lender-placed insurance, multi-family housing, and mortgage services. The company has acquired Green Tree Insurance Agency, which services home mortgage borrowers, including those from Ditech Financial Services. Assurant also offers voluntary homeowners' and manufactured housing insurance, aiming to protect where consumers live and the goods they buy.
The Global Lifestyle segment offers a range of protection services for mobile devices, consumer electronics, and appliances. This includes extended service contracts and vehicle protection. Assurant is a market leader in these areas, providing innovative and eco-friendly solutions to support businesses and their customers in an increasingly connected world.
In addition, Assurant offers pre-funded funeral insurance, renters insurance, and credit card benefits. The company is committed to sustainability, equity, and giving back to the communities in which it operates. Assurant has been recognized as a great place to work globally and has received accolades for its commitment to serving its employees, customers, communities, and shareholders.
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Frequently asked questions
Yes, Assurant Inc. acquired Green Tree Insurance Agency, a subsidiary of Walter Investment Management, which is the parent company of Ditech.
Assurant acquired the mortgage servicing rights of Green Tree Insurance Agency, which was a subsidiary of Walter Investment Management, the parent company of Ditech. Assurant retained its existing book of voluntary insurance for home mortgage borrowers whose loans are serviced by Ditech.
Assurant, Inc. is a global provider of risk management solutions, with a focus on the housing and lifestyle markets. It is among the market leaders in mobile device protection, extended service contracts, vehicle protection, and mortgage valuation services.
Ditech is a mortgage lender that offers various mortgage options, including fixed-rate, adjustable-rate, FHA, and VA loans. The company was founded in California in 1995 and has since changed ownership and location.
