Exhibit 10.1

 

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Sent via email

January 17, 2018

New Residential Mortgage LLC

1345 Avenue of the Americas, 45th Floor

New York, New York 10105

 

  Re: Assignment Agreement for Mortgage Loans, to be dated on or about
January 17, 2018, by and between Ditech Financial LLC, as Seller, and New
Residential Mortgage LLC, as Purchaser

Ladies and Gentlemen:

Reference is hereby made to (i) that Flow and Bulk Agreement for the Purchase
and Sale of Mortgage Servicing Rights dated as of August 8, 2016, (as amended
through the date hereof, the “Agreement”), by and between Ditech Financial LLC,
as the seller (herein, the “Seller” or “Ditech”), and New Residential Mortgage
LLC, as the purchaser (the “Purchaser”), (ii) that Subservicing Agreement dated
as of August 8, 2016 (as amended through the date hereof, the “Subservicing
Agreement”), by and between New Residential Mortgage LLC, as the Owner/Servicer,
and Ditech Financial LLC, as the subservicer and (iii) Assignment Agreement for
Mortgage Loans to be dated on or about January 17, 2018 (the “Assignment
Agreement” together with the Agreement and the Subservicing Agreement, the
“Operative Documents”), by and between Seller and Purchaser. Capitalized terms
used herein but not defined shall have the meaning ascribed in the Agreement.

Pursuant to the terms of the Agreement and this letter (the “Letter”), the
parties have agreed that on the Sale Date the parties will enter into the
Assignment Agreement and that the Purchaser will purchase Servicing Rights,
Advances, Custodial Funds and Mortgage Files with respect to certain Subject
Loans described in the Assignment Agreement. In order to facilitate the closing
of the sale contemplated by the Assignment Agreement, pursuant to the terms of
this Letter the parties hereby agree as follows:

 

1. Each of Seller and Purchaser hereby acknowledges that certain events
described on Annex A hereto (such events, the “Identified Events”) have
occurred, or are expected to occur, and that such events (a) may have caused, or
in the future may cause, various defaults or breaches of covenants,
representations or warranties (as further set forth on Annex A after each
Identified Event) or similar non-compliance by Seller under the Operative
Documents, and/or (b) may have triggered certain termination rights (the
“Termination Rights”) for Purchaser under the Operative Documents.

 

 

 

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New Residential Mortgage LLC

(Flow Side Letter)

January 17, 2018

Page 2

 

2. Except with respect to the Identified Events, (a) all of the terms, covenants
and obligations of the Agreement required to be complied with and performed by
Seller on or prior to the date hereof have been duly complied with in all
material respects and (b) all conditions precedent set forth in Article VII and
Article VIII of the Agreement with respect to such Sale Date shall have been
complied with by Seller.

 

3. With respect to only the transactions contemplated by the Assignment
Agreement and the related Subject Loans, and for any Subsequent Flow Assignment
Agreement (as defined below) and the subject mortgage loans thereunder (the
“Subsequent Flow Loans”), any actual, potential or future default under, breach
of or similar non-compliance by Seller or its affiliates with Sections 5.3(c)
(but only with respect to the leverage ratio metric set forth in the Quarterly
Financial Metrics Report), 5.3(e), 5.3(f), 5.3(g), 5.3(i), 5.3(r), 5.3(s),
5.3(z) and 5.3(aa) of the Subservicing Agreement (and any corresponding default
under Article VII and Article VIII of the Agreement) that is caused by (or,
solely with respect to a termination event under Section 5.3(aa) of the
Subservicing Agreement, primarily related to) one or more Identified Events, and
any Termination Rights (but only to the extent arising out of the Identified
Events and only as applied to the Assignment Agreement and related Subject Loans
or any Subsequent Flow Assignment Agreement and related Subsequent Flow Loans,
as the case may be) for Purchaser triggered thereby, in each case are hereby
irrevocably waived by the Purchaser and shall not to apply to (a) the Assignment
Agreement and the related Subject Loans or (b) any such Subsequent Flow
Assignment Agreement and the Subsequent Flow Loans.

 

4. With respect to only the Subject Loans and the Assignment Agreement, and with
respect to any subsequent Assignment Agreement for Mortgage Loans for any “flow”
type transaction under the Agreement (and the Subsequent Flow Loans thereunder)
entered into by Seller and Purchaser following the date hereof that is subject
to the Agreement (each such subsequent flow agreement, a “Subsequent Flow
Assignment Agreement”), the Purchaser and Seller hereby agree that the
Subservicing Agreement shall be amended, effective as of the date hereof, such
that: (a) the definition of “Subservicer’s Initial Term” in Section 5.1(a) of
the Subservicing Agreement and the definition of “Owner/Servicer’s Initial Term”
in Section 5.1(b) of the Subservicing Agreement shall mean the one-year term
that begins on the date of this Assignment Agreement or the applicable
Subsequent Flow Assignment Agreement and ends on the date that is the first
(1st) anniversary of the date of this Assignment Agreement and for any
applicable Subsequent Flow Assignment Agreement the beginning of the calendar
quarter that is one year after the end of the quarter during which such
Subsequent Flow Assignment Agreement was executed; (b) following the
Owner/Servicer’s Initial Term, the successive renewal periods provided for under
Section 5.1(c) of the Subservicing Agreement shall be three months in length,
rather than one-month in length; and (c) Financial Metric Item B.i. and B.ii.,
and the definition of “Consolidated Liquidity”, in each case as set forth in
Exhibit H – Form of Quarterly Financial Metrics Report, which is attached to the
Subservicing Agreement, shall each be amended to read, in their entirety, as set
forth on Annex B hereto.

 

 

 

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New Residential Mortgage LLC

(Flow Side Letter)

January 17, 2018

Page 3

 

5. Seller hereby acknowledges that (i) the Identified Events listed as items I,
II (other than any events contemplated by the Plan (as defined in Annex A) that
have not yet occurred) III and IV in Annex A (the “Existing Events”) hereto have
occurred, and (ii) pursuant to Section 9.8 of the Subservicing Agreement,
(A) the waiver by Purchaser of any failure by Seller to comply with any
obligation, covenant, agreement or condition contained in the Subservicing
Agreement, (B) the failure or delay of Purchaser to insist upon Seller’s strict
compliance with such obligation, covenant, agreement or condition and (C) any
waiver, failure or delay in exercising any right, power or privilege hereunder
or any single or partial exercise thererof shall not operate as a waiver of, or
estoppel with respect to, any subsequent or other failure of compliance or
preclude any other exercise thereof or any other right, power, or privilege
thereunder, in each case other than the Termination Rights (but only to the
extent arising out of the Identified Events and only as applied to the
Assignment Agreement and related Subject Loans or any Subsequent Flow Assignment
Agreement and related Subsequent Flow Loans, as the case may be)specifically
waived pursuant to the terms of this Letter.

 

6. Seller hereby acknowledges that, although Purchaser has not yet elected to
exercise any rights or remedies with respect to the Existing Events, Purchaser
has not waived any rights to exercise its remedies under the Subservicing
Agreement, except as expressly set forth herein. Except as expressly set forth
herein, Purchaser hereby expressly reserves all of its respective rights and
remedies under the Subservicing Agreement, including but not limited to those
rights and remedies related to any of such Existing Events as applied to any
mortgage loans subserviced under the Subservicing Agreement other than the
Subject Loans or any Subsequent Flow Loans. In no event shall this Letter and
the waivers contained herein be deemed to limit or inhibit Purchaser’s rights in
any way other than as expressly set forth herein, and this Letter shall not be
deemed to operate as a waiver other than as expressly set forth herein.

 

7. Notwithstanding the foregoing, in no event shall this Letter and the waivers
contained herein be deemed to be an admission by Ditech with respect to any
prior transaction entered into under the Agreement or the Subservicing Agreement
nor shall this Letter give rise to any termination rights with respect to such
prior transactions.

 

8. This Letter may be executed simultaneously in any number of counterparts.
Each counterpart shall be deemed to be an original, and all such counterparts
shall constitute one and the same instrument. Telecopy or electronically
transmitted signatures shall be deemed valid and binding to the same extent as
the original.

 

 

 

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New Residential Mortgage LLC

(Flow Side Letter)

January 17, 2018

Page 4

 

DITECH FINANCIAL LLC

By:    /s/ Tim Cranny

Name:    Tim Cranny

Its:    SVP

 

ACKNOWLEDGED AND AGREED:

 

NEW RESIDENTIAL MORTGAGE LLC

By:    /s/ Nicola Santoro, Jr.

Name:    Nicola Santoro, Jr.

Its:   

Chief Financial Officer

and Chief Operating Officer

 

 

 

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New Residential Mortgage LLC

(Flow Side Letter)

January 17, 2018

Page 5

 

Annex A

 

  I. As of the date of this Letter, WIMC has filed with the Securities and
Exchange Commission, and Ditech has prepared, certain audited annual and
unaudited quarterly financial statements and related notes, opinions and
conclusions that were qualified or limited by reference to the status of WIMC or
Seller, as applicable, as a “going concern” and references of similar import.
Such periods include year-end financials for the year ended December 31, 2016
and quarterly financials for the quarterly periods ended June 30, 2016,
September 30, 2016, March 31, 2017, June 30, 2017 and September 30, 2017.

-Subservicing Agreement Sections 5.3(e), 5.3(i), 5.3(r), 5.3(s) and 5.3(aa)

-MSRPA Sections 6.09, 7.02, 7.17, 8.04, 10.01, 10.02(a)(iii) and Article IX

 

 II. On November 30, 2017, WIMC filed a voluntary petition (the “Bankruptcy
Petition,” and the case commenced thereby, the “Chapter 11 Case”) under chapter
11 of title 11 of the United States Code in the United States Bankruptcy Court
for the Southern District of New York as part of its plan to implement its
balance sheet restructuring as contemplated under the “Prepackaged Chapter 11
Plan of Reorganization of Walter Investment Management Corp. and Affiliate
Co-Plan Proponents,” dated November 6, 2017 (the “Plan”). For the avoidance of
doubt, the “Plan” as referenced in this Annex A shall mean the Plan as it exists
in form and substance as of the date hereof and currently on file in the Chapter
11 Case, together with any immaterial or procedural amendments that may become
effective hereafter.

The Plan contemplates various transactions and events to occur. The Purchaser
acknowledges that any transaction or event that is contemplated by the Plan that
has occurred or that is expected to occur in the future shall be considered an
Identified Event for purposes of this Letter, even if not specifically
referenced on this Annex A.

-Subservicing Agreement Sections 5.3(e), 5.3(f), 5.3(g), 5.3(i), 5.3(r), 5.3(z)
and 5.3(aa)

-MSRPA Sections 6.09, 7.02, 7.17, 8.04, 10.01, 10.02(a)(iii), 10.02(a)(iv),
10.02(a)(vi), 10.02(a)(x) and Article IX

 

III. As a result of the Bankruptcy Petition, certain liquidity and insolvency
covenants and conditions precedent noted in the Letter may have been triggered.

-Subservicing Agreement Sections 5.3(e), 5.3(f), 5.3(g), 5.3(i), 5.3(r), 5.3(s),
5.3(z) and 5.3(aa)

-MSRPA Sections 6.09, 7.02, 7.17, 8.04, 10.01, 10.02(a)(iii) and Article IX

 

 

 

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New Residential Mortgage LLC

(Flow Side Letter)

January 17, 2018

Page 6

 

IV. As a result of the restatement of certain of WIMC’s historical financial
statements, the Bankruptcy Petition and certain actions taken by WIMC under or
in connection with the Plan, WIMC and Seller may have been in default under the
terms of certain of their repurchase agreements, loan and security agreements or
similar credit facilities or agreements for borrowed funds, and certain WIMC and
Seller lenders and other counterparties may have been entitled to cause the
acceleration or prepayment of such borrowed funds (other than those lenders
holding term loans under WIMC’s Amended and Restated Credit Agreement dated as
of December 19, 2013, certain holders of the Company’s 7.875% Senior Unsecured
Notes due 2021 and holders of the Company’s outstanding 4.50% Convertible Senior
Subordinated Notes due 2019 who voted to approve the Plan).

-Subservicing Agreement Sections 5.3(e), 5.3(r) and 5.3(aa)

-MSRPA Sections 6.09, 7.02, 7.17, 8.04, 10.01, 10.02(a)(iii) and Article IX

 

 V. As part of the transactions contemplated in the Chapter 11 Case and the Plan
(as defined above), the parties anticipate that a “Change of Control” as defined
in the Subservicing Agreement will occur.

-Subservicing Agreement Sections 5.3(z) and 5.3(aa)

-MSRPA Sections 6.09, 7.02, 7.17, 8.04, 10.01, 10.02(a)(iii), 10.02(a)(vi),
10.02(a)(x) and Article IX

 

VI. Ditech has informed the Purchaser that as of December 31, 2017 (and for any
future period to the extent applicable) WIMC will likely fail the leverage ratio
requirement set forth in the Form of Quarterly Financial Metrics Report attached
to both the Agreement and the Subservicing Agreement, and therefore will likely
breach any related covenant or trigger any related termination right of
Purchaser due to such failure.

-Subservicing Agreement Sections 5.3(c) (but only with respect to the leverage
ratio metric set forth in the Quarterly Financial Metrics Report) and 5.3(aa)

-MSRPA Sections 6.08, 6.09, 7.02, 7.17, 8.04, 10.01, 10.02(a)(iii), 10.02(a)(ix)
(but only with respect to the leverage ratio metric set forth in the Quarterly
Financial Metrics Report) and Article IX

 

 

 

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New Residential Mortgage LLC

(Flow Side Letter)

January 17, 2018

Page 7

 

Annex B

Consolidated Liquidity: As to either Walter Investment Management Corp. (“WIMC”)
or Seller, as applicable, unrestricted cash and cash equivalents of WIMC and its
subsidiaries (excluding cash held in a special purpose entity or vehicle and
cash and cash equivalents pertaining to minority interests) on a consolidated
basis and calculated in accordance with GAAP.

 

   i. Consolidated Liquidity, as of the final day of each fiscal quarter,
(a) equal to or in excess of $100 million for WIMC (on a consolidated basis) and
(b) solely with respect to Ditech and its consolidated subsidiaries, an amount
equal to or in excess of the greater of 3.5 basis points multiplied by (i) the
aggregate unpaid principal balance of Mortgage Loans serviced by Ditech under
the Servicing Agreement or (ii) the aggregate unpaid principal balance of all
mortgage loans for which the related servicing is owned by Ditech, provided that
in no event shall the Ditech minimum Consolidated Liquidity requirement for
purposes of this provision be greater than $40 million.

 

  ii. As of each date set forth below, a leverage ratio (calculated as follows:
(a) the aggregate outstanding principal amount of WIMC corporate debt as of such
December 31, less unrestricted cash and cash equivalents (calculated in
accordance with GAAP) as of such date, to (b) Adjusted EBITDA of WIMC on a
consolidated basis for the fiscal ended on such date, in each case as calculated
and set forth in WIMC’s fiscal year-end Form 10-K) equal to or less than the
following:

-December 31, 2018 6.75 : 1

-December 31, 2019 4.75 : 1

-December 31, 2020 and each December 31 thereafter 4.00 : 1;

provided that for December 31, 2018, such ratio shall be calculated and
determined on an annualized basis from the date of the effective date of the
Plan through and including December 31, 2018.

Notwithstanding any provision of the Subservicing Agreement to the contrary,
proof of compliance or non-compliance with the Consolidated Liquidity and
leverage ratio tests set forth above shall not be due to Purchaser until five
(5) Business Days following the date on which the applicable quarterly or annual
periodic report of WIMC is filed with the Securities and Exchange Commission.

 

 

 

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