The financial woes of Reverse Mortgage Solutions (RMS)’ parent company, Ditech Holding Corporation, continue. A filing with the Minnesota state Department of Employment and Economic Development, reveals that the company is closing its St. Paul, Minn. facility, and laying off the facility’s 210 employees.
The closure is planned to take place at the end of May, according to a letter dated March 29 from Senior Vice President and Chief Human Resources Officer Elizabeth Monahan to the city of St. Paul, Ramsey County and the Minnesota Department of Employment and Economic Development, according to Twin Cities Pioneer Press.
“Management has now determined that it is in the best interest of the company to close the St. Paul facility on or before May 31,” the letter reads. “The planned job losses are permanent and the planned site closure is permanent.”
RMD reached out to representatives of RMS to inquire about any possible impact the closure could have on RMS’ operations. “This action will have no impact on our reverse mortgage business,” said a company spokesperson.
On the heels of its most recent bankruptcy filing in February, the bankruptcy court presiding over Ditech’s second bout of Chapter 11 approved an order for the company’s debtor-in-possession (DIP) facilities, allowing Ditech and some of its subsidiaries to gain access to up to $1.9 billion in available financing. Among those subsidiaries is RMS.
RMS assured its customers that it will continue operations while bankruptcy proceedings are taking place. “The restructuring process has not changed your reverse mortgage, and should not change the scheduled or unscheduled draw process,” RMS said in a letter to customers.
All these events follow a continually unfolding odyssey of financial problems for Ditech, which was delisted from the New York Stock Exchange (NYSE) following warnings that stemmed from its failure to meet the NYSE listing standard in 2018 following its first bankruptcy filing earlier that year.
In January, Ditech stated that it elected not to make an approximately $9 million cash interest payment to its creditors in December 2018, putting the company at risk of default.
