Green Tree Servicing is merging with Ditech Mortgage Corp., the companies recently announced.
The merger is expected take place on Aug. 31.
Both companies are owned by Walter Investment Management Corp. Ditech was acquired by Walter Investment Management from Ally Financial, formerly GMAC-ResCap, in March 2013. Following the acquisition, Ditech operated under the name Green Tree Servicing for regulatory and licensing reasons. DT Holdings, Ditech's parent company, is a subsidiary of Walter Investment Management. In March 2014, the company resumed originating loans using the Ditech name.
According to Green Tree's announcement, the full legal name of the merged company will be Ditech Financial LLC.
Walter Investment Management first announced the merger in February.
‘By consolidating our Green Tree and Ditech brands under [one name] and enhancing focus on the use of technology, we will drive efficiencies through the reduction of duplicative functions and cost structures and become a stronger, more unified end-to-end mortgage company,’ Mark J. O'Brien, chairman and CEO of Walter Investment Management, said in a statement as part of the company's fourth quarter 2014 earnings report. ‘As a diversified mortgage operation consolidated under one name, we will be well positioned to take advantage of sector opportunities and leverage our core capabilities to provide high-quality service to our consumers and clients and deliver value to our shareholders.’
Walter Investment says it expects to realize significant cost savings by combining the two companies' operations.
Green Tree made news in April when the Consumer Financial Protection Bureau (CFPB) and the Federal Trade Commission ordered the company to pay $48 million in borrower restitution and $15 million in penalties to settle allegations of servicing failures that occurred from 2010 to 2014.
Specifically, the regulators alleged that Green Tree failed to honor modifications for loans transferred from other servicers, demanded payments before providing loss mitigation options, delayed decisions on short sales, and harassed and threatened overdue borrowers.
Just a month earlier, in March, it was announced that Green Tree was acquiring a portfolio of residential mortgage servicing rights consisting of about 55,500 loans from Ocwen Corp.
The loans, owned by Freddie Mac, had a total principal balance of approximately $9.6 billion.