As previously disclosed, the Board of Directors (the “Board”) of Ditech Holding Corporation (the “Company”) elected not to make the approximately $9 million cash interest payment (the “Interest Payment”) due and payable on December 17, 2018 with respect to the Company’s outstanding 9.0% Second Lien Senior Subordinated PIK Toggle Notes due 2024 (the “Second Lien Notes”) issued under the indenture governing the Second Lien Notes (the “Indenture”). The Company had sufficient liquidity on December 17, 2018 to make the Interest Payment. However, the Board elected not to make the Interest Payment as active discussions continue with certain of the Company’s creditors and other parties in interest regarding the Company’s previously announced evaluation of strategic alternatives.

The Company’s failure to make the Interest Payment within thirty days after it was due and payable constitutes an “event of default” under the Indenture. As active discussions are still ongoing regarding the Company’s evaluation of strategic alternatives, the Board determined that the Company would not make the Interest Payment prior to the expiration of the thirty day grace period even though it had sufficient liquidity to do so as of January 16, 2019, resulting in an event of default under the Indenture. An event of default under the Indenture also constitutes an “event of default” under the Company’s Second Amended and Restated Credit Agreement, dated as of February 9, 2018 (as amended, the “Credit Agreement”) and certain of the Company’s warehouse facility agreements (the “Warehouse Facility Agreements”).

On January 16, 2019, the Company and, as applicable, certain of its subsidiaries, entered into forbearance agreements (each a “Forbearance Agreement” and collectively the “Forbearance Agreements”) with (i) certain holders of greater than 75% of the aggregate principal amount of the outstanding Second Lien Notes (collectively, the “2L Holders”), (ii) certain lenders holding greater than 50% of the sum of (a) the loans outstanding, (b) letter of credit exposure and (c) unused Commitments under the Credit Agreement at such time and the administrative agent and collateral agent under the Credit Agreement (collectively, the “Credit Agreement Forbearing Parties”) and (iii) the requisite buyers and variable funding noteholders, as applicable, under the Warehouse Facility Agreements (collectively, the “Warehouse Lenders”).

Pursuant to the Forbearance Agreements, subject to certain terms and conditions, the 2L Holders, Credit Agreement Forbearing Parties and Warehouse Lenders have agreed to temporarily forbear from the exercise of any rights or remedies they may have in respect of the aforementioned events of default or other defaults or events of default arising out of or in connection therewith. The Forbearance Agreements terminate on February 8, 2019, unless certain specified circumstances cause an earlier termination.

The above descriptions of the terms of the Forbearance Agreements do not purport to be complete and are qualified in their entirety by the full text of the Forbearance Agreements, which are attached as exhibits hereto and are incorporated herein by reference.