Servicing Advance Liabilities

Servicing advance liabilities, which are carried at amortized cost, consist of the following (in thousands):



	Successor		Predecessor
	December 31, 2018		December 31, 2017
Servicing Advance Facilities	$	218,291	$	421,165
Early Advance Reimbursement Agreement	—		62,297
Total servicing advance liabilities	$	218,291	$	483,462

The Company's subsidiaries have servicing advance facilities, which are used to fund certain servicer and protective advances that are the responsibility of the Company under certain servicing agreements. Payments on the amounts due under these agreements are paid from certain proceeds received by the subsidiaries (i) in connection with the liquidation of mortgaged properties, (ii) from repayments received from mortgagors, (iii) from reimbursements received from the owners of the mortgage loans, such as Fannie Mae, Freddie Mac and private label securitization trusts, or (iv) issuance of new notes or other refinancing transactions. Accordingly, repayment of the servicing advance liabilities is dependent on the proceeds that are received on the underlying advances associated with the agreements.

On February 12, 2018, the WIMC Securities Master Repurchase Agreement, which was part of the WIMC DIP Warehouse Facilities and provided financing for advances during the WIMC Chapter 11 Case, was repaid with proceeds from the issuance of variable funding notes under two new servicing advance facilities, the DAAT Facility and DPAT II Facility. The DAAT Facility and DPAT II Facility acquired the outstanding advances from the GTAAFT Facility and DPAT Facility, respectively, and the variable funding notes under the GTAAFT Facility and DPAT Facility, which had been pledged as collateral under the WIMC Securities Master Repurchase Agreement, were fully redeemed. At December 31, 2018, the DAAT Facility and DPAT II Facility have aggregate capacities of $465.0 million and $85.0 million, respectively. The interest on the variable funding notes issued under the DAAT Facility and DPAT II Facility is based on the lender's applicable index, plus a per annum margin of 2.25%. These facilities, together with the WIMC Ditech Financial Exit Master Repurchase Agreement used to fund originations and the WIMC RMS Exit Master Repurchase Agreement used to finance the repurchases of certain HECMs and real estate owned from Ginnie Mae securitization pools, are subject, collectively, to a combined maximum outstanding amount of $1.9 billion under the WIMC Exit Warehouse Facilities. The facilities had a weighted-average stated interest rate of 5.40% and 4.61% at December 31, 2018 and 2017, respectively.

As discussed further in Note 31, in February 2019, the existing variable funding notes issued under the DAAT Facility and DPAT II Facility were repaid and refinanced with variable funding notes issued in connection with the DHCP DIP Warehouse Facilities. Otherwise, the DAAT Facility and DPAT II Facility remain largely intact to finance advances.

In April 2018, the Company entered into an acknowledgment agreement with Fannie Mae, whereupon the Early Advance Reimbursement Agreement was terminated. The Company fully repaid the outstanding balance on the Early Advance Reimbursement Agreement upon termination, and the advances were pledged as collateral on the DAAT Facility.

In connection with the DAAT Facility and DPAT II Facility, Ditech Financial sells and/or contributes the rights to reimbursement for servicer and protective advances to a depositor entity, which then sells and/or contributes such rights to reimbursement to an issuer entity. Each of the issuer and the depositor entities under these facilities is structured as a bankruptcy remote special purpose entity and is the sole owner of its respective assets. Advances made under the DAAT Facility and DPAT II Facility are held in two separate trusts: the existing DAAT, used to hold GSE advances, and DPAT II, used to hold non-GSE advances. These facilities provide funding for servicer and protective advances made in connection with Ditech Financial's servicing of certain Fannie Mae, Freddie Mac and other mortgage loans, and is non-recourse to the Company.

The original series of variable funding notes issued in connection with the DAAT Facility and DPAT II Facility contain customary events of default and covenants, including financial covenants. Financial covenants most sensitive to the Company's operating results and financial position are the requirements that Ditech Financial maintain minimum tangible net worth, indebtedness to tangible net worth, liquidity and profitability. The indenture supplements of the original series of variable funding notes under the DAAT Facility and DPAT II Facility were amended throughout 2018 to, amongst other things, reduce the minimum liquidity and profitability requirements for certain periods in the remaining term of each agreement. Ditech Financial was not in compliance with the quarterly profitability covenant included in the original indenture supplements of the DAAT Facility and the DPAT II Facility for the quarter ended December 31, 2018. However, on February 14, 2019 the original series of variable funding notes were repaid and refinanced with new series of variable funding notes issued under new indenture supplements in connection with the DHCP DIP Warehouse Facilities, and as such it was not necessary to seek any additional amendment or waivers related to the profitability requirement. Refer to Note 31 for further information on the DHCP DIP Warehouse Facilities.