Ditech Mortgage Is Back: Party Like It’s 1995

May 22, 2014 2 Comments »
Ditech Mortgage Is Back: Party Like It’s 1995

Soon you might be seeing advertisements from a brand new mortgage lender. Or rather, one that used to be a huge player, which subsequently disappeared and then rose from the ashes.

I’m referring to Ditech Mortgage Corp., known affectionately as “ditech.” Yep, they’re back, just in time to take part in the weakest origination year since 2000.

For the record, their name was formed by combining “Direct” and “Technology,” and it’s lowercase because they are smaller than their uppercase Customers.

Now a little history – the company was established back in 1995, based out of Costa Mesa, California where it ran somewhat successfully until it was eventually shuttered in 2010.

Back in the 90s, you may recall the wacky commercials that featured the famous tagline uttered by a dismayed loan officer: “Lost another loan to ditech!”

Since then, a lot has changed, namely the ownership of the company. They were purchased by GMAC Mortgage in 1998, and then acquired by Cerberus Capital Management, before later being purchased by Walter Investment Management Company in 2013.

Return of the ditech

Last week, the company announced that it was back in the mortgage game. It just couldn’t stay away, no matter how hard it tried.

However, now they’re headquartered in Fort Washington, Pennsylvania (where sister company Green Tree Originations is also located), with aspirations to take over the mortgage world once more.

Their approach is three-pronged:

  • Direct-to-consumer lending via their website and 1-800-number
  • Retail lending via roughly 200 loan specialists nationwide
  • Correspondent lending with 600+ partners

In other words, you’ll be able to get a loan with them directly over the phone or on their website, in person with a loan specialist, or via other lenders that resell their loan products through the correspondent channel.

As far as loan offerings, you’ll be able to get an ARM, a fixed-rate loan, an FHA loan, or even a jumbo loan.

In the fixed mortgage department, you can get either a 30-year fixed or a 15-year fixed. They’re currently advertising 30-year fixed mortgages at 4.125% (4.188% APR) and 15-year fixed mortgages at 3.125% (3.234% APR). Click here to compare pros and cons.

They even claim to offer 8-year fixed mortgages if traditional isn’t your thing, along with other terms in between, similar to the YOURgage.

ARMs come in three flavors, including 5/1, 7/1, and 10/1, all of which are hybrids. They’re currently advertising a 5/1 ARM at 2.75% (2.798% APR).

They also offer FHA loans, HARP loans, and jumbo mortgages with loan amounts of up to $3 million ($1.2 million for first-time home buyers).

And they’re currently advertising a rate of 4.00% (4.062% APR) for a jumbo 30-year fixed. By the way, these rates require 720 credit scores and low LTV ratios like 60-75% max.

What Makes ditech Different?

Aside from their lowercase name, they’ve got a few unique qualities. For one, they are an established brand with a lot of support behind them, so they can originate loans with few agency overlays.

That means you’ll be able to take advantage of more aggressive and flexible underwriting guidelines that offer banks and lenders might not be willing to offer.

They also offer the Fannie Mae MyCommunityMortgage®, the FHA’s $100 down payment loan program, expanded lender-paid mortgage insurance, and the “Freddie Only” program, which allows them to accept LP (Loan Prospector) findings.

As far as the 125% loans go, it might be a while before they reintroduce those again…

If you happen to be a correspondent lender, you’ll have the ability to price, lock and deliver individual loans via the ditech website.

All in all, it looks like what will set them apart is their size/backing/familiar name.  Most people will remember them and that should be enough to give them an edge.

I’d like to see a little bit more technology from them, given it’s in their name, but they’ve made no mention of being able to submit documents online and/or track the status of a loan online. That would be a nice touch.

Lastly, just to get this straight, three major lenders (and many smaller ones) went down during the recent housing crisis, including Countrywide, IndyMac, and GMAC.

Today, they’ve morphed into Bank of America/PennyMac, OneWest Bank, and ditech, respectively.  It’ll be interesting to see what they become this time around as the mortgage market continues to reinvent itself.

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2 Comments

  1. Ed Boyd May 23, 2014 at 2:25 pm -

    ditech… trying to figure out this version of ditech? The old ditech was part of GMAC in Fort Washington, PA. This version of ditech doesn’t mention GMAC but the address is Fort Washington PA also. However, when I checked the WA State NMLS recording one of its’ legal names is Security One!? …the reverse mortgage company. Then there is Greentree Mortgage, who is also associated with the Fort Washington people. These are all active companies but Security One is the real surprise.

  2. Colin Robertson May 23, 2014 at 5:36 pm -

    Ed,

    Walter Investment Management Corp. is the parent company of ditech now (and Green Tree) and they acquired Security One Lending back in early 2013, per their investor relations website. They’ve been busy!

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