The Ditech Sleep EZ Loan

June 12, 2007 No Comments »

Ditech, a home financing arm of GMAC, has announced the release of a new conforming mortgage product named the “Sleep EZ Loan”.

At first glance, it didn’t seem to be a very compelling loan program, though there were a few noteworthy points that could be taken from the unveiling.

The Sleep EZ Loan is a pretty straightforward loan program; a 30-year fixed mortgage with a 10-year interest-only option.

To qualify for the program, you need a credit score of 731 or greater, full income documentation, and the property must be an owner-occupied, single-family residence.

Translation: The loan must be 100% vanilla to secure the 5.75% interest rate with a two-point loan origination fee advertised on the Ditech site.

While the mortgage rate is relatively low, the loan scenario is also seemingly perfect, meaning you could probably shop around and find an even lower rate just about anywhere.

The introduction of a very conservative loan program like this is also a sign of the times, as banks and mortgage lenders steer borrowers away from high-risk loans that caused the mortgage crisis to begin with.

To that effect, Ditech highlights the loan program by clearly stating that the loan has “no negative amortization”, which shows us where the market is heading, and also how much borrowers know about mortgages these days.

Perhaps all those nasty option-arm loan programs taught borrowers a thing or two about the unforgiving math behind loan amortization.

Leave A Response