Ditech
Encyclopedia
Ditech, based in Costa Mesa, California
, was a lender, offering mortgages and lines of credit as a member of Ally Financial, specifically GMAC ResCap (GMAC) which purchased Ditech from its private owner in 1999. The company's name is a portmanteau derived from the phrase Direct Technology.
In late 2006, a controlling interest(51%) of GMAC was acquired by private equity outfit Cerberus Capital Management
. As of 2008, Ditech is part of Residential Capital, LLC (also known as "ResCap") which includes ditech and several GMAC-branded lending businesses. Ditech opened in 1995 and is based in Costa Mesa, Orange County, California; several significant firms in the mortgage lending and mortgage brokerage industry are based in Orange County.
shouting the catch phrase "Lost another loan to Ditech!" In May, 2007, the company introduced a new marketing campaign, adding the tagline "People Are Smart" and including the signature line Home financing by GMAC to further help separate and elevate the Ditech brand from other direct-to-consumer lenders of questionable repute. Ditech had immensely high unaided brand awareness and customer satisfaction, but among those were too many people who thought Ditech was a sub-prime lender.
Along with the new tagline and distinctive, new illustration-based TV campaign, Ditech also introduced, for the first time, a menu of branded products. These products included the "Sleep EZ Loan" (a fixed rate mortgage that gives borrowers payment relief by allowing them to pay interest only for the first ten years without any negative amortization
), and "Real Life Plan," (combining a first mortgage, home equity loan, and a credit card that builds points to pay down mortgage principle).
Many holders of these mortgages have defaulted or, unable to repay them, have received interest rate adjustments, creating the possibility of losses among those who in turn lent to Ditech's parent, ResCap. "Owners of some notes issued by ResCap are being asked to trade them in for new bonds with face values of as little as 80 cents on the dollar. Other holders are being offered the chance to sell back bonds to the company, for as little as 65 cents on the dollar."
On February 3, 2010, Ditech closed their Costa Mesa office. Ditech still is in operation out of their Fort Washington, PA office.
parodied the popularity and ubiquity of Ditech's earlier advertising tag. A sketch featuring an impression of US President George W. Bush stated,
On September 11, 2001 during a break on CNN
in the United States, a Ditech commercial was running before being cut midway, to announce that a plane had struck one of the Twin Towers of the World Trade Center
. This would then begin CNN's ongoing live footage of the September 11 attacks.
Costa Mesa, California
Costa Mesa is a city in Orange County, California. The population was 109,960 at the 2010 census. Since its incorporation in 1953, the city has grown from a semi-rural farming community of 16,840 to a primarily suburban and "edge" city with an economy based on retail, commerce, and light...
, was a lender, offering mortgages and lines of credit as a member of Ally Financial, specifically GMAC ResCap (GMAC) which purchased Ditech from its private owner in 1999. The company's name is a portmanteau derived from the phrase Direct Technology.
In late 2006, a controlling interest(51%) of GMAC was acquired by private equity outfit Cerberus Capital Management
Cerberus Capital Management
Cerberus Capital Management, L.P. is one of the largest private equity investment firms in the United States. The firm is based in New York City, and run by -year-old financier Steve Feinberg. Former U.S...
. As of 2008, Ditech is part of Residential Capital, LLC (also known as "ResCap") which includes ditech and several GMAC-branded lending businesses. Ditech opened in 1995 and is based in Costa Mesa, Orange County, California; several significant firms in the mortgage lending and mortgage brokerage industry are based in Orange County.
Advertising
While Ditech is best known to many people for its past commercials featuring a loan officer played by actor Ron MichaelsonRon Michaelson
Ron Michaelson is an actor popular for appearing in commercials for Ditech.com, where he plays a character known as "Ned the Banker." The commercials intend to show that Ned is unable to close a mortgage deal, even with his own mother, because of Ditech's highly competitive rates and services...
shouting the catch phrase "Lost another loan to Ditech!" In May, 2007, the company introduced a new marketing campaign, adding the tagline "People Are Smart" and including the signature line Home financing by GMAC to further help separate and elevate the Ditech brand from other direct-to-consumer lenders of questionable repute. Ditech had immensely high unaided brand awareness and customer satisfaction, but among those were too many people who thought Ditech was a sub-prime lender.
Along with the new tagline and distinctive, new illustration-based TV campaign, Ditech also introduced, for the first time, a menu of branded products. These products included the "Sleep EZ Loan" (a fixed rate mortgage that gives borrowers payment relief by allowing them to pay interest only for the first ten years without any negative amortization
Negative amortization
In finance, negative amortization, also known as NegAm, deferred interest or graduated payment mortgage, occurs whenever the loan payment for any period is less than the interest charged over that period so that the outstanding balance of the loan increases...
), and "Real Life Plan," (combining a first mortgage, home equity loan, and a credit card that builds points to pay down mortgage principle).
Lending
Despite advertising efforts, Ditech's loans and mortgages have been categorized as subprime lending products. Ditech was a pioneer in offering 125 percent loans, in which the borrower could get more than the property was worth. It specialized in low-documentation mortgages, or state income loans where many borrowers falsified their income.Many holders of these mortgages have defaulted or, unable to repay them, have received interest rate adjustments, creating the possibility of losses among those who in turn lent to Ditech's parent, ResCap. "Owners of some notes issued by ResCap are being asked to trade them in for new bonds with face values of as little as 80 cents on the dollar. Other holders are being offered the chance to sell back bonds to the company, for as little as 65 cents on the dollar."
On February 3, 2010, Ditech closed their Costa Mesa office. Ditech still is in operation out of their Fort Washington, PA office.
Popular Media
Saturday Night LiveSaturday Night Live
Saturday Night Live is a live American late-night television sketch comedy and variety show developed by Lorne Michaels and Dick Ebersol. The show premiered on NBC on October 11, 1975, under the original title of NBC's Saturday Night.The show's sketches often parody contemporary American culture...
parodied the popularity and ubiquity of Ditech's earlier advertising tag. A sketch featuring an impression of US President George W. Bush stated,
On September 11, 2001 during a break on CNN
CNN
Cable News Network is a U.S. cable news channel founded in 1980 by Ted Turner. Upon its launch, CNN was the first channel to provide 24-hour television news coverage, and the first all-news television channel in the United States...
in the United States, a Ditech commercial was running before being cut midway, to announce that a plane had struck one of the Twin Towers of the World Trade Center
World Trade Center
The original World Trade Center was a complex with seven buildings featuring landmark twin towers in Lower Manhattan, New York City, United States. The complex opened on April 4, 1973, and was destroyed in 2001 during the September 11 attacks. The site is currently being rebuilt with five new...
. This would then begin CNN's ongoing live footage of the September 11 attacks.