DiTech Funding Announces New 125 Percent First Mortgage; Irvine-Based Company Offers Exclusive New Home Mortgage Product

Business Wire, Oct 6, 1997

IRVINE, Calif.--(BUSINESS WIRE)--Oct. 6, 1997--As the real estate market in Orange COunty and throughout California continues to improve, the fast-growing mortgage company DiTech Funding has announced its exclusive offering of all-new, 125 percent first mortgages for qualified buyers.

The company, known for its innovative lending products and direct-to-consumer approach, is making the new mortgage available to qualified buyers effective immediately.

"We think this product is exactly right for current market conditions and the continued strengthening we expect for the foreseeable future," said Paul Reddam, president and chief executive officer of DiTech. "This new product is tailored specifically for home buyers who have good credit standing, want to buy a home with no money out of pocket, and ultimately end up with additional cash for other uses after the purchase."

Reddam said there were three main market segments that will benefit most from this new mortgage. The first is current home owners who find it difficult to sell before purchasing another home, because the value of their home has declined the past several years, and to sell would mean coming up with cash to close the deal.

In this case, the extra 25 percent of the mortgage for the purchase of a new home could provide the difference, allowing those home owners to sell without a cash penalty.

A second major segment of the home-buying public that will benefit from this new product is the younger professional, who may be paying off student loans, credit cards or other debt, and thus has difficulty saving for a down payment.

With a 125 percent first mortgage, a buyer in this situation would find it easier to qualify by being able to pay off his or her debt. He or she could then begin reaping the tax and value-appreciation benefits of home ownership.

Another segment of the home-buying public that would benefit from this new first mortgage is a buyer who wanted to occupy a home for the purpose of improving and selling the home later at a profit. This person could improve the home with no out-of-pocket dollars to create added value. With that added value, plus normal appreciation, the home could then be sold at a significant profit in a relatively short period of time.

The 125 percent first mortgage is available for single-family detached homes only, although a similar 110 percent mortgage will be available for attached PUDs (Private Unit Developments) and condominiums.

Initially the 125 percent first mortgage will be offered at a 7.95 percent adjustable rate (11.59 percent APR), although borrowers can also structure a fixed-rate mortgage if desired.

There is no negative amortization and no PMI fees with this new mortgage.

For further information on the new 125 percent first mortgage offered exclusively by DiTech Funding Corp., consumers are invited to call 800/71-FIXED (800/713-4933). DiTech funding is an Equal Housing lender.

CONTACT: Cooper & Vochelli Inc., Los Angeles

David Cooper, 310/470-2855