DiTech Launches Innovative ``One Fee'' Program, Guaranteeing Loan Fees Paid by First Mortgage Customers; Lender, Title and Escrow Fees Will not Change at End of Loan Process

Business Wire, Jan 14, 1999

IRVINE, Calif.--(BUSINESS WIRE)--Jan. 14, 1999--DiTech Funding Corp. has initiated what may be the mortgage lending industry's first guaranteed loan fee program.

DiTech's "One Fee" Program is available to all new first mortgage customers and wraps together all lender, title and escrow fees for the borrower. The fee is guaranteed not to change at the end of the loan process.

Typically, loan fees are estimated by lenders at the beginning of the loan process, when borrowers are presented with a long list of additional costs such as appraisal fees, credit report fees, underwriting fees, and processing fees, among many others. At loan closing, the "actual" fees are confirmed and can be higher than original estimates, creating an unknown financial variable for borrowers.

DiTech's "One Fee" streamlines the process, eliminating the "laundry list" of charges and taking the guesswork out of projecting loan costs.

"Our goal with the `One Fee' Program is to take the surprise out of mortgage borrowing," said J. Paul Reddam, DiTech's chief executive officer. "Loan fees often add unexpected out-of-pocket costs to the loan amount paid by borrowers. We believe there is a smart way to secure a mortgage and the `One Fee' Program is a way we can offer a smarter loan product to our customers.

"Customer response to this loan feature has been overwhelmingly positive, so we know we are offering something customers want and need in order to make sound financial plans surrounding the purchase of a home," said Reddam.

The "One Fee" Program amount customers pay is calculated based on a percentage of the loan and their state of residence. The percentage varies by state. The fee is presented to the customer at the beginning of the loan process and is guaranteed not to change at escrow closing. The "One Fee" price is generally lower than the itemized costs borrowers would normally pay once all the costs are revealed at the end of the loan.

"There really is no reason for fees to change dramatically at the end of the loan process," said Reddam. "When fees change, it costs us money to refigure the final costs and creates an irritating situation for the borrower. Using the One Fee approach saves us and our customers time and money. We expect other lenders to follow our lead and begin locking in fee amounts at the beginning of the loan process in order to stay competitive."

DiTech is able to offer this guaranteed fee feature because of efficiencies gained on the volume of loans it originates and its lower-than-industry-average overhead costs. The company originated more than $1.358 billion in new loans in the fourth quarter 1998.

"DiTech customers expect us to offer innovative programs that fit their financial needs and save them money," said Reddam. "We want them to continue to look to us for their mortgage needs, knowing we will always offer them the most cost-effective way to achieve their home-ownership goals."

DiTech Funding, with headquarters in Irvine and founded in 1995, is a specialty finance company engaged in the business of marketing, directly originating, selling and servicing mortgage loans. Marketing directly to consumers, and leveraging efficiencies provided by its internal technological capabilities, DiTech targets high credit quality borrowers by offering loans at competitive interest rates.

For more information on DiTech's mortgage loan programs, consumers should call 800/71-FIXED, or visit the company's Web site at www.ditechfunding.com.