Why Ditech Brought Back a Precrisis Mortgage Brand

  • Everybody out of the pool: Freddie to repurchase all severely delinquent MBS loans. Plus: reports of Ditech's death greatly exaggerated.

    February 10
  • Struggling with their own problems, the mortgage industry's megaservicers are unlikely landing spots for GMAC Inc.'s troubled home loan unit.

    January 4
  • Ditech.com, the direct-to-consumer lending arm of General Motors Corp.'s Residential Capital LLC, has revamped the television commercials that have made it a household name.

    November 14

Before the mortgage crisis, Ditech was a well-known brand among consumers, thanks to humorous television ads, a Nascar sponsorship, and billboards in the Los Angeles area that promoted the current interest rate.

For the past five years, the name has been kept in mothballs, as portions of the lender worked their way through the GMAC-ResCap-Ally Financial mortgage crisis fallout.

Now its management team has dusted off the Ditech name and brought it back into a very different market.

"Believe it or not, the name still has a lot of resonance with consumers," says Rich Smith, Ditech's chief marketing officerh. "We went and did a good deal of brand research just to make sure we weren't making a big mistake."

Ditech was one of the properties Walter Investment Management Co. acquired from Ally in March 2013.

Since the sale to Walter 14 months ago, for regulatory and licensing reasons the unit, currently based in Fort Washington, Pa., has been using the name of Walter's Green Tree subsidiary to originate loans.

During its time operating under the radar, the outfit has been making investments in technology, including a new loan origination system.

In March, the company resumed originating loans using the Ditech name in a couple of its business lines. Now all three of its channels — consumer direct, retail and correspondent — are doing business as Ditech in the 46 states it is licensed in. The original Ditech worked directly with consumers. The brick-and-mortar retail and correspondent businesses had been a part of GMAC/ResCap.

"Even though the brand has been out of the market for about five years, it still has a lot of familiarity with consumers and it's still very positively viewed," Smith says. "We spent a lot of time looking for any negative sentiment, any baggage around the name, and really just couldn't find it amongst consumers."

That might be because the Ditech brand disappeared from the marketplace before the mortgage crisis took hold. As a result, the Ditech brand did not get associated with the crisis and thus people remember the company fondly, Smith says.

"So we looked at it as, we could start with a brand new brand name nobody had ever heard of. Or, we could go back to a new, old brand, so to speak, and relaunch Ditech and take advantage of that history," Smith says.

The correspondent lending team which is now a part of Ditech for the most part has remained intact over the years, even with all of the turmoil at GMAC and ResCap. Not only that, the company has retained the vast majority of its correspondent clients, Smith says.

"The main issue for us in correspondent is introducing everyone to the new brand name. It is making sure they understand it is the still the same team that you've always worked with before and now that we are in a stable situation, we are able to add additional products," he says.

At the recent Mortgage Bankers Association National Secondary Market Conference, Ditech announced some new products and product enhancements for the correspondent channel.

These include offering through this channel Fannie Mae's MyCommunityMortgage program and the Federal Housing Administration products and increasing the availability of lender-paid mortgage insurance n loans sold in this channel.

The new Ditech will not be doing any nonprime mortgages, a product the company was known for.

Nor will it be participating in the wholesale business either; back in February, when the unit was still using the Green Tree brand, it got out of this channel, Smith says. However, the correspondent unit does do business with mini-correspondents, originators who can close in their own name, but have low net worth.

The company is not running away from its past, although it does have "a different approach and a different brand position" from its predecessor.

"We certainly want to embrace the positive things people remember about Ditech and about the old advertising campaigns and the slogans; that resonates with people," Smith says.

Today's postcrisis consumer has a need and desire to understand the mortgage process. "They are not going to just trust you to do it all for them. They want to understand what you are doing. They want to understand the process, they want to understand the product and they want a partner that can help them, that can educate them and keep them informed," Smith says.

So the name is back, but this is not the precrisis Ditech. "It is Ditech 2.0," Smith says.

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