E-Loan
www.eloan.com

To look at the future of mortgage lending, visit E-Loan (Palo Alto, CA), the privately funded brainchild of two California mortgage brokers, Chris Larsen and Janina Pawlowski. Although Larsen and Pawlowski have been running a mortgage brokerage in Palo Alto for six years, the Internet version just launched June 30, 1997 in California. Coverage in 46 more states has been added since. E-Loan received its 1,000th loan application in late October, less than four months after opening its virtual doors.

Main Areas in E-Loan’s Web

•  Search for Rates
•  Recommendations
•  Qualify for a Loan
•  Monitor a Loan
•  Set up a RateWatch
•  Online Resources
•  About E-Loan
•  Lock a Loan (for customers only)

E-Loan’s Web offers a number of devices to engage mortgage shoppers. For instance, in Monitor a Loan, users input a few bits of info about their current mortgage to see if the company can find a better deal from one of the lenders it brokers loans for. E-Loan’s methodology is similar to other refi calculators available online. But what distinguishes E-loan from the others, is that the lender doesn’t leave users hanging after performing the mathematical calculation. E-Loan offers an “apply now” icon whenever they find a money-saving loan program. If it can’t beat the loan today, the company offers a free
e-mail service to let users know when rates dip low enough for a refinance to make economical sense.

E-Loan.com banner on www.moneyclub.com .

We made our first visit to E-Loan after noticing its banner (above) running on Internet Finance Corp.’s MoneyClub Web www.moneyclub.com , a personal finance site unrelated to E-Loan. The online lender is also mentioned in the “other resources” section of Intuit’s new mortgage Web.

E-Loan’s user-friendly headline on its Web page and brand new E*Trade-like logo.

E-Loan does a good job maximizing its search engine appeal. From the title of its Web, “E-Loan - save 80% on fees!” (the title is what appears on search engine listings and as the default name when you save the address as a bookmark), to its extensive use of META tagged keywords (META tags are invisible to the reader, but are picked up by search engines), the Web builders at E-Loan know what they are doing.

We like how E-Loan incorporates its key benefits right into its logo on the top of its first page (see above). They’ve even chosen a type style nearly identical to that of E*Trade, the high-profile pioneer in the online brokerage industry.

E-Loan’s old front page design included a RealAudio recording of a broadcast from c|net radio.

Internet lending start-ups need to remember it’s not enough to have a catchy name, perfect Web address, and good placement on search engines. The companies are still unknown commodities, and consumers are going to be wary, rightly so. That’s why the c|net linkage (screenshot above) is so important. By clicking on the link, users hear a five-minute interview with President Chris Larsen. It’s like a five-minute radio commercial, but much more believable. All-in-all an extremely effective marketing device.

The start-up also included its physical address and state of California license info on the bottom of the first page. But in its latest Web redesign in late October, the c|net linkage has been relegated to the About E-Loan section and the license info has disappeared altogether. We think that is a mistake.

E-Loan’s RateWatch is the best rate update service we’ve seen (see p. 8). Why? It’s really a rate page in disguise. The first thing a user does is enter rate targets for up to three different mortgage types. In the example below, we indicated an interest in a 1-yr ARM under 5%, or a 15- or 30-yr fixed mortgage at 7% with no more than 1 point. The first thing E-Loan does is check its current product inventory to let you know if they have something that meets or beats your price parameters. If so, up pops “rate available” and a bright blue “apply now” icon.

Only after you’ve had this initial opportunity to buy, does the broker give you the option to set up a daily rate update on your three target loans. To do so, you simply verify your e-mail address at the bottom of the page and press “submit.”

E-Loan’s free RateWatch provides daily status of up to three loan programs by e-mail.

“Monitor a Loan” provides an analysis of the user’s current loan vs. other loan products available.

The beauty of E-Loan’s approach is they never stop selling, but they provide so much value that the user barely notices. In Monitor a Loan: Compare your current mortgage to the market (screenshot above), users provide the details of their current mortgage, then receive an analyses of a variety of money-saving refinance options. A summary table is presented and users can opt to drill down to see more detail on savings projection, Net Present Value, etc. Naturally, the company provides an opportunity to apply now, or set up an e-mail RateWatch.

Some lenders do a good job moving users through the buying process, then fumble when it comes time to take the application. Not so at E-Loan. They continue to provide useful bits of advice every step of the way. On the first page of the application they offer four choices:

• apply online with secure server
• apply online with standard server
• order hardcopy application forms
• print out a set of application forms

At the bottom of the page they provide timely reassurance regarding the privacy of the application:

• For your comfort, our on-line applications do not require account information.
• When selecting an online application, you are told:
• The form below has been customized for a purchase preapproval. Please note that you do not have to answer every question on the application. Missing information can be forwarded to E-Loan once your loan is in process.
• Finally, for those chickening out, a chance to select a different option:
• If you don’t want to apply over the Internet, please click here for other options.

Lest you think we’ve lost our critical eye, E-Loan could improve in several areas. The lack of an 800 number for questions seems a glaring omission, but it’s probably to keep costs down. I would be surprised if the company didn’t expand its telephone support soon. Other areas for improvement include:

• expand online help and FAQs
• provide real-time online sales support (via chat)
• provide more background on the company and principals to give prospective applicants a better sense of the company’s stability
• provide more simple tools, such as payment calculators, to complement the advanced analyses already available

• company was launched on June 30, 1997
• received 1,000th loan application Oct. 27, 1997
• has marketing agreements with NewRealty.com  www.NewRealty.com an Internet-based real-estate brokerage; buyer’s broker JV Pinto and Associates; and luxury home-builder SummerHill Homes
• E-Loan is listed on Intuit’s QuickenMortgage Web site in the Mortgage and Real Estate Directory  mortgage.quicken.com
• E-Loan brokers loans through the following lenders among others: American Savings Bank, Bank of America, Bank United/Commonwealth Bank, CMG Mortgage Corporation, Countrywide, Flagstar, Great Western/Sierra Western, Headlands Mortgage, NationsBank Mortgage, North American Mortgage Company, Norwest Mortgage, Western Financial, World Savings

At E-Loan Christian Larsen, President, and Janina Pawlowski, CEO, are co-founders, 650.617.0403, janina@eloan.com . Rick Hutcheson is President of Internet Finance Corporation 415.427.1030, rick@moneyclub.com . George Marcus is Chairman of SummerHill Homes. John Pinto is President of JV Pinto Associates: Patrick Boyle is President of www.NewRealty.com , 415.325.1213.