What is E-loan
E-LOAN, Inc. operates as an online provider of loans directly to consumers in the United States. It offers borrowers a variety of purchase and refinance mortgage loans, home equity loans and home equity lines of credit, and auto loans. The company originates loans through its Web site and by telephone, and funds the loans using warehouse and other lines of credit and then sells the closed loans. The loan products include conforming and jumbo fixed rate mortgages; adjustable rate mortgages; alternate ‘A’ and non-prime mortgage loans; concurrent second mortgages; home equity loans; and lines of credit. E-LOAN operates both as a mortgage broker and a mortgage lender. The company was co-founded by Christian A. Larsen in 1996 and is headquartered in Pleasanton, California.
E-Loan, owned by Banco Popular, announced its exit from the online mortgage origination business. Reading the headlines, I first thought they'd thrown in the towel altogether. But it turns out they are discontinuing only direct mortgage originations. The company will continue to use its popular website (see traffic below) to attract potential borrowers who are handed off to other lenders, something it already does today for student, auto, personal and business loans, along with credit cards. This is a potentially lucrative fee-based business with zero credit risk.
It's a cautionary tale of how critical, and difficult, the execution piece is. These were industry darlings, always in the news and at the top of the search results. Yet, in financial services especially, you have to temper innovation with prudent underwriting and business practices.
E-LOAN, Inc. operates as an online provider of loans directly to consumers in the United States. It offers borrowers a variety of purchase and refinance mortgage loans, home equity loans and home equity lines of credit, and auto loans. The company originates loans through its Web site and by telephone, and funds the loans using warehouse and other lines of credit and then sells the closed loans. The loan products include conforming and jumbo fixed rate mortgages; adjustable rate mortgages; alternate ‘A’ and non-prime mortgage loans; concurrent second mortgages; home equity loans; and lines of credit. E-LOAN operates both as a mortgage broker and a mortgage lender. The company was co-founded by Christian A. Larsen in 1996 and is headquartered in Pleasanton, California.
E-Loan, owned by Banco Popular, announced its exit from the online mortgage origination business. Reading the headlines, I first thought they'd thrown in the towel altogether. But it turns out they are discontinuing only direct mortgage originations. The company will continue to use its popular website (see traffic below) to attract potential borrowers who are handed off to other lenders, something it already does today for student, auto, personal and business loans, along with credit cards. This is a potentially lucrative fee-based business with zero credit risk.
It's a cautionary tale of how critical, and difficult, the execution piece is. These were industry darlings, always in the news and at the top of the search results. Yet, in financial services especially, you have to temper innovation with prudent underwriting and business practices.
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