Jump to content

E-Loan: Difference between revisions

Add links
Coordinates: 41°58′51″N 87°51′51″W / 41.980866°N 87.864031°W / 41.980866; -87.864031
From Wikipedia, the free encyclopedia
Browse history interactively
← Previous edit
Content deleted Content added
VisualWikitext
GreenC bot (talk | contribs)
Bots
2,547,807 edits
 
(93 intermediate revisions by 59 users not shown)
Line 1: Line 1:
{{Short description|American financial services company}}
{{Infobox Company
{{Infobox company
| company_name = E-LOAN, Inc.
| name = E-LOAN, Inc.
| company_logo = <!-- Commented out because image was deleted: [[Image:Eloan.jpg]] -->
| logo = ELOAN-LGO-Branded-BLK.png
| company_slogan = Radically Simple
| company_type = Public
| type = Public
| foundation = 1997
| foundation = 1997
| founder = Janina Pawlowski and Chris Larsen
| founder = Janina Pawlowski and Chris Larsen
| location = Pleasanton, California
| location = [[New York, New York]], U.S.
| key_people = {{unbulleted list|Ignacio Alvarez|(CEO)|Richard Carrión|(Executive Chairman)|Camille Burckhart|(CIO)}}
| key_people = Mark Lefanowicz, President
| industry = Financial Services
| industry = [[Financial services]]
| products = Referral to partners for Loan products
| products = Mortgage Refinance Loans <br /> Home Loans <br /> Home Equity Loans <br /> Car Loans <br /> Online Savings Accounts & CDs <br /> Student Loans <br />
| num_employees = 300
| num_employees = Part of Popular, Inc., which has 8,000 employees
| parent = Popular, Inc.
| parent = [[Popular, Inc.]]
| homepage = [http://www.eloan.com/ www.eloan.com]
| homepage = {{url|www.eloan.com}}
}}
}}
'''E-Loan, Inc.''' is a financial services company that offers its users access to partners that may be able to assist them in obtaining loans.
[[Image:Eloanheadquarters.jpg|thumb|right|E-Loan headquarters in Pleasanton]]
'''E-LOAN, Inc.''' is a nationwide financial services company that offers high yield savings accounts and certificates of deposit (CDs) through Banco Popular North America (BPNA), a New York state chartered bank that is the direct parent company of E-LOAN (i.e. E-LOAN is a wholly-owned subsidiary of BPNA). BPNA is a member of the FDIC (Federal Deposit Insurance Corporation) which insures bank deposits up to $250,000. It is also a wholly owned subsidiary of Puerto Rico-based Popular Financial Holdings, Inc.


E-Loan was a pioneer in the online lending industry in the late 1990s and early 2000s. As of 1999, it was the number one site for online lending, with Quicken Loan's later online offering playing catch-up in second after E-Loan declined a buyout offer.<ref name=":0">{{Cite news|url=https://www.forbes.com/forbes/1999/0419/6308222a.html#5e9bf744750e|title=Should she keep the baby|date=1999|work=Forbes Magazine|language=en}}</ref>
E-LOAN also provides access to several lending partners that may be able to assist customers in obtaining home purchase loans, mortgage refinance, home equity loans, car loans, student loans, business financing, unsecured loans, and free credit reports. Headquartered in [[Pleasanton, California]], the company has been operating since 1997.


As of 2017, E-Loan is focused on its personal loan referral business, and as of May 15, 2017 all of its deposit customers were transferred to Popular Direct.<ref>{{Cite news|url=http://finovate.com/eloan_to_stop_direct_mortgage_lending_but_will_maintain_loan_portalreferral_business/|title=E-Loan to Stop Direct Mortgage Lending but Will Maintain Loan Portal/Referral Business|date=October 2008|work=Finovate.com}}</ref><ref>{{Cite book|url=https://books.google.com/books?id=3zBIR9flC9wC&q=1998%2C+Eloan+mortgage+business&pg=PA122|title=The Guru Guide to Entrepreneurship: A Concise Guide to the Best Ideas|last2=Boyett|first2=Jimmie T.|date=1998|isbn=9780471436867|last1=Boyett|first1=Joseph H.}}</ref>
== Advertising ==


E-Loan is a division of [[Popular, Inc.|Banco Popular de Puerto Rico]].
In May 2005, E-LOAN launched a new advertising and branding campaign, and unveiled a new tag line: "E-LOAN. Radically Simple" <ref>{{cite web|url=http://findarticles.com/p/articles/mi_hb5246/is_200506/ai_n20498709|title=E-LOAN launches 'Radically Simple' ad campaign.}}</ref> The campaign, created by Merkley + Partners in New York, was inspired by E-LOAN's belief in its pro-consumer values and the ways in which the company continues to improve the consumer lending experience.

== Trademarks ==

E-LOAN Inc. currently owns the following trademarks: E-LOAN ®, E-LOAN - A better way to get a loan ®, My E-LOAN ®, PowerCheck ®, and E-LOAN Express ®.


== History ==
== History ==
[[File:Old E-Loan headquarters.jpg|thumb|Former E-Loan headquarters in [[Pleasanton, California]]]]
E-Loan was founded by Janina Pawlowski and Christopher Larsen in 1997. Former co-workers at a California-based mortgage lender,<ref name=":2">{{Cite book|url=https://books.google.com/books?id=4ggAAAAAMBAJ&q=1998%2C+Eloan+mortgage+business&pg=PA28|title=CIO: Web Business Section|date=October 1999|pages=128|language=en}}</ref> Pawlowski and Larsen had disagreed with their supervisor's on-the-job demands and decided to build their own mortgage business together. They took a chance on creating an online-based lending service, just as the Internet became ubiquitous.<ref name=":2" /> At the time, E-Loan's services included purchase and refinance mortgage loans, home equity loans, home equity lines of credit, and auto loans.{{Citation needed|date=February 2020}}


===Key Dates===
==Growth==
By mid-1997, the website, www.eloan.com, was launched. At the time it was the pioneer in online mortgage lending, with a Radically Simple value proposition at the time.<ref name=":2" />


In 1998, declining interest rates boosted mortgage originations to $1.5 billion, a 70% increase. Online loans increased only by $4.2 billion.<ref name=":2" /> However, at the time, E-Loan controlled 25% of the online lending market, making it the number-one online mortgage business in the world.<ref name=":0" /> E-Loan received $25.4 million in venture capital funding from [[Sequoia Capital]], [[Yahoo! Inc. (1995–2017)|Yahoo Inc.]], and Softbank Holdings Inc.<ref>{{Cite web|url=https://www.bizjournals.com/sanjose/stories/1998/11/02/daily13.html|title=E-loan gets second round of funding.}}</ref>
*1997: E-Loan, Inc. was founded by Janina Pawlowski and [[Chris Larsen]] to provide customers with access to [[mortgage]] loans over the [[Internet]].


== Yahoo Investment ==
*1998: E-LOAN received venture capital funding from [[Sequoia Capital]]. <ref>{{cite web|url=http://www.sequoiacap.com/company/e-loan/|title=Sequoia Capital funds E-LOAN|accessdate=2007-12-11}}</ref>
By August 1998, E-Loan needed a capital injection to secure growth. The online lender was burning through $250,000 per month as it tried to retain 150 employees. The founders met with Intuit Corp, which offered $130 million to acquire E-Loan. The deal would net Pawlowski and Larsen $10 million each and give them $16 million in Intuit stock. However, as part of the acquisition, E-Loan shifted from an autonomous company to having a board of trustees in charge of the decision making.<ref name=":0" />


In August 1998, Pawlowski approached Yahoo and negotiated to sell 23% of E-Loan for $25 million. Though the offer was substantially less profitable than the Intuit deal, it effectively maintained E-Loan's autonomy. It also made E-Loan Yahoo's preferred mortgage site.<ref name=":0" />
*1999: In June 1999, along with Larsen, Pawlowski led E-LOAN to a successful IPO. E-LOAN added car loans, credit cards, and small business loans to its product line in September 1999.


== Recovery & Development ==
*2000: E-LOAN became the first company to provide consumers with free access to their credit scores, allowing customers to check for possible incidents of identity theft or erroneous entries of [[credit debt]]. This was introduced at a time when many financial companies were reluctant to release this information.
In 2002, E-Loan established its headquarters in Pleasanton, [[California]]. It also created the E-loan Auto Fund One, a qualified special purpose entity that purchased prime auto loans from E-Loan and then held them. For this entity, E-Loan secured a $540 million auto loan credit facility with Merrill Lynch.<ref>{{Cite news|url=http://www.fi-magazine.com/news/story/2002/06/e-loan-inc-secures-540-million-auto-loan-credit-facility-with-merrill-lynch.aspx|title=E-Loan, Inc. Secures $540 Million Auto Loan Credit Facility With Merrill Lynch|date=June 2002}}</ref> During this time, E-Loan's revenues from sales consisted of discounted cash flows, net of interest, service fees, and credit losses.<ref>{{Cite web|url=https://www.sec.gov/Archives/edgar/data/1082337/000108233702000008/eloan-q2o2.pdf|title=Eloan, Inc SEC Filings|date=June 30, 2002}}</ref>


E-Loan started using proprietary and commercially available licensed technology from fintech providers like Sun Microsystems, Cisco Systems, and Oracle. E-Loan also began using automated credit filters and proprietary underwriting engine to lower the cost of the loan origination process. The use of licensed technology effectively helped bolster E-Loan's growth and reputation within the mortgage lending industry.<ref>{{Cite web|url=http://sec.edgar-online.com/e-loan-inc/10-k-annual-report/2002/04/01/section3.aspx|title=Eloan, Inc. 10-K SEC Filing|date=April 1, 2002}}</ref>
*2003: Larsen helped form “Californians for Privacy Now” to lead the fight for stricter financial privacy protection. After collecting over 600,000 signatures, the measure was placed on the California ballot and passed into law in 2003.


In 2003, E-Loan formed Escrow Closing Services, Inc., a wholly owned subsidiary that provides mortgage closing services such as documentation preparation and signing, disbursement, and recording services.<ref>{{Cite web|url=https://www.manta.com/c/mm8tdxy/escrow-closing-services-inc|title=Escrow Closing Services|date=2003|archive-url=https://web.archive.org/web/20180104073106/https://www.manta.com/c/mm8tdxy/escrow-closing-services-inc|archive-date=2018-01-04|url-status=dead}}</ref> In 2004, E-Loan originated more than $5 billion in mortgage loans. Most of those loans were fixed rate, and 70% were lines of credit. By the end of 2004, it employed 930 employees, had $121 million in assets, and $86 million in stockholder's equity. It generated $135 million in annual revenue, and $822,000 in net income.<ref name=":3">{{Cite web|url=https://www.sec.gov/Archives/edgar/data/1082337/000110935505000018/pressrlse4q04.htm|title=E-loan, Inc. Reports Fourth Quarter and Annual Results for 2004|date=February 2005}}</ref>
*2005: Ownership of the company changed when [[Popular, Inc.]] acquired E-LOAN, Inc for $300 million. <ref>{{cite web|url=http://juantornoe.blogs.com/hispanictrending/2005/08/popular_to_acqu.html|title=Popular to acquire E-Loan for $300M}}</ref>


As of 2004, 17% of the company's shares were owned by insiders. The largest shareholder, at 5.05%, was Christian Larsen, following by Harold Bonnikson at 1.28% and Matthew J. Roberts at .85%. In 2004, 38% of the company was owned by institutional holders.<ref name=":3" /> The largest institutional shareholders were Second Curve Capital at 7.77%, [[Wells Fargo|Wells Fargo & Co.]] at 5.11%, American Century Investment Mgmt at 2.11%, Rice, Hall, James, & Associates at 1.82%, and Gruber & McBaine Capital Management at 1.63%.<ref name=":4">{{Cite news|url=https://www.foxnews.com/story/banco-popular-parent-to-buy-e-loan-for-300m|title=Banco Popular Parent to Buy E-Loan for $300M|date=August 2005}}</ref>
*2006: E-LOAN branched out into online savings accounts and CDs. <ref>{{cite web|url=http://bankdeals.blogspot.com/2006/10/e-loan-savings-account-and-cds-one.html|title= E-LOAN Savings Account and CDs One Month Anniversary}}</ref>


== Banco Popular Acquisition ==
*2007: E-Loan fired 500 people as a way to concentrate on other loans.
In August 2005, the Puerto Rico-based commercial bank, Banco Popular, acquired E-Loan for $300 million.<ref name=":4" /> Banco Popular's parent company, Popular Inc., known for being the largest financial institution in Puerto Rico had $46 billion in assets, more than 135 branches in the U.S., and more than 280 branches in Puerto Rico at the time it purchased E-Loan.<ref name=":4" /><ref name=":5">{{Cite news|url=https://www.insidearm.com/news/00020955-popular-inc-and-e-loan-inc-announce-antic/|title=Popular, Inc. and E-LOAN, Inc. Announce Anticipated Closing of Merger|date=2006|language=en}}</ref>


The goal of the acquisition was to increase E-Loan's access to financial holdings, and therefore, its loan production capacity. With this increased lending capacity, both Popular and E-Loan sought to capitalize on a cost advantage through economies of scale.<ref name=":4" />
== Online Loan Process & Services - Prior to 2009 ==


In October 2008, E-Loan's parent company, [[Popular, Inc.]] said E-Loan would no longer operate as a direct mortgage lender in 2009, but would continue to provide certificates of deposit and savings accounts.<ref>{{Cite web|url=https://www.sec.gov/Archives/edgar/data/763901/000095014409001778/g17700exv13w1.htm|title=Popular, Inc. 2008 Annual Report}}</ref> Operational, general and administrative support functions would be transferred to other Popular subsidiaries.<ref name=":0" /><ref name=":1">{{Cite web|url=https://www.populardirect.com/eloan|title=Popular Direct, Eloan}}</ref> The company subsequently moved its headquarters in 2009 from [[Pleasanton, California]] to [[Rosemont, Illinois]].
At [http://www.eloan.com www.eloan.com], consumers can first shop for mortgage rates without entering any personal information. When they're ready to apply, consumers can quickly and easily complete an online application. Within approximately two minutes of customer submission, the loan is automatically underwritten and an email response sent to the customer. Once approved, a personal loan consultant contacts the customer within the hour to confirm the loan.


Company officials said customers who have already obtained loans through E-Loan would not be affected as they were transitioned to another subsidiary of Popular.<ref name=":1" />
In 1998, E-LOAN launched E-Track, the first ever 24-hour loan tracking service, a proprietary system that allows borrowers to securely check the status of their loan application online at every stage of the process. E-TRACK gives customers a greater level of control over a process that has traditionally been confusing and frustrating in the offline world.


== Development After the Acquisition ==
Using E-Track, customers will instantly know pertinent information such as the date that their application was received, which additional documents are required, appraisal results and lock-in status, and anticipated closing date. E-Track also provides current closing cost information including the exact amount of cash needed to close the loan and specifications for impounds and mortgage insurance. In 1999, the company launched E-Track Pro(SM), an extension of E-Track, for realtors to use to track their clients' mortgage applications in process at E-LOAN. <ref>{{cite web|url=http://realtytimes.com/rtpages/19990521_preloan.htm|title=E-LOAN Launches E-Track Pro}}</ref>
In May 2017, E-Loan deposit products transitioned to Popular Direct products. Both E-Loan and Popular Direct are owned and operated by Banco Popular North America.<ref name=":5" />

In February 2000, E-LOAN launched My E-LOAN, the first online account available to help people manage their loans as easily and intuitively as they manage their investments. <ref>{{cite web|url=http://www.eloan.com/s/show/press/2001-08-13|title=E-LOAN Transforms the Mortgage Process}}</ref> By setting up a customized My E-LOAN account, people can:
*Track interest rate trends & get an overview of the factors affecting current interest rates.
*Instantly receive their credit score for free, understand how it is calculated, and determine how the score may affect their loan rates & term.
*Access E-LOAN's full range of tools, calculators, advice and educational content.
*Access E-Track


Since 2000, E-LOAN customers have been getting approvals within minutes and mobile notary service for home equity loans. <ref>{{cite web|url=http://findarticles.com/p/articles/mi_m0EIN/is_2000_Dec_18/ai_68141218|title=E-LOAN Unveils Instant Online Decisioning for Home Equity Loans}}</ref> They enjoy the convenience of automated appraisal valuations & receive their loan funds in as little as ten business days. Once they receive their check, they can use it for whatever purpose they choose, such as debt consolidation, college tuition or home improvements.

In 2002, E-LOAN unveiled Loan Advisor,<ref>{{cite web|url=http://ccrmag.net/article.html?id=20061016GJHNSSCZ|title=E-LOAN Unveils 'Loan Advisor'}}</ref> the first financial planning tool to offer personalized advice to address customers’ unique debt situation. It asks consumers about their goals, how much money they are seeking, how long they will need the money, their tax rate and information about existing mortgage & home equity loans. It will then determine the loan solution that offers the lowest payments or has the lowest cost over the time period the customer is considering.

== 2007 Credit Crunch ==

E-LOAN is not considered a subprime lender. The company has borrowers with higher credit quality. Nevertheless, in light of the significant changes and challenges in the mortgage industry, the company cut over 500 jobs as part of a restructuring plan in November 2007. <ref>{{cite web|url=http://www.inman.com/news/2007/11/1/e-loan-shedding-more-500-workers|title=E-LOAN announces layoffs}}</ref> The layoffs were a result of a move to concentrate on loans eligible for repurchase to Fannie Mae and Freddie Mac, according to a U.S. Securities and Exchange Commission filing by Popular, Inc. The company has also temporarily suspended the acceptance of new "Home Equity" Wholesale loan applications.

==2009 E-LOAN Restructuring Plan==

Popular, Inc. has made the decision that E-LOAN will no longer operate as a direct mortgage lender in 2009. E-LOAN will continue to provide Certificates of Deposit and Savings Accounts through Banco Popular North America, which is a member of the FDIC. E-LOAN will also offer loan customers the option of being referred to a trusted consumer lending partner. All operational, general and administrative support functions will be transferred to other Popular, Inc. subsidiaries. <ref>{{cite web|url= http://biz.yahoo.com/e/081023/bpop8-k.html|title=E-LOAN Restructuring Plan}}</ref>
<ref>{{cite web|url= http://www.netbanker.com/2008/10/eloan_to_stop_direct_mortgage_lending_but_will_maintain_loan_portalreferral_business.html|title=E-LOAN To Stop Direct Mortgage Lending}}</ref>

Customers who have already obtained loans through E-LOAN will not be affected. "It will be seamless," said Juan Carlos Cruz, the Vice President of Public Relations and Media for Illinois-based Banco Popular North America. <ref>{{cite web|url= http://www.contracostatimes.com/portal/business/ci_10797437|title=E-LOAN Will Stop Issuing New Loans}}</ref>


== Awards ==
== Awards ==
{{More citations needed|section|date=December 2015}}

Since its inception, E-LOAN has garnered various awards for privacy and ease-of-use. Some of these include:
Since its inception, E-Loan has garnered various awards for privacy and ease-of-use:
*[http://www.webaward.org/winner.asp?eid=25402#.Uvu7Inm7HUM Web Marketing Association's Web Awards Financial Services Standard of Excellence Award] (2013)

*[http://www.newmediaawards.org/webawards/2013/eloan.html New Media Awards Standard of Excellence Award] (2013)
*[http://news.morningstar.com/newsnet/ViewNews.aspx?article=/BW/20080522005859_univ.xml Ranked #1 Mortgage Website for the 5th Consecutive Time] - 2008 Mortgage Scorecard by [[Keynote Systems]]. This is the 5th consecutive win for E-LOAN.
*[https://finance.yahoo.com/news/e-loan-inc-honored-interactive-001000492.html Interactive Media Award’s (IMA) Best In Class in the Banking Category] (October 2013)
*[http://www.truste.org/pdf/2007_Most_Trusted_Companies_Award.pdf Top Financial Company for Privacy by TRUSTe and the Ponemon Institute ](April 2007)
*[https://web.archive.org/web/20080727023527/http://www.truste.org/pdf/2007_Most_Trusted_Companies_Award.pdf Top Financial Company for Privacy by TRUSTe and the Ponemon Institute ](April 2007)
*[http://findarticles.com/p/articles/mi_m0EIN/is_2006_Nov_13/ai_n16836039 Ranked #1 for Customer Respect (November 2006)]
*[http://blogs.zdnet.com/ITFacts/?p=8754 Ranked #3 in Privacy by The Customer Respect Group] (August 2005) E-LOAN was the only financial services company and the highest ranking online company to make the top ten.
*[https://web.archive.org/web/20051122211651/http://blogs.zdnet.com/ITFacts/?p=8754 Ranked #3 in Privacy by The Customer Respect Group] (August 2005) E-Loan was the only financial services company and the highest ranking online company to make the top ten.
*[http://www.computerworld.com/securitytopics/security/privacy/story/0,10801,100946,00.html Safest Places On the Web]. Computer World
*[http://goliath.ecnext.com/coms2/gi_0199-3926300/E-LOAN-Ranked-Best-Overall.html Highest rating in the First Quarter 2005 Online Customer Respect Study of North America's largest financial services firms.](March 2005)
*[http://www.eloan.com/s/show/ease_of_use? Easiest Site For Consumers to Use ](March 2004)
*[http://goliath.ecnext.com/coms2/gi_0199-4054806/The-Mortgage-Professor-Will-Certify.html E-LOAN was the first lender to earn the Upfront Mortgage Lender certification.]
*[http://www.computerworld.com/securitytopics/security/privacy/story/0,10801,100946,00.html COMPUTERWORLD’s Safest Places On the Web]


==References==
==References==
Line 94: Line 71:


==External links==
==External links==
*[http://www.eloan.com www.eloan.com] (Homepage)
*[http://www.eloan.com Homepage]
*[http://savings.eloan.com/savings savings.eloan.com/savings] (Savings & CDs)
*[http://www.eloan.com/s/show/simply E-LOAN corporate About page]


{{coord|41.980866|-87.864031|type:landmark_globe:earth_region:US-IL|display=title}}


[[Category:Mortgage lenders]]
[[Category:American companies established in 1997]]
[[Category:Financial services companies established in 1997]]
[[Category:Mortgage lenders of the United States]]
[[Category:Financial services companies of the United States]]
[[Category:Financial services companies of the United States]]
[[Category:Banks]]
[[Category:Companies based in Pleasanton, California]]
[[Category:Financial services companies of Australia]]
[[Category:Companies based in Cook County, Illinois]]
[[Category:Rosemont, Illinois]]
[[Category:2005 mergers and acquisitions]]
[[Category:1997 establishments in the United States]]
[[Category:1997 establishments in Illinois]]
[[Category:Companies established in 1997]]

Latest revision as of 23:56, 9 November 2024

E-LOAN, Inc.
Company typePublic
IndustryFinancial services
Founded1997
FounderJanina Pawlowski and Chris Larsen
HeadquartersNew York, New York, U.S.
Key people
  • Ignacio Alvarez
  • (CEO)
  • Richard Carrión
  • (Executive Chairman)
  • Camille Burckhart
  • (CIO)
ProductsReferral to partners for Loan products
Number of employees
Part of Popular, Inc., which has 8,000 employees
ParentPopular, Inc.
Websitewww.eloan.com

E-Loan, Inc. is a financial services company that offers its users access to partners that may be able to assist them in obtaining loans.

E-Loan was a pioneer in the online lending industry in the late 1990s and early 2000s. As of 1999, it was the number one site for online lending, with Quicken Loan's later online offering playing catch-up in second after E-Loan declined a buyout offer.[1]

As of 2017, E-Loan is focused on its personal loan referral business, and as of May 15, 2017 all of its deposit customers were transferred to Popular Direct.[2][3]

E-Loan is a division of Banco Popular de Puerto Rico.

History

[edit]
Former E-Loan headquarters in Pleasanton, California

E-Loan was founded by Janina Pawlowski and Christopher Larsen in 1997. Former co-workers at a California-based mortgage lender,[4] Pawlowski and Larsen had disagreed with their supervisor's on-the-job demands and decided to build their own mortgage business together. They took a chance on creating an online-based lending service, just as the Internet became ubiquitous.[4] At the time, E-Loan's services included purchase and refinance mortgage loans, home equity loans, home equity lines of credit, and auto loans.[citation needed]

Growth

[edit]

By mid-1997, the website, www.eloan.com, was launched. At the time it was the pioneer in online mortgage lending, with a Radically Simple value proposition at the time.[4]

In 1998, declining interest rates boosted mortgage originations to $1.5 billion, a 70% increase. Online loans increased only by $4.2 billion.[4] However, at the time, E-Loan controlled 25% of the online lending market, making it the number-one online mortgage business in the world.[1] E-Loan received $25.4 million in venture capital funding from Sequoia Capital, Yahoo Inc., and Softbank Holdings Inc.[5]

Yahoo Investment

[edit]

By August 1998, E-Loan needed a capital injection to secure growth. The online lender was burning through $250,000 per month as it tried to retain 150 employees. The founders met with Intuit Corp, which offered $130 million to acquire E-Loan. The deal would net Pawlowski and Larsen $10 million each and give them $16 million in Intuit stock. However, as part of the acquisition, E-Loan shifted from an autonomous company to having a board of trustees in charge of the decision making.[1]

In August 1998, Pawlowski approached Yahoo and negotiated to sell 23% of E-Loan for $25 million. Though the offer was substantially less profitable than the Intuit deal, it effectively maintained E-Loan's autonomy. It also made E-Loan Yahoo's preferred mortgage site.[1]

Recovery & Development

[edit]

In 2002, E-Loan established its headquarters in Pleasanton, California. It also created the E-loan Auto Fund One, a qualified special purpose entity that purchased prime auto loans from E-Loan and then held them. For this entity, E-Loan secured a $540 million auto loan credit facility with Merrill Lynch.[6] During this time, E-Loan's revenues from sales consisted of discounted cash flows, net of interest, service fees, and credit losses.[7]

E-Loan started using proprietary and commercially available licensed technology from fintech providers like Sun Microsystems, Cisco Systems, and Oracle. E-Loan also began using automated credit filters and proprietary underwriting engine to lower the cost of the loan origination process. The use of licensed technology effectively helped bolster E-Loan's growth and reputation within the mortgage lending industry.[8]

In 2003, E-Loan formed Escrow Closing Services, Inc., a wholly owned subsidiary that provides mortgage closing services such as documentation preparation and signing, disbursement, and recording services.[9] In 2004, E-Loan originated more than $5 billion in mortgage loans. Most of those loans were fixed rate, and 70% were lines of credit. By the end of 2004, it employed 930 employees, had $121 million in assets, and $86 million in stockholder's equity. It generated $135 million in annual revenue, and $822,000 in net income.[10]

As of 2004, 17% of the company's shares were owned by insiders. The largest shareholder, at 5.05%, was Christian Larsen, following by Harold Bonnikson at 1.28% and Matthew J. Roberts at .85%. In 2004, 38% of the company was owned by institutional holders.[10] The largest institutional shareholders were Second Curve Capital at 7.77%, Wells Fargo & Co. at 5.11%, American Century Investment Mgmt at 2.11%, Rice, Hall, James, & Associates at 1.82%, and Gruber & McBaine Capital Management at 1.63%.[11]

[edit]

In August 2005, the Puerto Rico-based commercial bank, Banco Popular, acquired E-Loan for $300 million.[11] Banco Popular's parent company, Popular Inc., known for being the largest financial institution in Puerto Rico had $46 billion in assets, more than 135 branches in the U.S., and more than 280 branches in Puerto Rico at the time it purchased E-Loan.[11][12]

The goal of the acquisition was to increase E-Loan's access to financial holdings, and therefore, its loan production capacity. With this increased lending capacity, both Popular and E-Loan sought to capitalize on a cost advantage through economies of scale.[11]

In October 2008, E-Loan's parent company, Popular, Inc. said E-Loan would no longer operate as a direct mortgage lender in 2009, but would continue to provide certificates of deposit and savings accounts.[13] Operational, general and administrative support functions would be transferred to other Popular subsidiaries.[1][14] The company subsequently moved its headquarters in 2009 from Pleasanton, California to Rosemont, Illinois.

Company officials said customers who have already obtained loans through E-Loan would not be affected as they were transitioned to another subsidiary of Popular.[14]

Development After the Acquisition

[edit]

In May 2017, E-Loan deposit products transitioned to Popular Direct products. Both E-Loan and Popular Direct are owned and operated by Banco Popular North America.[12]

Awards

[edit]

Since its inception, E-Loan has garnered various awards for privacy and ease-of-use:

References

[edit]
  1. ^ a b c d e "Should she keep the baby". Forbes Magazine. 1999.
  2. ^ "E-Loan to Stop Direct Mortgage Lending but Will Maintain Loan Portal/Referral Business". Finovate.com. October 2008.
  3. ^ Boyett, Joseph H.; Boyett, Jimmie T. (1998). The Guru Guide to Entrepreneurship: A Concise Guide to the Best Ideas. ISBN 9780471436867.
  4. ^ a b c d CIO: Web Business Section. October 1999. p. 128.
  5. ^ "E-loan gets second round of funding".
  6. ^ "E-Loan, Inc. Secures $540 Million Auto Loan Credit Facility With Merrill Lynch". June 2002.
  7. ^ "Eloan, Inc SEC Filings" (PDF). June 30, 2002.
  8. ^ "Eloan, Inc. 10-K SEC Filing". April 1, 2002.
  9. ^ "Escrow Closing Services". 2003. Archived from the original on 2018-01-04.
  10. ^ a b "E-loan, Inc. Reports Fourth Quarter and Annual Results for 2004". February 2005.
  11. ^ a b c d "Banco Popular Parent to Buy E-Loan for $300M". August 2005.
  12. ^ a b "Popular, Inc. and E-LOAN, Inc. Announce Anticipated Closing of Merger". 2006.
  13. ^ "Popular, Inc. 2008 Annual Report".
  14. ^ a b "Popular Direct, Eloan".
[edit]

41°58′51″N 87°51′51″W / 41.980866°N 87.864031°W / 41.980866; -87.864031

Retrieved from "https://en.wikipedia.org/enwiki/w/index.php?title=E-Loan&oldid=1256447847"