|E-LOAN Transforms the Mortgage Process
By Dramatically Changing Nearly Every Step of the Mortgage Process, E-LOAN Becomes One of the Mortgage Industry's Lowest Cost Producers
DUBLIN, Calif., Aug. 13 /PRNewswire/ -- E-LOAN, Inc. (Nasdaq: EELN), a leading online lending company, today introduced its next generation mortgage application, marking the final step in a complete transformation of the traditional mortgage process.
This new application is the culmination of multiple product and service innovations that have been introduced during the past year, including E-LOAN's proprietary automated underwriting system, the delivery of disclosures online, and flash funding: the electronic delivery of loans to the secondary market. By transforming the mortgage process, E-LOAN has become one of the lowest cost producers in the mortgage industry.
``For a long time people have been talking about the inefficiency of mortgage transactions and the monumental task of fundamentally changing the process,'' said Joe Kennedy, E-LOAN's President and COO. ``Today E-LOAN is proud to say that our focus and persistence in this undertaking has paid off. We've dramatically changed almost every step of the mortgage transaction, making E-LOAN one of the most efficient originators in the industry.''
E-LOAN has always been at the forefront of the online lending industry, continuously breaking down barriers to make the process significantly faster, easier and far less expensive for both consumers and the company. The only legacy of the original E-LOAN mortgage process is the initial act of logging onto the website and filling out an application form. The process that ensues has changed remarkably in a very short time.
Today, E-LOAN's mortgage process starts electronically with the customer and stays that way. From the start to the end of the process, the loan information is never re-entered by anyone at E-LOAN or at the investor/servicer. Where technology and automation make sense, high tech is used. Where a person can make a distinct difference, such as consulting with a customer, E-LOAN team members provide high touch. The result is a process that customers have responded to enthusiastically, while costs and working capital usage have continued to go down.
Following are in-depth descriptions of E-LOAN's three most important innovations to date: proprietary underwriting system, online disclosures, and flash funding.
Proprietary Underwriting System
What happens immediately after application has changed dramatically. In the old days, the loan application would be printed and manually reviewed and input into one of the Government Sponsored Enterprise's (GSE's) underwriting engines. The results would then be reviewed, and within several hours after application, the customer would be called back with an answer. In addition to the time expended printing and reviewing the loan, E-LOAN also incurred significant charges for each GSE underwriting run.
Today, a loan is immediately passed through an automated series of credit filters, and then, if credit qualified, immediately passed through E-LOAN's proprietary underwriting engine. Within approximately two minutes of customer submission -- and without any human effort or underwriting charges except for the minimum required credit report costs -- the loan is automatically underwritten and an email response sent to the customer. At the same time, the output of E-LOAN's underwriting engine is passed on in an easy to read electronic format to a loan consultant for immediate follow up with the customer.
In the past, the slew of disclosures that are required by various federal and state laws were printed and manually mailed out. Today, they are accepted in electronic form by 80% of E-LOAN's customers, enabling faster and more easily navigable access using the company's proprietary E-Track system, than the older, more expensive way. In addition, E-LOAN now posts federally required decline letters electronically, eliminating shipping and handling costs.
Post closing, E-LOAN used to put together a thick loan file and send it off to the secondary investor, who would manually review it, manually re-enter a tremendous amount of information into their own computer system. Then, the investor would communicate back to E-LOAN, typically by phone.
Today, for much of E-LOAN's secondary loan sales, the company uses its new flash funding process. Using this process, all of the information E-LOAN has on the loan is sent across an electronic bridge to the investor/servicer, where it is automatically loaded into their servicing system, eliminating almost all of the manual effort required on their end. A handful of the key customer signed documents are mailed to the investor/servicer; the remainder of the loan file is immediately sent to storage. E-LOAN receives the investor/servicer's electronic acknowledgement and payment for the loan in days, not weeks, enabling the company to better manage interest rate spreads, hedge costs, and working capital.
|About E-LOAN, Inc.
E-LOAN, Inc., a leading online lending company, offers consumer loans and debt management services online at www.eloan.com. E-LOAN has reinvented the consumer loan process by offering a broad choice of products from many lenders for mortgages, home equity loans, auto loans, education loans, credit cards and small business loans in a secure online environment, combined with comprehensive personal service from dedicated loan consultants. Through the second quarter of 2001, E-LOAN originated over $5.5 billion in consumer loans. The company's loan processing centers are located in Dublin, CA and Jacksonville, FL. E-LOAN, Inc. is publicly traded on the Nasdaq system under the symbol EELN.
This news release contains forward-looking statements based on current expectations that involve risks and uncertainties. E-LOAN's actual results may differ from the results described in the forward-looking statements. Factors that could cause actual results to differ include, but are not limited to, general conditions in the mortgage and auto industries, interest rate fluctuations, and the impact of competitive products. These and other risk factors are detailed in E-LOAN's periodic filings with the Securities and Exchange Commission.
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