Transformation Through Innovation:

How technology has positioned E-Loan as the industry’s leading online lender

Presented by Pete Bonnikson

SVP, First Mortgage

Transforming the Traditional Loan Process

While the Internet is E-Loan’s primary source of customer acquisition, innovation is applied throughout the origination process to reduce cycle time and improve the customer experience

Marketing

• The Internet as a unique medium to differentiate E-Loan from others

• Customers are driven to E-Loan’s web site through on/offline media

Sales

• Creating trust and confidence in competition with local influencers and originators

• Accelerating decision-making and consistent communications to create an advantage

Fulfillment

• Integrating tools and technology to eliminate paper wherever possible

• Automating loan origination support activities to minimize cycle time

E-Loan’s Progression of Technology

The Web Site: Establishing the entry point

Advanced marketing techniques to source “transactors” and bring them to the site

• Rigorous testing of Direct Response TV, direct mail and Internet methods

• Multivariate testing leads to understanding consumer behavior

Surrounding site visitors with tools and facts for an informed decision

• Educating the consumer and defraying decision-making costs

Facilitating a fast & easy process for submitting an application

• Continuous improvements to funnel in business

• This is merely the “ante” to get in the game

E-Loan’s Progression of Technology

Instant Qualification: Expediting decision-making and response time

Building up information needed for qualification

• Loan application, credit and fraud check data

• Merging credit data into the loan application

Comparing qualification data with complex program guidelines

• Automated matching of customer data and relevant products

Making a sub-minute decision and taking action

• Immediate accept and decline determination

• The moment of truth is not the decision, it’s the communication of it

E-Loan’s Progression of Technology

Instant Contact: Solving a major competitive disadvantage

The game isn’t won yet, but it’s certainly lost if LIVE contact is not made immediately

• Over 85% of E-Loan’s approved customers are live contacted within 5 minutes –

7 days a week

• Customers are contacted with an immediate approval

Instant Contact and Qualification are a powerful first impression

• Approved applicants are routed immediately and precisely to gain commitment

E-Loan’s Progression of Technology

Intelligent Routing: Aligning the customer with relevant expertise

E-Loan’s warm transfer technology matches the customer with an appropriately skilled consultant

• Technology balances customer needs and eligible advisors for a seamless, high-touch handoff

The consultant has instant access to relevant app, credit and product scenario tools

• Within minutes the customer is provided with tailored options to best meet their needs

Conversion is the primary objective and the statistics prove it

• 25% of all approved customers commit during the first call

Loan Consultant Ext. Manager PreApp Purch LC

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E-Loan’s Progression of Technology

Communications Workflow: Building a platform for managed communications

But 75% of E-Loan’s approved customers do not commit on the first call

• Structured communications are paramount for follow-up and conversion

E-Loan Loan Consultants manage a pipeline of 50 or more active customers

• Tools to generate automated alerts based on changing loan characteristics provide ongoing communications updates

• Quality is not diminished since alerts are limited to relevant tasks

The production team interacts based on integration between communications and transaction processing systems

E-Loan’s Progression of Technology

Transactional Workflow: Queuing tasks and events for flow management

The consultant operates as the ‘quarterback’, leading the team down the field

• A single point of contact for all customers

• Workflow with anytime/anywhere access keeps everyone current

• The supporting cast delivers on milestones to meet customer commitments

E-Loan’s Progression of Technology

Integrated Services: Leveraging partnerships and improving cycle time

National, local and exclusive partners are integrated with the process

• End-to-end automation where possible to minimize time and errors

• Systematic updates that feed transactional and workflow processing systems

• The consultant, team members and partners synchronize around the customer

E-Loan’s Progression of Technology

Automated Doc Prep: Minimizing errors and turn-time

Dynamically generated closing documents are created by the press of a button

• Packages supporting the geography, product and borrower combinations

• Automatically created, securely delivered to the closing agent

• Time and errors are reduced making the process fast & easy

• Final documents automatically provided to borrowers for review prior to signing appointment

E-Loan’s Progression of Technology

Electronic Closing: Eliminating signing errors and handling costs

Electronic acceptance of closing documents reduces signing and shipping problems

• Fast & easy for borrowers

• End-to-end automation wherever possible to minimize time and errors

• Borrowers can all sign electronically from different locations

Transforming the Traditional Loan Process

The Funnel Concept: Using Innovations to Expand Opportunities

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WEB APPLICATION

INSTANT QUALIFICATION

INSTANT CONTACT

INTELLIGENT ROUTING

CUSTOMER COMMITMENT

COMMUNICATIONS WORKFLOW

ELECTRONIC CLOSING

TRANSACTIONAL WORKFLOWSUPPLY CHAIN MANAGEMENT

Building Upon a Scalable Platform

E-Loan continues to innovate to meet emerging requirements

Providing a complete, competitive suite of products

• Product expansion is a critical success factor in gaining purchase market credibility

Creating a local presence

• Virtualization of the central office technology in the hands of remote consultants

Delivering on expectations

• Tuning the communications tools for all customers – including realtors, builders

Conventional Wisdom: E-Loan is a Refi Shop

The facts on E-Loan and the Internet Direct Lender model

“E-Loan is no more than a web site and a call center built for refinance production”

• Over 60% of E-Loan’s 2006 production was purchase mortgage volume

“E-Loan couldn’t produce the quality to win over market “influencers” like the Realtor”

• The Experience: 91% agent approval rating in 2006 -- 95% so far in ’07

• Speed: 20% of funded units occur during the same month the borrower applied

“E-Loan can only do purchase transactions in its California footprint”

• E-Loan is a national lender with distributed purchase loan production

California 13% North Carolina 4%Texas 8% Illinois 3%Florida 7% Maryland 3%Arizona 6% Ohio 3%Georgia 5% Massachusetts 3%Washington 5% Tennessee 3%Pennsylvania 4% New York 3%New Jersey 4% Other 28%

Conventional Wisdom: E-Loan is a Refi Shop

Listen to what Real Estate Agents are saying…

December 30, 2006 Florida“This was my first transaction with E -LOAN and I couldn’t have been more impressed . This was a first class experience .”

January 15, 2007 Washington“I can recommend E -LOAN to clientele with confidence. In this industry , that’s rare ! THANKS!!”

January 19, 2007 California“The speed with which you funded the loan and keeping me informed as to what was needed. I can’t think of a thing that needs improving .”

January 19, 2007 Tennessee“I have had excellent results with E -LOAN. Our clients are pleasantly surprised to find they can save money and still have the process flow and close on time .”

January 22, 2007 California“I never have to check on the status of the loan when I’m working with E -LOAN. They keep me informed every step of the way , and I don’t have to worry about whether the deal will close .”

The Market is Coming Our Way: Internet vs. Traditional Buyer

The Internet is changing how people buy houses

Internet Buyers now account for 70% of all buyers

• Up from just 28% in 2000

Internet Buyers take greater control over the entire process

• Almost 6 weeks before finding an agent vs. 2 weeks for Traditional Buyers

• Average of 2.2 weeks with an agent looking for a house vs. 7.1 weeks for Traditional

• Visit 6.7 houses with an agent vs. 15.4 houses for Traditional

Internet Buyers report far higher satisfaction on every aspect of the home buying process

• 96% of Internet Buyers were satisfied/very satisfied

• 66% of Traditional Buyers were satisfied/very satisfied

Source: California Association of Realtors, “Internet vs. Traditional Buyer,” 2006 - 2007

Transformation Through Innovation

E-Loan has transformed the traditional loan process through innovation to position itself as the industry’s leading online lender

Robust, scalable end-to-end solution for Internet-based loan origination

Ongoing innovation to continue to improve the customer experience and operations

Adapting to changing conditions to create a high-quality purchase market business model

Capitalizing on the opportunity as the homebuyer moves to the Internet

Pete BonniksonSVP, First MortgageE-LOAN

Pete Bonnikson has served as Vice President of Mortgage Operations of E-LOAN since January 1999. Prior to E-LOAN, Mr. Bonnikson was with North American Mortgage and its predecessor companies since 1981. Mr. Bonnikson was the Executive Vice President of North American Mortgage from 1993 to 1999. Mr. Bonnikson holds a B.S. degree from California State University at Sacramento.