RealTime IT News

Schwab, E-LOAN Offer Mortgage Services

Charles Schwab & Co. Inc. Tuesday added mortgage products to its lineup through a partnership with online mortgage broker E-LOAN Inc.

E-LOAN will grant Schwab (SCH) warrants totaling 13.1 million shares in two installments. The first batch consists of 6.5 million shares, has a three-year term, and is exercisable at $3.75 per share, subject to certain exercise provisions. The second batch consists of 6.6 million shares, has a 3 1/4 year term, and is exercisable at $15 per share.

Over a four-year term beginning this June, retail Schwab customers will access E-LOAN's (EELN) mortgage products from more than 70 lenders, as well as online rate search, loan comparison and tracking services. E-LOAN's customer service representatives will offer the services.

Schwab currently serves 3.7 million active online accounts with $349 billion in customer assets.

Daniel O. Leemon, Schwab executive vice president of business strategy, will become an E-LOAN director. Leemon said his firm conducted research and found that people who go online would be interested in seeking a mortgage through schwab.com.

"After an exhaustive review process involving nine companies, E-LOAN emerged as the best provider. They are a company with a commitment to customer service, superior technology, a choice-based business model with a breadth of products, and a strong management team," Leemon said.

In related news Tuesday, E-LOAN scored $40 million in cash investments from Charles Schwab Corp., Abbey National, FT Ventures, Benchmark Capital and Technology Partners. Though stake percentages were not specified, Schwab, Abbey National, and FT Ventures contributed $10 million each, with Benchmark Capital and Technology Partners chipping in $5 million each.

The proceeds will be used for working capital and general corporate purposes.

We have made updates to our Privacy Policy to reflect the implementation of the General Data Protection Regulation.