E-Loan showed borrowers the fees it charged, and in the mortgage business of 1999 that was unusual. Buying a house then meant a broker, a stack of paper, and fees few borrowers understood. E-Loan put the process on the web. Borrowers could compare rates from many lenders, apply online, and track their loan toward closing. E-Loan went public in June 1999, betting that open pricing would win buyers who felt brokers kept them in the dark.

Two Brokers Open the Books

Chris Larsen and Janina Pawlowski had worked together in mortgage brokerage. In 1996 they founded E-Loan in the San Francisco Bay Area. Their bet was transparency. E-Loan showed borrowers the rates it got and the fees it charged. It still earned its money as a broker, like the firms it competed with. The internet let it serve borrowers anywhere, at a lower cost than a branch office.

A Refinancing Boom Arrives

E-Loan priced its offering at $14 a share in June 1999. The stock fell steeply when the bubble burst. The business survived, and it later turned a profit as low interest rates drove a refinancing boom. In 2005 Popular, Inc., the Puerto Rico banking group, acquired E-Loan. Chris Larsen later co-founded two more companies: the lending marketplace Prosper, and then Ripple.

Cover: Piggy Bank, Unknown artist. Art Institute of Chicago, public domain. Chosen for a piggy bank (the loan).