ppf3 by 2rwZZG


      Kanwal Bagri
     Philippe Burney
       Steve Chang
    Srinivas Chitrapu
 Sita Ram Jonnalagadda
      Courtney Ruf
               Company History
• World Wide Financial founded in 1990 by four partners.
• By 1993, WWF was originating $100 million in
  conforming mortgages per month.
• In 1994 due to the changing interest rate environment,
  WWF reevaluated their strategy and changed their focus to
  the sub-prime market.
• WWF began doing business as LoanGiant.com in March
  of 2000.
        LoanGiant Guarantee
“LOANGIANT.COM pledges to be your Lender for
Life. We will close your loan faster than anyone else
using our instant on-line approval or by phone regardless
of your credit and/or financial situation. Each of our
borrowers should receive at closing a financial plan or
budget to ultimately lead them to financial freedom.
LOANGIANT.COM guarantees to beat any bonafide
mortgage deal offered in writing to any existing
              Mortgage Industry
• $2.03 trillion dollars of mortgages were originated
  in 2001
• 67% of Americans own homes
• Real estate lending market is changing from a
  purchase market to a refinance/cash-out market
• Mortgage loan applications have more than
  doubled in the previous three years
               Current Market
•Lowest mortgage rates in years
•Real estate lending market has changed from a
primarily purchase market to a refinance market due
to interest rate environment
•Real estate market is also doing well in spite of the
•Mortgage loan applications have more than doubled
in the previous three years
                   Subprime Borrower
•Banking regulators consider you to be a subprime
borrower if you have a FICO score of 660 or lower;
two (or more) 30 day delinquencies in the past 12
months, or one 60 day delinquency in the past 24
months; a foreclosure or chargeoff in the past 24
months; any bankruptcy in the last 60 months;
qualifying debt-to-income ratios of 50% or higher;
and, "limited ability to cover family living expenses
each month“.
                 Industry Players
• Mortgage Companies
   – A firm or individual who, for a commission, matches borrowers
     and lenders. A mortgage broker takes applications and sometimes
     processes loans, but generally does not use its own funds for
• Wholesalers/Servicers
   – A term used by Fannie Mae and Freddie Mac for a mortgage
     banker or other entity that has met the requirements necessary to
     sell and service mortgages for Fannie Mae or Freddie Mac.
• Investors
•FNMA (Federal National Mortgage Assoc.)
–The nation's largest mortgage investor created in 1968 by an amendment to Title III of the National
Housing Act (12 USC 1716 et seq.) this stockholder-owner corporation, a portion of whose board of
directors is appointed by the President of the United States, supports the secondary market in mortgages
on residential property with mortgage purchase and securitization programs.

•FHLMC (Federal Home Loan Mortgage Corp.)
–Created by Congress in Title III of the Emergency Home Finance Act of 1970 (12 USC1451 et seq.).
This stockholder-owned corporation, a portion of whose board of directors is appointed by the President
of the United States, supports the secondary market in mortgages on residential and multifamily properties
with mortgage purchase and securitization programs .

•GNMA (Government National Mortgage Assoc.)
–Created in 1968 by an amendment to Title III of the National Housing Act (12 USC 1716 et seq.), this
federal government corporation is a constituent part of the Department of Housing and Urban
Development. Among other governmental functions, it guarantees securities backed by mortgages that are
insured or guaranteed by other government agencies. Also called Government National Mortgage
Association (GNMA).

•Private Investors
                      Life of a Loan
1)   Application is taken from the borrower over the internet, over the phone, or
     in person.
2)   The mortgage is underwritten to ensure the borrower is deemed credit
3)   Information is gathered from the borrower, a title company, and an
     appraiser to support the underwriting decision.
4)   The loan is closed. Documents are signed and funds are exchanged.
5)   The mortgage broker sells the loan to a Wholesaler/Servicer.
6)   If the Wholesale/Servicer does not want to retain the loan, then they sell the
     loan to an Investor otherwise the Servicer is also the Investor.
7)   The Investor securitizes the mortgage in a pool of similar mortgages.
8)   The borrower makes their monthly payments to the Servicer which is then
     passed through to the holder of the Mortgage Backed Security.
                 Plans and Goals
•To be our customers’ “Lender for Life”.

•Give the same high-quality level of service to all borrowers
regardless of credit history.
     Transaction based vs. Relationship based

•A fairly priced sub-prime loan
      No point, no fee
      Shop around
                    Business Plan
Phase I – Develop a website to approve borrowers on-line,
real time regardless of their credit history.
Phase II – Enhance the website so that all Internet users can
and will be marketed.
Phase III – Enhance website so all borrowers located
anywhere in the US can be contacted by a local
LoanGiant.com agent.
Phase IV – Complete the transition of off-line mortgage
banking operations to a full-scale on-line Internet operation
that offers the full spectrum of financial and household
services to any user or visitor to the site.
           Marketing Strategy
     The five elements of a typical marketing
                   strategy include:
1.   Scope
2.   Goals and Objectives
3.   Resource Deployments
4.   Identification of sustainable competitive
5.   Synergy
Target Market:
-Sub-prime; nonconforming; 25-49 years old

Product Line Depth and Breadth:
-Jumbo, Second, LTV, FHA,VA, conforming and
                Scope     (Continued)

Product Market Development Plan:
-National Marketing
-Complete Online Processing
-Web Enabled Contact center
-Follow up on uncommitted web users
-Complete financial partner and household
services provider.
Line Extension:
Adding value by offering services to existing
              Goals and Objectives

•Move towards CRM – Complete Financial Partner
•Increased Market Share
•Project Low Cost image
•Make the loan process less intimidating
•Encourage Rate Shop
            Resource Deployments

•Majority of company’s advertisement budget is spent on
broadcast and cable television which company finds most
effective in reaching its intended audience.

•Focus on automation of home loan process.

•Online home loan completion through intuitive automated
              Competitive Advantages
Online presence
•LoanGiant has the strongest online presence compared to its

Brand recognition
•Andy Jacob’s recognition in the marketplace is very

Experienced staff
•The experienced loan officers at LoanGiant offer the best

Industry Consolidation

Online Partnerships
•Integra, Better Business Bureau, Service Reps, Verisign, and
Dell computers.

AmWay, term-life, free legal advise
•Automation / Home Equity Software
   –Two-minute Loans
•Technology (potential)
   –Skills, Talent (Sales, IT, Customer Service)

•Cash Flows
   –Required for operations
   –Inability to gauge potential customer
•Growing internet usage
   –Over 150 million on-line
   –75% households on-line by 2004
   –On-line spending forecasted at $86.3 b in 2003
•Technology / Security
   –For on-line transactions
   –Tracking usage, on-line habits
•Closing a gap in the on-line market place
   –Niche, first-to-market
•Predatory Lending
   –Bigger players have more leverage
   –On fees, points charged and premium
•Reliance on traditional channels
   –Interpersonal experience
•Not to be confused with another “dot-com”
   –SPAM could reduce credibility, increase clutter
                       Threats        (continued)

•Interpersonal experience more likely to succeed in selling
   – On-line users less likely to commit to a contract
   – Of sub-prime lenders
   – Technology can be easily copied
•Acquire customer using a combination of interpersonal and
internet experience
   – Level of commitment expected from customer
•Formal CRM to maintaining customer base and a long term
   – Track customers, feedback
•Build a strong and publicized alliance
   – Customer base and cash flow
                  Recommendations                  (continued)

•Moving away from a total dependence on the sub prime market
•First Mover needs Large scale entry
   –Threat of imitators
•Ensure excellence in quality and service
•Use new technologies to improve business processes and meet
expansion needs
              Recommendations        (continued)

•Use of Portals
   –Enhance customer experience
   –Track customers in more detail
              Recommendations                    (continued)

•Capitalize on technology
       - Keep the user engaged
       - Use relevant pop-up messages
       - Make the application form as short as
       - Implement a CRM system
              Recommendations                   (continued)

Target Market
•Advertising is key for the sub-prime market
•Instill a sense of trust in the borrower

Word of mouth advertising
•Provide exceptional customer service so customers will
pass the word that LoanGiant.com is great

•Ideas for developing the peer to peer marketing model
        -Using a more grassroots approach
                Recommendations                  (continued)

Business Alliances
•LoanGiant.com as a streamline business model allows
growth as a stand alone mortgage processing firm
•Develop into a lead generating target marketer.
  Thank you

Any questions?

To top