**UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549**

---

**FORM 10-Q**

---

(Mark One)

**[X]      QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
             SECURITIES EXCHANGE ACT OF 1934**

**For the quarterly period ended **September 30, 2000** or**

**[  ]       TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
     EXCHANGE ACT OF 1934**

**For the transition period from ________to _________**

**Commission file number    000-25621**

**E-LOAN, INC.**
(Exact name of registrant as specified in its charter)



|**Delaware**                                                   | **77-0460084**                      
|-------------------------------------------------------------- | ------------------------------------
|(State or other jurisdiction of incorporation or organization) | (IRS Employer Identification Number)

**5875 Arnold Road, Suite 100Dublin, California   94568**(Address of principal executive offices including zip code)

**(925) 241-2400**(Registrant's telephone number, including area code)







Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file reports), and (2) has been subject to such filing
requirements for the past 90 days. YES [X] NO [  ]

As of November 1, 2000, 53,259,878 shares of the Registrant's Common Stock,
$0.001 par value per share, were issued and outstanding.







**E-LOAN, INC.
      QUARTERLY REPORT ON FORM 10-Q FOR THE PERIOD ENDED September 30, 2000
                                TABLE OF CONTENTS**



|**PART I.   FINANCIAL INFORMATION**                                                                                   | **Page No.**
|--------------------------------------------------------------------------------------------------------------------- | ------------
|                                                                                                                      |             
|Item 1.   Interim Financial Statements
                  (unaudited):                                                 |             
|                                                                                                                      |             
|Balance Sheets at December 31, 1999 and September 30, 2000                                                            | **          
|                                                                                                                      |             
|Statements of Operations for the
    three and nine months ended September 30, 1999 and September 30,2000             | **          
|                                                                                                                      |             
|Statements of Cash Flows for the
    nine months ended September 30, 1999 and September 30, 2000                      | **          
|                                                                                                                      |             
|Notes to Unaudited Financial Statements                                                                               | **          
|                                                                                                                      |             
|Item 2.   Management's Discussion and Analysis of Financial
                      Condition and Results of Operations | **          
|                                                                                                                      |             
|Item 3.   Quantitative and Qualitative Disclosures About Market Risk                                                  | **          
|                                                                                                                      |             
|**PART II.  OTHER INFORMATION**                                                                                       |             
|                                                                                                                      |             
|Item 1.   Legal Proceedings                                                                                           | **          
|                                                                                                                      |             
|Item 2.   Changes in Securities and Use of Proceeds                                                                   | **          
|                                                                                                                      |             
|Item 3.   Defaults Upon Senior Securities                                                                             | **          
|                                                                                                                      |             
|Item 4.   Submission of Matters to a Vote of Security Holders                                                         | **          
|                                                                                                                      |             
|Item 5.   Other Information                                                                                           | **          
|                                                                                                                      |             
|Item 6.   Exhibits and Reports on Form 8-K                                                                            | **          
|                                                                                                                      |             
|**Signature**                                                                                                         | **          
|                                                                                                                      |             
|**Index to Exhibits**                                                                                                 | **          

---

**PART I -- FINANCIAL INFORMATION**



ITEM 1.  FINANCIAL STATEMENTS

**E-LOAN, INC.

                                 BALANCE SHEETS

                                 (In thousands)**

`December 31, September 30,
                                                             1999           2000
                                                       -------------  -------------
                                                                      (unaudited)
                            ASSETS
Current assets:
  Cash and cash equivalents ........................        $37,748        $37,344
  Loans held-for-sale ..............................         35,140         14,955
  Accounts receivable, prepaids
        and other current assets....................          6,462         10,087
                                                       -------------  -------------
     Total current assets ..........................         79,350         62,386
Fixed assets, net ..................................          4,053          7,784
Deposits and other assets ..........................          1,686          2,054
Goodwill and intangible assets .....................         67,878         38,078
                                                       -------------  -------------
     Total assets ..................................       $152,967       $110,302
                                                       =============  =============

    LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
  Warehouse lines payable ..........................        $33,115        $12,498
  Accounts payable, accrued expenses and other......         12,901         11,296
  Capital lease obligation .........................            252            252
  Notes payable ....................................          1,167          1,167
                                                       -------------  -------------
     Total current liabilities .....................         47,435         25,213
Capital lease obligations ..........................            483            247
Notes payable ......................................          2,042          1,167
                                                       -------------  -------------
     Total liabilities .............................         49,960         26,627
                                                       -------------  -------------

COMMITMENTS AND CONTINGENCIES

STOCKHOLDERS' EQUITY:
Common stock, 70,000,000 and 150,000,000 $0.001
   par value shares authorized, 41,679,243 and
   53,207,921 shares issued and outstanding at
   December 31, 1999 and September 30, 2000.........             42             53
Less: subscription receivable ......................             (4)            (4)
Marketing services receivable.......................            --          (8,956)
Unearned compensation ..............................        (21,195)       (10,115)
Additional paid in capital .........................        209,738        259,290
Accumulated deficit ................................        (85,574)      (156,593)
                                                       -------------  -------------
     Total stockholders' equity.....................        103,007         83,675
                                                       -------------  -------------
     Total liabilities and stockholders' equity.....       $152,967       $110,302
                                                       =============  =============`

The accompanying notes are an integral part of these financial statements.

---

**E-LOAN, INC.

                            STATEMENTS OF OPERATIONS

                                 (IN THOUSANDS)

                                  (Unaudited)**

`Three Months Ended  Nine Months Ended
                                                September 30,       September 30,
                                          ------------------- --------------------
                                             1999     2000       1999     2000
                                          --------- --------- --------- ----------
Revenues ..............................     $5,026    $8,966   $14,390    $24,563
Operating expenses:
  Operations ..........................      6,470     8,442    15,744     22,448
  Sales and marketing .................      9,362     6,295    20,634     23,026
  Technology ..........................        972     1,650     2,250      4,479
  General and administrative ..........      1,598     1,548     5,067      5,290
  Non-cash marketing
      costs ...........................         --     2,985        --      3,504
  Amortization of unearned
      compensation ....................      5,599     1,723    17,938      8,109
  Amortization of goodwill and intangible
      assets ....................            1,656     9,933     1,656     29,800
                                          --------- --------- --------- ----------
   Total operating expenses ...........     25,657    32,576    63,289     96,656
                                          --------- --------- --------- ----------
   Loss from operations ...............    (20,631)  (23,610)  (48,899)   (72,093)
Other income, net ..............               387       486       356      1,075
                                          --------- --------- --------- ----------
   Net loss ...........................   ($20,244) ($23,124) ($48,543)  ($71,018)
                                          ========= ========= ========= ==========

Accretion of preferred stock                    --        --    (1,042)       --
                                          --------- --------- --------- ----------
   Net loss applicable to common
      shareholders.....................   ($20,244) ($23,124) ($49,585)  ($71,018)
                                          ========= ========= ========= ==========
Net loss per share:
   Basic and diluted ..................     ($0.52)   ($0.44)   ($2.26)    ($1.53)
                                          ========= ========= ========= ==========
Weighed-average shares -
   Basic and diluted ..................     39,248    52,949    21,924     46,291
                                          ========= ========= ========= ==========`

The accompanying notes are an integral part of these financial statements.



---

**E-LOAN, INC.

                            STATEMENTS OF CASH FLOWS

                                 (IN THOUSANDS)

                                  (UNAUDITED)**

`Nine Months Ended
                                                                 September 30,
                                                           ----------------------
                                                              1999        2000
                                                           ----------  ----------
CASH FLOWS FROM OPERATING ACTIVITIES:
    Net loss ...........................................    ($48,543)   ($71,018)
    Adjustments to reconcile net loss to net cash
     used in operating activities:
      Amortization of unearned compensation ............      17,938       8,109
      Amortization of goodwill and intangible assets....       1,656      29,800
      Amortization of non-cash marketing costs..........          --       3,504
      Charitable contribution of common stock ..........         900          --
      Depreciation .....................................         826       1,744
      Changes in operating assets and liabilities:
         Net change in loans held-for-sale .............       1,607      20,185
         Accounts receivable, prepaids, deposits and
           other assets.................................      (9,979)     (3,992)
         Accounts payable, accrued expenses and other
            payables....................................      10,831      (1,606)
                                                           ----------  ----------
         Net cash used in operating activities ..........    (24,764)    (13,274)
                                                           ----------  ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
    Purchase of furniture and equipment ................      (2,496)     (5,475)
    Net cash received in connection with acquisition
      of CarFinance.com.................................         813          --
                                                           ----------  ----------
         Net cash used in investing activities .........      (1,683)     (5,475)
                                                           ----------  ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
    Payment of issuance costs related to common stock ..          --          --
    Proceeds from issuance of common stock, net ........      62,737         489
    Proceeds from private placement, net of offering
       costs............................................          --      39,172
    Common Stock issued in connection with Employee
       Stock Purchase Plan..............................          --         412
    Proceeds from warehouse lines payable ..............     825,334     649,352
    Repayments of warehouse lines payable ..............    (827,284)   (669,969)
    Proceeds from notes payable ........................       7,859          --
    Repayments of notes payable ........................      (5,000)       (875)
    Payments on obligations under capital lease ........        (160)       (236)
    Proceeds from issuance of preferred stock, net .....         849          --
                                                           ----------  ----------
            Net cash provided by
              financing activities .....................      64,335      18,345
                                                           ----------  ----------
    Net (decrease) increase in cash ...................       37,888        (404)
    Cash and cash equivalents at beginning of period ...       9,141      37,748
                                                           ----------  ----------
    Cash and cash equivalents at end of period .........     $47,029     $37,344
                                                           ==========  ==========
SUPPLEMENTAL CASH FLOW INFORMATION:
    Cash paid for interest .............................      $3,331      $3,590
                                                           ==========  ==========`

The accompanying notes are an integral part of these financial statements.

---

**E-LOAN, INC.**



1.	THE COMPANY





2.	BASIS OF PRESENTATION



Interim Financial Information (unaudited)



The accompanying financial statements as of September 30,
2000 and 1999 are unaudited. The unaudited interim financial statements have
been prepared on the same basis as the annual financial statements and, in the
opinion of management, reflect all adjustments, which include only normal
recurring adjustments, necessary to present fairly the Company's financial
position, results of operations and cash flows as of September 30, 2000 and
1999. These financial statements and notes thereto are unaudited and should be
read in conjunction with the Company's audited financial statements included in
the Company's 10-K for the year ended December 31, 1999. The results for the
three months and nine months ended September 30, 2000 are not necessarily
indicative of the expected results for the year ending December 31, 2000.



Use of Estimates in the Preparation of Financial
Statements



The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.



3.	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES



Software Development Costs



The Company expenses computer software costs as they are
incurred in the preliminary project stage in accordance with SOP 98-1
"Accounting for the Costs of Computer Software Developed or Obtained for
Internal Use".  Once the capitalization criteria of the SOP have been met,
external direct costs of materials and services consumed in developing or
obtaining internal-use computer software and payroll and payroll related costs
for employees who are directly associated with and who devote time to the
internal-use computer software are capitalized.  Capitalized costs are amortized
over one to three years on a straight-line basis.  For the nine months ended
September 30, 2000, the Company had capitalized approximately $2.1 million in
software development costs.



Net Income (Loss) Per Share



The Company computes net loss per share in accordance with
SFAS No. 128, Earnings per Share. Under the provisions of SFAS No. 128 basic net
loss per share is computed by dividing the net loss available to common
stockholders for the period by the weighted average number of common shares
outstanding during the period. Diluted net loss per share is computed by
dividing the net loss available to common stockholders for the period by the
weighted average number of common and common equivalent shares outstanding
during the period, to the extent such common equivalent shares are dilutive.
Common equivalent shares are composed of incremental common shares issuable upon
the exercise of stock options and warrants and upon conversion of Series A, B, C
and Series D convertible preferred stock.



Pro forma net loss per share has been computed by dividing
net loss applicable to common shareholders by the pro forma weighted average
number of shares outstanding. Pro forma weighted average shares assume the
conversion of all preferred stock (which were ultimately converted to common
stock in conjunction with the initial public offering, as if the conversion
occurred at the beginning of the period or at date of issuance, if later.)



The following table sets forth the computation of basic and
diluted net loss per share for the periods indicated ($000's except per share
amounts):



`Three Months Ended      Nine Months Ended
                                        September 30,           September 30,
                                  ----------------------- ---------------------
                                     1999       2000         1999      2000
                                  ----------- ----------- ---------- ----------
Numerator:
  Net loss.....................     ($20,244)   ($23,124)  ($48,543)  ($71,018)
  Accretion of Series C and D
    manditorily redeemable
    convertible preferred
    stock to redemption value..         --          --       (1,042)       --

Net loss applicable to common     ----------- ----------- ---------- ----------
    shareholders...............     ($20,244)   ($23,124)  ($49,585)  ($71,018)
                                  =========== =========== ========== ==========

Denominator:
  Weighted average common shares -
    Basic and diluted...........      39,248      52,949     21,924     46,291

Net loss per share:
  Basic and diluted............       ($0.52)     ($0.44)    ($2.26)    ($1.53)
                                  =========== =========== ========== ==========`



4.	WAREHOUSE LINES PAYABLE



As of September 30, 2000, the Company had a warehouse line of
credit for borrowings of up to $30 million for interim financing of mortgage
loans. The interest rate charged on borrowings against these funds is variable
based on the commercial paper rate of the lender plus various percentage rates.
Borrowings are collateralized by the mortgage loans held-for-sale. The committed
line of credit expires on December 31, 2000. Upon expiration, management
believes it will either renew its existing line or obtain sufficient additional
lines. At September 30, 1999 and 2000, approximately $29.7 million and $8.5
million was outstanding under this line, respectively. This line of credit
agreement generally requires the Company to comply with various financial and
non-financial covenants. The Company was in compliance with these covenants at
September 30, 2000.



The Company has an agreement to finance up to $200 million of
mortgage loan inventory pending sale of these loans to the ultimate mortgage
loan investors.  Of this amount, $100 million is available in committed funds.
This loan inventory financing is secured by the related mortgage loans. The
interest rate charged on these funds is 75 basis points (.75%) over LIBOR. The
line expires April 9, 2001.  At September 30, 2000, there were no outstanding
amounts. This line of credit agreement generally requires the Company to comply
with various financial and non-financial covenants.  At September 30, 2000, the
Company was not in compliance with a covenant that requires the Company to have
an additional line of credit of at least $50 million and has obtained a waiver
from its lender.  The Company believes its combined warehouse facilities are
sufficient to fund its current operations and believes that additional capacity
is available if required.



5.	REVENUES AND OTHER INCOME, NET



The following table provides the components of revenues
($000s):



`Three Months Ended      Nine Months Ended
                                        September 30,           September 30,
                                  ----------------------- ---------------------
                                     1999       2000         1999      2000
                                  ----------- ----------- ---------- ----------
Gain on sale of loans and
  brokerage fee ..............        $2,532      $4,209    $10,086    $11,538
Interest income on loans......         1,616       1,562      3,426      3,366
Auto revenues.................           458       2,999        458      9,106
Credit card and other.........           420         196        420        553
                                  ----------- ----------- ---------- ----------
Total Revenues................        $5,026      $8,966    $14,390    $24,563
                                  =========== =========== ========== ==========`



The following table provides the components of other income,
net ($000s):



`Three Months Ended      Nine Months Ended
                                        September 30,           September 30,
                                  ----------------------- ---------------------
                                     1999       2000         1999      2000
                                  ----------- ----------- ---------- ----------
Interest on short-term
   investments...................       $550        $583       $635     $1,410
Interest expense on
   non-warehouse facility
   borrowings....................        (66)        (73)      (142)      (245)
Equity investment income (loss)          (38)        (36)       (53)       (97)
Other.........................           (59)         12        (84)         7
                                  ----------- ----------- ---------- ----------
                                        $387        $486       $356     $1,075
                                  =========== =========== ========== ==========`



6.	OPERATING EXPENSES



The following table provides detail of the Company's
operating expenses classified by the following categories ($000s):



`Three Months Ended      Nine Months Ended
                                        September 30,           September 30,
                                  ----------------------- ---------------------
                                     1999       2000         1999      2000
                                  ----------- ----------- ---------- ----------
Compensation and benefits......       $4,555      $4,883    $12,439    $16,237
Processing costs...............          916       1,406      1,555      3,921
Advertising and marketing......        8,541       5,625     18,182     20,385
Professional services..........        1,053       1,963      2,770      4,653
Occupancy costs................          781       1,091      1,956      2,795
Computer and internet..........          205         222        478        641
General and administrative.....          686       1,205      2,614      3,266
Interest expense on warehouse
  borrowings...................        1,665       1,540      3,701      3,345
Non-cash marketing costs.......        --          2,985       --        3,504
Amortization of unearned
  compensation.................        5,599       1,723     17,938      8,109
Amortization of goodwill and
  intangible assets............        1,656       9,933      1,656     29,800
                                  ----------- ----------- ---------- ----------
Total Operating Expenses.......      $25,657     $32,576    $63,289    $96,656
                                  =========== =========== ========== ==========`



7.	COMMITMENTS AND CONTINGENCIES



FINANCIAL INSTRUMENT CONTINGENCIES



E-LOAN originates mortgage loans and manages the market risk
related to these loans through various hedging programs.



Loan Commitments and Sell forward Commitments



Upon receiving a locked commitment from a borrower ("rate
lock"), the Company simultaneously enters into either a mandatory sell forward
agreement with a counterparty (Fannie Mae) or a non-mandatory forward sale
agreement with the ultimate investor. At September 30, 2000, the Company was a
party to commitments to fund loans at interest rates previously agreed (locked)
by both the Company and the borrower for specified periods of time.  Rate locks
with the borrowers are on a best effort basis, borrowers are not obligated to
enter into the loan agreement. A rate lock which does not result in a funded
loan is referred to as fallout.  As the Company is exposed to movements in
interest rates after entering into a rate lock, the Company must estimate
fallout if interest rate risk is to be hedged with a mandatory sell forward
agreement.  At September 30, 2000, the Company had provided locks to originate
loans amounting to approximately $71.1 million (the "locked pipeline").



Hedging Activities



The Company originates mortgage loans and sells them
primarily through whole loan sales. The market values of mortgage loans are
sensitive to changes in market interest rates. If interest rates rise between
the time the Company enters into a rate lock with the borrower the subsequent
funding of the loan and the time the mortgage loans are committed for sale,
there may be a decline in the market value of the mortgage loans. To protect
against such possible declines, the Company has adopted a hedging strategy.



The Company retains the services of Tuttle & Co., an
unaffiliated advisory firm specializing in mortgage loan pipeline management, to
assist the Company in minimizing the interest rate risk associated with the time
lag between when loans are rate-locked and when they are committed for sale or
exchanged in the secondary market. Individual mortgage loan risks are aggregated
by note rate, mortgage loan type and stage in the pipeline, and are then
matched, based on duration, with the appropriate hedging instrument, thus
mitigating basis risk until closing and delivery. The Company currently hedges
its mortgage pipeline through mandatory forward sales of Fannie Mae mortgage-
backed securities and non-mandatory forward sales agreements with the ultimate
investor. The Company determines which alternative provides the best execution
in the secondary market.  As a managed account of Tuttle & Co., the Company
is able to take advantage of Tuttle's reporting services, including pipeline,
mark-to-market, commitment and position reporting.



The Company believes that it has implemented a cost-effective
hedging program to provide a level of protection against changes in the market
value of its fixed-rate mortgage loans held for sale. However, an effective
strategy is complex and no hedging strategy can completely insulate the Company
against such changes.



At September 30, 2000, the Company had entered into mandatory
forward loan sale agreements with Fannie Mae amounting to approximately $26.0
million. Tuttle & Company adjusts the amount of forward sale agreements
entered into by expected locked pipeline fallout.



At September 30, 2000, the Company had entered into non-
mandatory forward loan sale agreements amounting to approximately $39.4 million.
These forward loan sale agreements do not subject the Company to mandatory
delivery and there is no penalty if the Company does not deliver into the
commitment. The Company is exposed to the risk that these counterparties may be
unable to meet the terms of these sale agreements. The investors are well-
established U.S. financial institutions; the Company does not require collateral
to support these commitments, and there has been no failure on the part of the
counterparties to meet the terms of these agreements to date.



At September 30, 2000, the Company had uncommitted funded
loans of $4.7 million.



Future Commitments



The Company has future payment commitments for leases and
marketing services agreements aggregating $5.5 million, $7.0 million, $9.9
million, $14.6 million, and $1.5 million for the years 2000 through 2004,
respectively. The Company has contractual commitments with cancellation clauses,
which if exercised would significantly reduce these future obligations.  The
Company's option to cancel the most significant commitment expires on December
31, 2000.  If the Company were to exercise the cancellation option, the majority
of these future commitments would be removed.



8.	RECENT ACCOUNTING PRONOUNCEMENTS



In June 1998, the Financial Accounting Standards Board
("FASB") issued Statement of Financial Accounting Standards No. 133, "Accounting
for Derivative Instruments and Hedging Activities" ("SFAS 133"). SFAS 133, as
amended, establishes accounting and reporting standards for derivative
instruments and hedging activities.  It requires an entity to recognize all
derivatives as either assets or liabilities on the balance sheet and measure
those instruments at fair value.  We are currently in the process of evaluating
the initial adoption of SFAS 133 and its impact on the Company.  Presently, we
do not expect this standard to have a material effect on our operations or
financial position.  However, the adoption of SFAS 133 will require substantive
financial statement disclosure.  We are required to adopt SFAS 133 in the first
quarter of fiscal year 2001.



ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS



The following discussion of the financial condition and
results of operations of the Company should be read in conjunction with the
Financial Statements and the related Notes thereto included elsewhere in this
Form 10-Q. This discussion contains, in addition to historical information,
forward-looking statements that involve risks and uncertainties. The Company's
actual results could differ materially from the results discussed in the
forward-looking statements. Factors that could cause or contribute to such
differences include, but are not limited to, those discussed below, as well as
those discussed below under "Factors Affecting Future Operating Results." The
Company disclaims any obligation to update information contained in any forward-
looking statement. See "Forward-Looking Statements."



OVERVIEW



E-LOAN is a leading online lender whose revenues are derived
primarily from the commissions and fees earned from both brokered mortgage and
auto loans and mortgage and auto loans that it underwrites, funds and sells on
the secondary market.



Mortgage Revenues



E-LOAN's mortgage revenues are derived from the origination
and sale of self-funded loans and, to a lesser extent, from the brokering of
loans. Brokered loans are funded through lending partners and E-LOAN never takes
title to the mortgage. Brokerage revenues are comprised of the mark-up to the
lending partner's loan price, and processing and credit reporting fees. These
revenues are recognized at the time a loan is closed. Self-funded loans are
funded through E-LOAN's own warehouse lines of credit and sold to mortgage loan
purchasers. Self-funded loan revenues consist of proceeds in excess of the
carrying value of the loan, origination fees less certain direct origination
costs, other processing fees and interest paid by borrowers on loans that E-LOAN
holds for sale. These revenues are recognized at the time the loan is sold or,
for interest income, as earned during the period from funding to sale. E-LOAN
earns additional revenue from its self-funded loans as compared to brokered
loans because the sale of loans includes a service release premium.



Auto Revenues



E-LOAN's auto revenues are derived from the origination and
sale of self-funded loans and from the brokering of auto loans. Auto brokerage
revenues are primarily comprised of the mark-up to the lending partner's loan
price or a set origination fee. These revenues are recognized at the time a loan
is closed. Self-funded loans are currently funded using E-LOAN's balance sheet
and sold to auto loan purchasers. Self-funded loan revenues also consist of the
mark-up to the lending partners loan price or a set origination fee. These
revenues are recognized at the time a loan is sold.



General



In generating revenues, E-LOAN relies on a number of
strategic Internet distribution partners to direct a significant number of
prospective customers to its website.  E-LOAN considers its distribution
partnerships with Schwab, Yahoo!, Wingspanbank.com, AutoTrader.com, Kelley Blue
Book and bankrate.com to be the most critical to its ability to generate
revenues. Schwab and Yahoo! have made equity investments in E-LOAN.



RESULTS OF OPERATIONS



The following table sets forth certain items from the
Company's statements of operations as a percentage of total revenues for the
periods indicated:



`Three Months Ended  Nine Months Ended
                                                September 30,       September 30,
                                          ------------------- --------------------
                                             1999     2000       1999     2000
                                          --------- --------- --------- ----------
Revenues ..............................        100%      100%      100%       100%
Operating expenses:
  Operations ..........................        129        94       109         91
  Sales and marketing .................        186        70       143         94
  Technology ..........................         19        18        16         18
  General and administrative ..........         32        17        35         22
  Non-cash marketing
      costs ...........................        --         33       --          14
  Amortization of unearned
      compensation ....................        111        19       125         33
  Amortization of goodwill and intangible
      assets ....................               33       111        12        122
                                          --------- --------- --------- ----------
   Total operating expenses ...........        510       363       440        394
                                          --------- --------- --------- ----------
   Loss from operations ...............       (410)     (263)     (340)      (294)
Other income, net ..............                 8         5         2          5
                                          --------- --------- --------- ----------
   Net loss ...........................       -402%     -258%     -338%      -289%
                                          ========= ========= ========= ==========`

PRO FORMA NET LOSS (SUPPLEMENTAL)



Pro forma net loss for the third quarter of 2000 was $8.5
million, with a pro forma net loss per share of $0.16 on 52.9 million shares.
This compares to a pro forma net loss of $13 million in the third quarter of
1999, with a pro forma net loss per share of $0.33 on 39.2 million shares. Pro
forma results exclude the effects of non-cash charges related to a compensation
charge associated with the Company's stock option plan, amortization of goodwill
on the acquisition of CarFinance.com, a one-time charitable contribution, and
amortization of non-cash marketing costs related to the issuance of warrants to
purchase the Company's common stock



Revenues



Revenues increased to $9.0 million for the three months ended
September 30, 2000 from $5.0 million for the three months ended September 30,
1999 and increased to $24.6 million in the nine months ended September 30, 2000
from $14.4 million in the nine months ended September 30, 1999. Revenues for the
three months ended September 30, 2000 reflect the increased diversity of our
revenue streams with mortgage loans and auto loans contributing $5.8 million and
$3.0 million, respectively.  As a result, E-LOAN continues to be less reliant on
mortgage refinance loans, which are more sensitive to changes in interest rates.
Refinance mortgages for the quarter ended September 30, 2000 accounted for 20%
of total revenues compared to 35% of total revenues for the quarter ended
September 30, 1999.



Operating Expenses



Total Operating Expenses. Total operating
expenses increased $6.9 million to $32.6 million for the three months ended
September 30, 2000 from $25.7 million for the three months ended September 30,
1999 and increased to $96.7 million in the nine months ended September 30, 2000
from $63.3 million in the nine months ended September 30, 1999.  The increase
was primarily due to the amortization of goodwill, amortization of non-cash
marketing costs related to the issuance of warrants to purchase the Company's
stock, processing costs due to increased volumes, employee compensation, and
advertising costs.



Operations. Operations expense is comprised of
both fixed and variable expenses, including employee compensation and expenses
associated with the production and sale of loans and interest expense paid by E-
LOAN under the warehouse facilities it uses to fund mortgage loans held for
sale. Operations expense increased to $8.4 million for the three months ended
September 30, 2000 from $6.5 million for the three months ended September 30,
1999 and increased to $22.4 million in the nine months ended September 30, 2000
from $15.7 million in the nine months ended September 30, 1999.  Operations
expense decreased as a percentage of revenue from 129% to 94% for the three
months ended September 30, 1999 and 2000, respectively, and decreased as a
percentage of revenue from 109% to 91% in the nine months ended September 30,
1999 and 2000, respectively.  The increase in absolute dollars is primarily due
to greater loan volume and interest expense related to a higher percentage of
self-funded loans. E-LOAN expects operations expenses to trend lower as a
percentage of revenues going forward as it further streamlines the loan process
and leverages its fixed costs over  growing loan volume.



Sales and Marketing. Sales and marketing
expense is primarily comprised of expenses (excluding non-cash marketing costs)
related to advertising, promotion and distribution partnerships and employee
compensation and other expenses related to personnel. Sales and marketing
expense decreased to $6.3 million for the three months ended September 30, 2000
from $9.4 million for the three months ended September 30, 1999 and increased to
$23.0 million in the nine months ended September 30, 2000 from $20.6 million in
the nine months ended September 30, 1999.  Sales and marketing expense decreased
as a percentage of revenue from 186% to 70% for the three months ended September
30, 1999 and 2000, respectively, and decreased as a percentage of revenue from
143% to 94% in the nine months ended September 30, 1999 and 2000, respectively.
E-LOAN intends to decrease absolute dollar spending in sales and marketing
activities while increasing its focus on improving the conversion of site
visitors to applicants and closed loans.



Technology. Technology expense includes
employee compensation, the introduction of new technologies and the support of
E-LOAN's existing technological infrastructure. Technology expense increased to
$1.7 million for the three months ended September 30, 2000 from $1.0 million for
the three months ended September 30, 1999 and increased to $4.5 million in the
nine months ended September 30, 2000 from $2.3 million in the nine months ended
September 30, 1999.  Technology expense decreased as a percentage of revenue
from 19% to 18% for the three months ended September 30, 1999 and 2000,
respectively, and increased as a percentage of revenue from 16% to 18% in the
nine months ended September 30, 1999 and 2000, respectively. The increase in
absolute dollars was primarily the result of the growth in engineering and
management information systems personnel to support the expansion of online
operations. E-LOAN intends to increase absolute dollar spending on technology in
an effort to further improve the online loan origination process and implement
new features and services to its website. For the nine months ended September
30, 2000, the Company had capitalized approximately $2.1 million in software
development costs.



General and Administrative. General and
administrative expense is primarily comprised of employee compensation and
professional services. General and administrative expense decreased to $1.5
million for the three months ended September 30, 2000 from $1.6 million to the
three months ended September 30, 1999, and slightly increased to $5.3 million in
the nine months ended September 30, 2000 from $5.1 million in the nine months
ended September 30, 1999.  General and administrative expense decreased as a
percentage of revenue from 32% to 17% for the three months ended September 30,
1999 and 2000, respectively, and decreased as a percentage of revenue from 35%
to 22% in the nine months ended September 30, 1999 and 2000, respectively.
General and administrative expenses are expected to stay relatively constant in
the upcoming quarters.



Non-Cash Marketing Costs. On June 15, 2000, E-LOAN
issued a total of 13.1 million warrants to purchase common stock in two tranches
to Charles Schwab & Co., Inc. pursuant to the Marketing Services Agreement.
The first tranche of 6.5 million warrants have a three-year term and are
exercisable at $3.75 per share.  The second tranche consists of 6.6 million
warrants with a three and a quarter year term and are exercisable at $15.00 per
share. E-LOAN recorded the $12.5 million value of the warrants as marketing
services receivable as a contra-equity account.  This amount is being amortized
on a straight-line basis over a one-year period. For the nine months ended
September 30, 2000, E-LOAN incurred a $3.5 million non-cash charge related to
the amortization of the marketing services receivable.



Amortization of Unearned Compensation.  As of
December 31, 1999, E-LOAN had an unamortized unearned compensation balance of
$21.2 million in connection with certain stock issuances and option grants,
which were considered to be compensatory. E-LOAN amortized $1.7 million and $8.1
million for the three and nine months ended September 30, 2000, respectively,
compared to $5.6 million and $17.9 million for the three and nine months ended
September 30, 1999, respectively.  The amortization of the unearned compensation
charge will continue to decrease in absolute dollars as E-LOAN is amortizing the
related expense on an accelerated basis as well as cancellation of options
related to employee turnover.



Amortization of Goodwill.  Amortization of
goodwill was $9.9 million and $29.8 million for the three and nine months ended
September 30, 2000, respectively, compared to $1.7 million for the three and
nine months ended September 30, 1999.  E-LOAN is amortizing the goodwill and
acquired intangible assets related to the acquisition of Carfinance.com on
September 17, 1999, on a straight-line basis over two years.



Other Income, net



Other income, net, increased from $0.4 million for the three
months ended September 30, 1999 to $0.5 million for the three months ended
September 30, 2000 and increased from $0.4 million for the nine months ended
September 30, 1999 to $1.1 million for the nine months ended September 30, 2000.
The increase is primarily attributable to the increase of interest income on
investments.



Liquidity and Capital Resources



E-LOAN's sources of cash flow include cash from the gain on
sale of self-funded mortgage and auto loans, borrowings under warehouse lines of
credit and other credit facilities, brokerage fees, interest income, credit card
referrals and the sale of equity securities in both private and public
transactions.  E-LOAN's uses of cash include the funding of mortgage and auto
loans, repayment of amounts borrowed under warehouse lines of credit, operating
expenses, payment of interest, and capital expenditures primarily comprised of
furniture, fixtures, computer equipment, software and leasehold
improvements.



Net cash used in operating activities was ($24.8) million and
($13.3) million for the nine months ended September 30, 1999 and 2000,
respectively.  Net cash used in operating activities during the nine months
ended September 30, 2000, was primarily due to an increase in net losses, offset
by a reduction in loans held for sale. Net cash used in operating activities
during the nine months ended September 30, 1999, was primarily due to an
increase in net losses.



Net cash used in investing activities was ($1.7) million and
($5.5) million for the nine months ended September 30, 1999 and 2000,
respectively.  Net cash used in investing activities during these periods was
primarily for the purchase of software, furniture and equipment and leasehold
improvements.



Net cash provided by financing activities was $64.3 million
and $18.3 million for the nine months ended September 30, 1999 and 2000,
respectively.  Net cash provided by financing activities during the nine months
ended September 30, 2000 was primarily from proceeds of the issuance of common
stock in conjunction with the Private Placement offset by repayments on E-LOAN'S
warehouse lines of credit.  Net cash provided by financing activities during the
nine months ended September 30, 1999 was primarily from the net proceeds from
the Company's initial public offering on July 2, 1999, proceeds from notes
payable offset by net repayments under E-LOAN's warehouse lines of credit.



As of September 30, 2000, the Company had cash and cash
equivalents of $37.3 million which E-LOAN believes is sufficient to fund
operations through profitability.  The Company presently uses its own cash to
fund auto loans that are not underwritten and funded by Bank of America.  The
Company is currently working on obtaining a line of credit as a source of
funding these auto loans.



FORWARD LOOKING STATEMENTS



The statements contained in this Report that are not
historical facts are "forward-looking statements" (as such term is defined in
Section 27A of the Securities Act of 1933 and section 21E of the Securities
Exchange Act of 1934), which can be identified by the use of forward-looking
terminology such as "estimated," "projects," "anticipated," "expects,"
"intends," "believes," or the negative thereof or other variations thereon or
comparable terminology, or by discussions of strategy that involve risks and
uncertainties. These forward-looking statements, such as the Company's plans to
increase the number of purchase loans, the relative importance of loans E-LOAN
originates and sells and growth in the number of applications received,
statements regarding development of E-LOAN's business, future operating results,
anticipated capital expenditures, the expectations as to the use of the capital
resource and the availability of additional financing, and other statements
contain in this Report regarding matters that are not historical facts, are only
estimates or predictions and cannot be relied upon. No assurance can be given
that future results will be achieved; actual events or results may differ
materially as a result of risks facing the company or actual results differing
from the assumption underlying such statements. Such risks and assumptions
include, but are not limited to, E-LOAN's ability to successfully promote and
market its brand to current and new customers, generate customer demand for its
products in regions of the country other than California, access additional debt
or equity financing in the future, achieve acceptable pricing for its services,
respond to increasing competition, manage growth of E-LOAN's operations, as well
as regulatory, legislative, and judicial developments that could cause actual
results to vary materially from the future results indicated, expressed or
implied in such forward-looking statements. All written and oral forward-looking
statements made in connection with this Report which are attributable to the
Company or persons acting on its behalf are expressly qualified in their
entirety by the "Factors Affecting Future Operating Results" and other
cautionary statements included herein. The Company disclaims any obligation to
update information contained in any forward-looking statement.



FACTORS AFFECTING FUTURE OPERATING RESULTS



The following important factors, among others, could
cause actual results to differ materially from those contained in forward-
looking statements made in this report or presented elsewhere by management from
time to time.



WE HAVE A HISTORY OF LOSSES, WE EXPECT LOSSES TO CONTINUE
AND WE MAY NOT ACHIEVE OR MAINTAIN PROFITABILITY.



We have not achieved profitability and expect to continue
to incur operating losses for the foreseeable future. We incurred net losses of
$48.5 million and $71.0 million for the nine months ended September 30, 1999 and
2000, respectively. As of September 30, 2000, our accumulated deficit was $156.6
million. Because we expect our operating costs will increase to accommodate
expected growth in loan applications, we will need to generate significant
revenues to achieve and maintain profitability. Even if we achieve
profitability, we may not sustain or increase profitability on a quarterly or
annual basis in the future. If revenues grow slower than we anticipate, or if
operating expenses exceed our expectations or cannot be adjusted accordingly,
our business, results of operations and financial condition will be adversely
affected.



WE HAVE A LIMITED OPERATING HISTORY AND CONSEQUENTLY FACE
SIGNIFICANT RISKS AND CHALLENGES IN BUILDING OUR BUSINESS.



We were incorporated in August 1996, initiated our online
mortgage operations in June 1997 and acquired our online auto operations in
September 1999. Since we began our online mortgage operations, we have operated
during only one downturn in the mortgage business, which commenced in 1999 and
is continuing. We cannot assure you that we will be able to operate successfully
if the current downturn continues further or becomes more extensive. As a result
of our limited operating history, our recent growth and our reporting
responsibilities as a public company, we may need to expand operational,
financial and administrative systems and control procedures to enable us to
further train and manage our employees and coordinate the efforts of our
underwriting, accounting, finance, marketing, and operations departments.



OUR QUARTERLY FINANCIAL RESULTS ARE VULNERABLE TO
SIGNIFICANT FLUCTUATIONS AND SEASONALITY, WHICH COULD ADVERSELY AFFECT OUR STOCK
PRICE.



Our revenues and operating results may vary significantly
from quarter to quarter due to a number of factors. Certain months or quarters
have historically experienced a greater volume of purchase money mortgage and
auto loan applications and funded loans. As a result, we believe that quarter-
to-quarter comparisons of our operating results are not a good indication of our
future performance.  It is possible that in some future periods our operating
results may be below the expectations of public market analysts and investors.
In this event, the price of our common stock may fall.



INTEREST RATE FLUCTUATIONS COULD ADVERSELY AFFECT OUR
BUSINESS IN SEVERAL WAYS, INCLUDING CONSUMERS' INCENTIVE TO REFINANCE EXISTING
MORTGAGE LOANS.



A significant percentage of our mortgage customers use our
services to refinance existing mortgages and they are motivated to do so
primarily when interest rates fall below the rates of their existing mortgages.
In the event interest rates significantly increase, consumers' incentive to
refinance will be greatly reduced and the number of loans that we originate
could significantly decline.



OUR ABILITY TO ENGAGE IN PROFITABLE SECONDARY SALES OF
LOANS MAY ALSO BE ADVERSELY AFFECTED BY INCREASES IN INTEREST RATES.



The mortgage loan purchase commitments we obtain are
contingent upon our delivery of the relevant loans to the purchasers within
specified periods. To the extent that we are unable to deliver the loans within
the specified periods and interest rates increase during those periods, we may
experience no gain or even a loss on the sale of these loans. In addition, any
increase in interest rates will increase the cost of maintaining our warehouse
and repurchase lines of credit on which we depend to fund the loans we
originate. We have recently implemented a hedging program to manage the risk of
loss due to fluctuations in interest rates, but our hedging efforts may not be
successful, and no hedging strategy can completely eliminate interest rate risk.
A sharp decrease in interest rates over a short period may cause customers who
have interest rates on mortgages committed through E-Loan to either delay
closing their loans or refinance with another lender. If this occurs in
significant numbers, it may have an adverse effect on our business or quarterly
results of operations.



OUR HEDGING STRATEGY MAY NOT SUCCEED IN REDUCING OUR
EXPOSURE TO LOSSES CAUSED BY FLUCTUATIONS IN INTEREST RATES.



We attempt to manage our interest rate risk exposure
through hedging transactions using a combination of forward sales of mortgage-
backed securities and forward whole-loan sales to fix the sales price of loans
we expect to fund.  An effective hedging strategy is complex, and we have
limited experience administering a hedging program.  A successful hedging
program depends in part on our ability to properly estimate the number of loans
that will actually close and is subject to fluctuations in the prices of
mortgage-backed securities, which do not necessarily move in tandem with the
prices of loans we originate and close. To the extent that we implement a
hedging strategy but are unable to effectively match our purchases and sales of
mortgage-backed securities with the sale of the closed loans we have originated,
our gains on sales of mortgage loans will be reduced, or we will experience a
net loss on those sales.



UNCERTAINTY WITH RESPECT TO THE TIME IT TAKES TO CLOSE
MORTGAGE LOANS CAN LEAD TO UNPREDICTABLE REVENUE AND PROFITABILITY.



The time between the date an application for a mortgage loan
is received from a customer on our website and the date the loan closes can be
lengthy and unpredictable. The loan application and approval process is often
delayed due to factors over which we have little or no control, including the
timing of the customer's decision to commit to an available interest rate, the
close of escrow date for purchase loans, the timeliness of appraisals and the
adequacy of the customer's own disclosure documentation. Purchase mortgage loans
generally take longer to close than refinance loans as they are tied to the
close of the property sale escrow date. This uncertain timetable can have a
direct impact on our revenue and profitability for any given period. We may
expend substantial funds and management resources supporting the loan completion
process and never generate revenue from closed loans. Therefore, our results of
operations for a particular period may be adversely affected if the mortgage
loans applied for during that period do not close in a timely manner or at
all.



WE HAVE RECENTLY EXPERIENCED SIGNIFICANT GROWTH IN OUR
BUSINESS, AND IF WE ARE UNABLE TO MANAGE THIS GROWTH, OUR BUSINESS WILL BE
ADVERSELY AFFECTED.



Over the past two years we have experienced significant
growth, which has placed a strain on our resources and will continue to do so in
the future. Our failure to manage this growth effectively could adversely affect
our business. We may not be successful in managing or expanding our operations
or maintaining adequate management, financial and operating systems and
controls. Our headcount has grown substantially. At September 30, 1999 and 2000,
we had 283 and 342 full-time employees, respectively.



IF ONLINE LENDING AND OUR SERVICE OFFERINGS DO NOT ACHIEVE
WIDESPREAD CONSUMER ACCEPTANCE, OUR BUSINESS WILL BE ADVERSELY AFFECTED.



Our success will depend in large part on widespread consumer
acceptance of obtaining mortgage and auto loans online. The development of an
online market for mortgage and auto loans has only recently begun, is rapidly
evolving and likely will be characterized by an increasing number of market
entrants. Our future growth, if any, will depend on the following critical
factors:



- the growth of the Internet as a commerce medium
generally, and as a market for consumer financial products and services,
specifically;



- our ability to successfully and cost-effectively market
our services to a sufficiently large number of customers; and



- our ability to overcome a perception among many real
estate market participants that obtaining mortgages online is risky for
consumers.



We cannot assure you that the market for our services will
develop, that our services will be adopted or that consumers will significantly
increase their use of the Internet for obtaining mortgage or auto loans. If the
online market for mortgage and auto loans fails to develop, or develops more
slowly than expected, or if our services do not achieve widespread market
acceptance, our business, results of operations and financial condition would be
adversely affected.



THE LOSS OF ONE OR MORE OF OUR SIGNIFICANT DISTRIBUTION
PARTNERS WOULD ADVERSELY AFFECT OUR BUSINESS.



We rely on Internet distribution partners to direct a
significant number of prospective customers to our website. If we lose any of
our significant distribution partners, we will likely fail to meet our growth
objectives, both in terms of additional borrowers and increased brand awareness.
Approximately 43% and 60% of our mortgage and auto loan applications,
respectively, were derived from the websites of our distribution partners during
the quarter ended September 30, 2000.  Our agreements with our distribution
partners are typically short-term, from one to four years in length, and many
can be terminated for any reason upon 30 to 60 days prior written notice. We
cannot assure you that any or all of these agreements will not be terminated or
will be renewed or extended past their current expiration dates. If any of these
agreements were to be terminated or were to lapse without extension, we could
lose a considerable number of loan applications and our business would be
adversely affected.



THE TERMINATION OF ONE OR MORE OF OUR MORTGAGE LOAN FUNDING
SOURCES WOULD ADVERSELY AFFECT OUR BUSINESS.



We depend on GE Capital Mortgage Services, Inc. ("GE
Capital") to finance our self-funded mortgage loan activities through the
warehouse credit facility they provide. We also depend on Greenwich Capital
Financial Products, Inc. ("Greenwich Capital") to finance portions of our
mortgage loan inventory pending ultimate sale to mortgage loan purchasers. If
either of these warehouse credit facilities becomes unavailable, our business
would be adversely affected. Under our agreements with each of these lenders, we
make extensive representations, warranties and various operating and financial
covenants. A material breach of these representations, warranties or covenants
could result in the termination of our agreements and an obligation to repay all
amounts outstanding at the time of termination. In the past, we have had to
obtain waivers from Greenwich Capital and GE Capital as a result of our failure
to comply with covenants regarding the issuance of capital stock, excess asset
purchases and the breach of financial ratios.  Our agreement with Greenwich
Capital expires in May 2001 and our agreement with GE Capital expires in
December 2000.



WE ARE DEPENDENT ON ONE LENDING SOURCE FOR THE MAJORITY OF
OUR AUTO LOAN BUSINESS.



Currently, the majority of our auto loans are funded through
Bank of America pursuant to a Transition Services Agreement entered into in
connection with our acquisition of Electronic Vehicle Remarketing, Inc. We
currently rely on Bank of America's underwriting system for the processing of
the majority of our auto loans. If Bank of America is unable to underwrite or
fund our auto loans, we may experience delays in processing loans or an
inability to accept or process auto loan applications until we are able to
secure new sources of funding. Sufficient additional sources of funding for our
auto loans may not be available on favorable terms or at all.



IF WE ARE UNABLE TO SECURE NEW SOURCES OF FUNDING FOR OUR
AUTO LOANS, WE MAY NOT BE ABLE TO GROW OUR AUTO LOAN BUSINESS.



We currently use our own cash to fund auto loans that are not
underwritten and funded by Bank of America. We are currently attempting to
obtain a line of credit as a source of funding for our self-funded auto loans.
If we are unable to secure alternative sources of funding, our own funds may be
insufficient to grow our business. Sufficient additional sources of funding for
our auto loans may not be available on favorable terms or at all.



IF WE DO NOT INCREASE THE NUMBER OF AUTO LOAN LENDERS WHO
FUND THROUGH OUR SITE OUR AUTO LOAN BUSINESS WILL NOT GROW.



To grow our auto loan business, we must broaden our offering
of auto loans to a wide range of credit profiles. Currently, the majority of our
auto loans are funded through Bank of America, and the underwriting criteria
that Bank of America requires allows us to fund auto loans only for those
applicants with high credit profiles. In order to fund auto loans for more of
the applicants, we must increase the number of lenders who make their loan
products available through our site. We cannot assure you that we will be able
to enter into arrangements with sufficient other auto loan lenders on favorable
terms or at all.



WE DEPEND ON THE TIMELY AND COMPETENT SERVICES OF VARIOUS
COMPANIES INVOLVED IN THE MORTGAGE PROCESS; IF THESE COMPANIES FAIL TO TIMELY
AND COMPETENTLY DELIVER THESE SERVICES, OUR BUSINESS AND REPUTATION WILL BE
DIRECTLY AND ADVERSELY AFFECTED.



We rely on other companies to perform services related to the
loan underwriting process, including appraisals, credit reporting and title
searches. Any interruptions or delays in the provision of these services may
cause delays in the processing and closing of loans for our customers. If we are
unsuccessful in managing the timely delivery of these services we will likely
experience increased customer dissatisfaction and our business and reputation
could be adversely affected.



WE DEPEND ON OUR AGREEMENTS WITH THIRD PARTIES TO FUND
MORTGAGE LOANS OR FULFILL LOAN TRANSACTION PROCESSING IN TWO STATES; IF THESE
AGREEMENTS ARE TERMINATED, OUR BUSINESS COULD BE ADVERSELY AFFECTED.



We license our mortgage loan origination systems and
proprietary marks to NetB@nk to enable NetB@nk to fund mortgage loans under the
E- LOAN brand in two states. Our agreement with NetB@ank may be terminated by
either party upon 30 days prior written notice. The termination of the agreement
with respect to any or all of the two states could have a material adverse
effect on our business.



THE LOSS OF OUR RELATIONSHIP WITH ANY SIGNIFICANT PROVIDER
OF AUTOMATED UNDERWRITING WOULD HAVE AN ADVERSE EFFECT ON OUR BUSINESS.



We depend on automated underwriting and other services
offered by government sponsored and other mortgage investors, including Fannie
Mae and Freddie Mac ("Agencies"), to help ensure that our mortgage services can
be offered efficiently and on a timely basis. We currently have an agreement
with the Agencies that authorizes our use of their automated underwriting
services and enables us to sell qualified first mortgages to these Agencies. We
cannot assure you that we will remain in good standing with the Agencies or that
the Agencies will not terminate our relationship. We expect to continue to
process a significant portion of our conforming mortgage loans using the
Agencies' systems until we are able to obtain automated underwriting services
from other providers. Our agreement with the Agencies can be terminated by
either party. The termination of our agreements with the Agencies would
adversely affect our business by reducing our ability to streamline the mortgage
origination process.



WE MAY INCUR LOSSES ON LOANS IF WE BREAH REPRESENTATIONS
OR WARRANTIES TO MORTGAGE LOAN PURCHASERS.



In connection with the sale of mortgage and auto loans, we
make customary representations and warranties to loan purchasers relating to,
among other things, compliance with laws and origination practices. In the event
we breach any of these representations and warranties, we may be required to
repurchase or substitute these loans and bear any subsequent losses on the
repurchased loans. We may also be required to indemnify mortgage and auto loan
purchasers for these losses and claims with respect to loans for which there was
a breach of representations and warranties. In addition, many of our agreements
with mortgage and auto loan purchasers prohibit our solicitation of borrowers
with respect to the refinancing of loans we originate and sell. The loan
purchasers under our mortgage loan purchase agreements may construe our
continuing mortgage monitoring service as violating these non-solicitation
provisions, in which case they may elect to terminate their agreements with us
or may seek recovery from us for damages sustained by them. Many of our
agreements with mortgage and auto loan purchasers prohibit us from refinancing
mortgage and auto loans for specified time periods, unless we pay penalties to
the loan purchasers or obtain their consent. Many of these agreements also
require us to return any premiums paid by a mortgage or auto loan purchaser if
the loans purchased are prepaid in full during periods of up to 12 months
following the date the loan is purchased.



THE CONSUMER LENDING INDUSTRY IS INTENSELY COMPETITIVE,
AND IF WE FAIL TO SUCCESSFULLY COMPETE IN THIS INDUSTRY, OUR MARKET SHARE AND
BUSINESS WILL BE ADVERSELY AFFECTED.



To compete successfully, we must respond promptly and
effectively to the challenges of technological change, evolving standards and
our competitors' innovations by continuing to enhance and expand our services,
as well as our sales and marketing channels.  Increased competition,
particularly online competition, could result in price reductions, reduced
margins or loss of market share, any of which could adversely affect our
business. We may not be able to compete successfully in our market environment
and our failure to do so could have an adverse effect on our business, results
of operations and financial condition.



IF WE FAIL TO COMPLY WITH THE NUMEROUS LAWS AND
REGULATIONS THAT GOVERN OUR INDUSTRY, OUR BUSINESS COULD BE ADVERSELY
AFFECTED.



Our business must comply with all applicable state and
federal laws, and with extensive and complex rules and regulations of, and
licensing and examination by, various federal, state and local government
authorities.  These rules impose obligations and restrictions on our mortgage
and auto loan brokering and lending activities.  In particular, these rules
limit the broker fees, interest rates, finance charges and other fees we may
assess, require extensive disclosure to our customers, prohibit discrimination
and impose on us multiple qualification and licensing obligations.  We may not
always have been and may not always be in compliance with these requirements.
Failure to comply with these requirements may result in, among other things,
revocation of required licenses or registrations, loss of approved status,
voiding of loan contracts or security interests, indemnification liability or
the obligation to repurchase loans sold to loan purchasers, rescission of
mortgage loans, class action lawsuits, administrative enforcement actions and
civil and criminal liability.



ANY ACQUISITIONS THAT WE UNDERTAKE COULD BE DIFFICULT TO
INTEGRATE AND COULD DISRUPT OUR BUSINESS, DILUTE STOCKHOLDER VALUE AND ADVERSELY
AFFECT OUR OPERATING RESULTS.



In September 1999, we acquired Electronic Vehicle
Remarketing, Inc., and we may acquire or make investments in other complementary
businesses, technologies, services or products in the future. These acquisitions
and investments could disrupt our ongoing business, distract our management and
employees and increase our expenses.  In the past, we have had discussions with
companies regarding our acquiring, or investing in, their businesses, products,
services, or technologies, and we expect to have additional discussions in the
future.  If we acquire a company, we could have difficulty in assimilating that
company's personnel, operations, technology, and software. In addition, the key
personnel of the acquired company may decide not to work for us.  We could also
have difficulty in integrating the acquired products, services or technologies
into our operations, and we may incur indebtedness or issue equity securities to
pay for any future acquisitions.  The issuance of equity securities could be
dilutive to our existing stockholders.



THE LOSS OF ANY OF OUR EXECUTIVE OFFICERS OR KEY PERSONNEL
WOULD LIKELY HAVE AN ADVERSE EFFECT ON OUR BUSINESS.



Our future success depends to a significant extent on the
continued services of our senior management and other key personnel,
particularly co-founders Chris Larsen, Chief Executive Officer, and Janina
Pawlowski, Chairman of the Board of Directors, as well as Joseph Kennedy,
President and Chief Operating Officer. Ms. Pawlowski, a licensed real estate
broker, is responsible for all of our mortgage activities in California and two
other states.  If Ms. Pawlowski were to terminate her relationship with us for
any reason, we would not be able to conduct mortgage business in these states
until a replacement is found. The loss of the services of Mr. Larsen, Ms.
Pawlowski, Mr. Kennedy or other key employees, would also likely have an adverse
effect on our business, results of operations and financial condition. We have
not entered into employment agreements with any of our executives, except Mr.
Kennedy, and we do not maintain "key person" life insurance for any of our
personnel.



WE MAY NOT BE ABLE TO RECRUIT AND RETAIN THE PERSONNEL WE
NEED TO SUCCEED.



Competition for personnel throughout our industry is intense.
We may be unable to retain our key employees or attract, assimilate or retain
other highly qualified employees in the future. Our future success depends on
our continuing to attract, retain and motivate highly skilled employees,
particularly with respect to our loan processing functions. We have in the past
experienced, and we expect to continue to experience in the future, difficulty
in hiring and retaining employees with appropriate qualifications. If we do not
succeed in attracting new personnel or retaining and motivating our current
personnel, our business will be adversely affected.



OUR BUSINESS WILL BE IMPAIRED IF CONSUMERS DO NOT CONTINUE
TO USE THE INTERNET.



Our business will be adversely affected if Internet usage
does not continue to grow, particularly by home and auto buyers. A number of
factors may inhibit Internet usage by consumers, including inadequate network
infrastructure, security concerns, inconsistent quality of service, and lack of
availability of cost-effective, high-speed service. If Internet usage grows, the
Internet infrastructure may not be able to support the demands placed on it by
this growth and its performance and reliability may decline. In addition, many
websites have experienced service interruptions as a result of outages and other
delays occurring throughout the Internet infrastructure. If these outages or
delays frequently occur in the future, Internet usage, as well as the usage of
our website, could grow more slowly or decline.



OUR BUSINESS WILL SUFFER IF WE ARE UNABLE TO EXPAND AND
PROMOTE OUR BRAND RECOGNITION.



Establishing and maintaining our brand is critical to
attracting and expanding our customer base, solidifying our business
relationships and successfully implementing our business strategy. We cannot
ensure that our brand will be positively accepted by the market or that our
reputation will be strong. Promotion and enhancement of our brand will also
depend, in part, on our success in providing a high-quality customer experience.
We cannot ensure that we will be successful in achieving this goal. To date, we
have received customer complaints regarding the quality of our service. If these
complaints persist, they may significantly damage our reputation and offset the
efforts we make in promoting and enhancing our brand and could have an adverse
effect on our business, results of operations and financial condition. If
visitors to our website do not perceive our existing services to be of high
quality or if we alter or modify our brand image, introduce new services or
enter into new business ventures that are not favorably received, the value of
our brand could be diluted, thereby decreasing the attractiveness of our service
to potential customers.



OUR BUSINESS WILL SUFFER IF WE ARE UNABLE TO ADAPT TO THE
RAPID TECHNOLOGICAL CHANGE THAT CHARACTERIZES OUR INDUSTRY.



Our future success will depend on our ability to adapt to
rapidly changing technologies by continually improving the performance features
and reliability of our services. We rely on third party software products and
services, including software related to automated underwriting functions, which
will enable us to realize processing efficiencies that are central to our
operations. If we are unable to integrate this software in a fully functional
manner, we may experience difficulties that could delay or prevent the
successful development, introduction or marketing of new products and services.
In addition, enhancements of our products and services must meet the
requirements of our current and prospective customers and must achieve
significant market acceptance. We could also incur substantial costs if we need
to modify our services or infrastructure to adapt to these changes.



ANY OUTAGES, DELAYS OR OTHER DIFFICULITIES EXPERIENCED BY
THE INTERNET SERVICE PROVIDERS, ONLINE SERVICE PROVIDERS OR OTHER WEBSITE
OPERATORS ON WHICH OUR USERS DEPEND COULD ADVERSELY AFFECT OUR BUSINESS.



Our website has in the past and may in the future
experience slower response times or decreased traffic for a variety of reasons.
In addition, our users depend on Internet service providers, online service
providers and other website operators for access to our websites. Many of them
have experienced significant outages in the past, and could experience outages,
delays and other difficulties due to system failures unrelated to our systems.
Additionally, the Internet infrastructure may not be able to support continued
growth in its use. Any of these problems could adversely affect our
business.



OUR BUSINESS WILL BE ADVERSELY AFFECTED IF WE ARE UNABLE
TO SAFEGUARD THE SECURITY AND PRIVACY OF OUR CUSTOMERS' FINANCIAL DATA.



Internet usage could decline if any well-publicized
compromise of security occurred. We may incur significant costs to protect
against the threat of security breaches or to alleviate problems caused by any
breaches that occur. We also retain on our premises personal financial documents
that we receive from prospective borrowers in connection with their loan
applications. These documents are highly sensitive and if a third party were to
misappropriate our customers' personal information, customers could possibly
bring legal claims against us. We cannot assure you that our privacy policy will
be deemed sufficient by our prospective customers or any federal or state laws
governing privacy, which may be adopted in the future.



OUR BUSINESS WILL BE ADVERSELY AFFECTED IF WE ARE UNABLE
TO PROTECT OUR INTELLECTUAL PROPERTY RIGHTS FROM THIRD PARTY CHALLENGES OR IF WE
ARE INVOLVED IN LITIGATION.



Trademarks and other proprietary rights are important to our
success and our competitive position. Although we seek to protect our trademarks
and other proprietary rights through a variety of means, we cannot assure you
that the actions we have taken are adequate to protect these rights. We may also
license content from third parties in the future, and it is possible that we
could face infringement actions based upon the content licensed from these third
parties. Trademark or propriety rights claims against us, regardless of their
merit, could result in costly litigation and the diversion of our financial
resources and technical and management personnel. Further, if any of these
claims are proved valid, through litigation or otherwise, we may be required to
change our trademarks and pay financial damages, which could adversely affect
our business.



ITEM 4. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK.



Interest rate movements significantly impact E-LOAN's volume
of closed loans and represent the primary component of market risk to E-LOAN. In
a higher interest rate environment, consumer demand for mortgage and auto loans,
particularly refinancing of existing mortgages, declines.  Interest rate
movements affect the interest income earned on loans held for sale, interest
expense on the warehouse lines payable, the value of mortgage loans held for
sale and ultimately the gain on sale of mortgage and auto loans. In addition, in
an increasing interest rate environment, E-LOAN's mortgage and auto loan
brokerage volume is adversely affected.



E-LOAN originates mortgage loans and manages the market risk
related to these loans through various hedging programs.



Loan Commitments and Sell forward Commitments



Upon receiving a locked commitment from a borrower
("rate lock"), the Company simultaneously enters into either a
mandatory sell forward agreement with a counterparty (Fannie Mae) or a non-
mandatory forward sale agreement with the ultimate investor. At September 30,
2000, the Company was a party to commitments to fund loans at interest rates
previously agreed (locked) by both the Company and the borrower for specified
periods of time.  Rate locks with the borrowers are on a best effort basis,
borrowers are not obligated to enter into the loan agreement. A rate lock, which
does not result in a funded loan, is referred to as fallout.  As the Company is
exposed to movements in interest rates after entering into a rate locks, the
Company must estimate fallout if interest rate risk is to be hedged with a
mandatory sell forward agreement.



Hedging Activities



The Company originates mortgage loans and sells them
primarily through whole loan sales. The market values of mortgage loans are
sensitive to changes in market interest rates. If interest rates rise between
the time the Company enters into a rate lock with the borrower the subsequent
funding of the loan and the time the mortgage loans are committed for sale,
there may be a decline in the market value of the mortgage loans. To protect
against such possible declines, the Company has adopted a hedging strategy.



The Company retains the services of Tuttle & Co., an
unaffiliated advisory firm specializing in mortgage loan pipeline management to
assist the Company in minimizing the interest rate risk associated with the time
lag between when loans are rate-locked and when they are committed for sale or
exchanged in the secondary market. Individual mortgage loan risks are aggregated
by note rate, mortgage loan type and stage in the pipeline, and are then
matched, based on duration, with the appropriate hedging instrument, thus
mitigating basis risk until closing and delivery. The Company currently hedges
its mortgage pipeline through mandatory forward sales of Fannie Mae mortgage-
backed securities and non-mandatory forward sales agreements with the ultimate
investor. The Company determines which alternative provides the best execution
in the secondary market. As a managed account of Tuttle & Co., the Company
is able to take advantage of Tuttle's reporting services, including pipeline,
mark-to-market, commitment and position reporting.



The Company believes that it has implemented a cost-effective
hedging program to provide a level of protection against changes in the market
value of its fixed-rate mortgage loans held for sale. However, an effective
strategy is complex and no hedging strategy can completely insulate the Company
against such changes.





PART II  OTHER INFORMATION



ITEM 1. Legal Proceedings



Reference is made to Part I, Item 3, Legal Proceedings in our
Annual Report on Form 10-K and Form 10-K/A for the year ended December 31, 1999
and Part II, Item I, Legal Proceedings in our Form 10-Q for the quarters ended
March 31, 2000 and June 30, 2000 for descriptions of legal proceedings.



The Company is subject to various other legal proceedings and
claims, either asserted or unasserted, which arise in the ordinary course of
business.  While the outcome of these claims cannot be predicted with certainty,
management does not believe that the outcome of any of these legal matters will
have a material adverse effect on the Company's results of operations or
financial position.



Item 2. Changes in Securities and Use of Proceeds



(c)	Recent Sales of Unregistered Securities.



During the three months ended September 30, 2000, the Company
did not sell any unregistered securities.



(d)	Use of Proceeds from Registered Securities.



On July 2, 1999 the Company completed an initial public
offering in which it sold 4,020,000 shares of its common stock and 5,000 shares
were sold by a selling stockholder. The managing underwriters of the offering
were Goldman, Sachs & Co., Donaldson, Lufkin & Jenrette Securities
Corporation, Hambrecht & Quist LLC, DLJdirect Inc. and E*Trade Securities
Inc. The shares of common stock sold in the offering were registered under the
Securities Act of 1933, as amended, on a Registration Statement on Form S-1 (the
"Registration Statement") (Reg. No. 333-74945) that was declared effective by
the Securities and Exchange Commission on June 28, 1999. All 4,025,000 shares of
common stock registered under the Registration Statement were sold at a price of
$14.00 per share for gross proceeds to E-LOAN of $56.2 million and gross
proceeds to the selling stockholder of $70,000. Offering proceeds to E-LOAN, net
of underwriter discounts, were approximately $52.3 million.



From June 28, 1999, the effective date of the Registration
Statement, to September 30, 2000, the Company has used the $52.3 million of
initial public offering proceeds in its entirety for working capital purposes,
including expenses associated with advertising campaigns, brand-name promotions
and other marketing efforts and capital expenditures. All amounts represent
estimates of direct or indirect payments of amounts to third parties. No amounts
were paid directly or indirectly for the above purposes to directors or officers
of the Company, to persons owning ten percent or more of any class of equity
securities of the Company, or to affiliates of the Company. The use of proceeds
described above does not represent a material change in the use of proceeds
described in the offering prospectus.



Item 3. Defaults Upon Senior Securities



None



Item 4. Submission of Matters to a Vote of Security
Holders



None



Item 5. Other Information



None



Item 6. Exhibits and Reports on Form 8-K



1. Exhibits:
2. Reports on Form 8-K



There were no reports on Form 8-K filed during the three
months ended September 30, 2000.



+ Confidential treatment requested

---

**E-LOAN, INC.**

**SIGNATURES**

Pursuant to the requirement of the Security Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.



| |             
| | ------------
| | E-LOAN, INC.

| | 
| | 
| | 

Dated: November 14, 2000



| |     |                    
| | --- | -------------------
| | By: | /s/ Frank Siskowski

| |                                                                                                                                                                         
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |                                                                                                                                                                         
| | Frank Siskowski                                                                                                                                                         
| | Chief Financial Officer                                                                                                                                                 
| | (Principal Financial and
                                                Accounting Officer and
                                                Duly Authorized Officer)

---

**Exhibit Index**



|**Exhibit Number** | **Description**        
|------------------ | -----------------------
|27.1               | Financial Data Schedule

---